CPF Accounts Value Thread 2020

[crimsontactics]

Based on my past investment, I think I can't But SA will be stuck for long. Hence thinking real hard now.

Actually if you're not ready, no need to transfer first.

You may lose some money, but you will be in a better mental state.

Investment is about having a better quality of life, not necessary having more income per se.

If an investment makes you more stressed out, you should definitely avoid it while you learn more.

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[Mecisteus]

Based on my past investment, I think I can't But SA will be stuck for long. Hence thinking real hard now.

Since you already know your investment capability, why don't you just safeguard your retirement by maximizing your SA first?

Once your retirement is secured, you can afford to take on higher risks.

 

[shadowrains]

Actually if you're not ready, no need to transfer first.

You may lose some money, but you will be in a better mental state.

Investment is about having a better quality of life, not necessary having more income per se.

If an investment makes you more stressed out, you should definitely avoid it while you learn more.

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Do you mean don't need to transfer OA to SA first? I don't think I will VC CPF.

Singapore life with or without investment is pretty stressful
I will continue investment even if it doesn't give 4%; think this is the way to go for now.

Since you already know your investment capability, why don't you just safeguard your retirement by maximizing your SA first?

Once your retirement is secured, you can afford to take on higher risks.

I was thinking having FRS in SA is good enough for retirement. Is it? If it is good enough on average then there is no reason to top SA up to FRS since I can get it from employment.

 

[Mecisteus]

I was thinking having FRS in SA is good enough for retirement. Is it? If it is good enough on average then there is no reason to top SA up to FRS since I can get it from employment.

FRS is in the middle. Not the extreme ends.

So the amount is considered modest.

 

[shadowrains]

FRS is in the middle. Not the extreme ends.

So the amount is considered modest.

Do you recommend amount closer to ERS?

 

[henrylbh]

I was also considering transferring some OA to SA, but thinking if I should just leave it as it is in my OA, investing in an ETF instead.

What's the difference in transferring, if ETF is eligible using OA or SA?

If it's in my SA I'd probably just leave it in for the risk free 4% interest.

Unless you have no plan to use OA for other than investment, then you should transfer your OA to SA and 'just leave it in for the risk free 4% interest'

Say you got 50k OA and wish to transfer 30k to SA. Instead of transferring OA to SA, you think it may be better to invest OA in an ETF to beat 2.5% in OA.

In reality, the opportunity cost of that investment of 30k is still 2.5% as it is a transfer to SA (with opportunity to earn 4% if it remains idle between opportunity for investment). But because OA becomes SA, you now think the opportunity cost is 4% and wouldn't invest, then forget about using OA for investing … just transfer it to SA.

But no ETF (unit trust, yes) is currently available for use of SA.

 

[henrylbh]

I was thinking having FRS in SA is good enough for retirement. Is it? If it is good enough on average then there is no reason to top SA up to FRS since I can get it from employment.

Whether FRS (for life payout) is good enough depends on how much you need in retirement.

Generally, it best to max FRS in SA soonest as it will simply outpace the perennial increment in FRS. And with contribution from employment, your SA will have a chunk earning 4% AFTER transfer of SA to RA at 55. And you are free to withdraw the SA and or the interest thereon anytime to supplement your life payout.

 

[decibel.]

I think you should max SA to FRS before thinking about investing OA. By doing so, the interest will just cover the change in FRS by itself and most likely you're working so you will continue MC to SA too. Of course if using OA to buy house then better don't invest too much with OA unless you're sure you can beat 2.5% with the limited choices of investments

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[minamikaze]

Hi all.
I currently have:
- $22k in OA
- $58K in SA
- $40k in MA

and married with shared finances.

Assuming that I have more than enough free cashflow per month, what's the best way to maximize our tax relief without "over-contributing"?

Thank you!

 

[decibel.]

Hi all.
I currently have:
- $22k in OA
- $58K in SA
- $40k in MA

and married with shared finances.

Assuming that I have more than enough free cashflow per month, what's the best way to maximize our tax relief without "over-contributing"?

Thank you!

Top up your MA within annual limit. Once max top up 7k to SA per year.

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[homer123]

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[minamikaze]

Hm.
CPF Annual Limit is currently $37740.
MA BHS is $60k.
I have $40209 in MA now.
My salary is > 6k - so I + employer contribute $2220 per month to CPF = $26640 per year. But this excludes bonuses, so let's give that $4k.

Essentially, this only allows me to contribute $7k before I hit the Annual Limit for this year.

Does the above sound right? If so, should I contribute this $7k into MA or SA? And why MA or SA first?

EDIT: I just found out that topping up SA (under RSTU) isn't subject to the Annual Limit. So does this mean that if I want to maximize my tax relief, I could contribute $7k into MA (so that I "just nice" hit the Annual Limit), AND contribute $7k into SA (to also enjoy the tax relief)?

Also, what happens if I over-contribute now in Jan? I would have lost 12 months of interest for the excess amount that CPF would refund me - correct?

 

[doody_]

Hi all.
I currently have:
- $22k in OA
- $58K in SA
- $40k in MA

and married with shared finances.

Assuming that I have more than enough free cashflow per month, what's the best way to maximize our tax relief without "over-contributing"?

Thank you!

No need to think too much about CPF until you "solve" the shared finances issue

 

[minamikaze]

​

No need to think too much about CPF until you "solve" the shared finances issue

This is off-topic but why would you think it's an issue?

Meanwhile, any suggestions on my earlier question would be really welcome!

 

[_dXter]

Get a kid, best tax refief and baby bonus for both of you.

Else that 7K to RSTU and MA top is good for you.

 

[doody_]

​

This is off-topic but why would you think it's an issue?

Meanwhile, any suggestions on my earlier question would be really welcome!

No good ever came out of shared finances

Do the SA and MA contribution like you mentioned. No issue for SA, but for MA if you exceeded you will get refunded with no interest.

 

[babyrobo]

Let says SA is at $220k at 55.

Is the RSTU reserved sum (e.g. $21k topup for tax relief throughout working years) from VC SA topups counted in the formation of the RA account? Will RA at 55 be $181k (current FRS) or $201k ($181k+21k)? & also interest from this $21k is it excluded from SA available amount?

 

[tangent314]

There's no rule regarding topups in the formation of the RA. CPFB simply takes the entire FRS from SA, and if there is not enough the rest will come from OA.

RSTU does affect how much you can withdraw from your RA if you opt for BRS though. Not that it's a good idea to opt for the BRS in the first place, except for some exceptional cases.

 

[crimsontactics]

Let says SA is at $220k at 55.

Is the RSTU reserved sum (e.g. $21k topup for tax relief throughout working years) from VC SA topups counted in the formation of the RA account? Will RA at 55 be $181k (current FRS) or $201k ($181k+21k)? & also interest from this $21k is it excluded from SA available amount?

$181k

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[minamikaze]

Where can I find the official article which says that contributing to SA (under RSTU - 7k per year) is not computed under the Annual Limit?