Best to apply SA shielding method before RA form ?
Yes, that's advisable as long as your Retirement Account still gets decently funded (or better) and you're going to keep the "shielded" SA dollars in your SA for at least several months. There's a cost involved with shielding (loss of 4% SA interest for at least one month on the shielded amount), and it takes a little time to recover that loss then start profiting.
I've seen a few areas of confusion, so let me lay out some simple facts in no particular order:
1. If you plan to keep the Full Retirement Sum in your Retirement Account, it
never matters how your Special Account was funded (whether via cash top ups or other sources). The cash top up distinction only ever matters (IF it matters) if/when you're trying to withdraw funds from your Retirement Account after age 55.
I don't know about anyone else, but my plan is not to be poor. So I'm not at all interested in reducing my 4% interest earning Retirement Account below the Full Retirement Sum. (Rather the opposite.) I don't plan to stab myself in the eye financially speaking, so I don't worry very much about limitations on my ability to stab myself in the eye. But if your plan is to raid your own Retirement Account and drop it down as low as it'll go (or lower if you could), then yes, maybe you should worry about the particular mechanisms you use to fund your Special Account.
2. If you're below age 55 you can slam as many dollars into your Special Account as you wish, even in one go, up to the Full Retirement Sum. In fact, if you're a Singaporean citizen newborn (i.e. a CPF member) and you have a great aunt who wants to deposit S$181,000 (the 2020 Full Retirement Sum) into your Special Account as soon as you have a "T" birth certificate number (your NRIC), she can -- that's allowed.
3. There is no separate limit to how high your Special Account can go. Compulsory contributions continue to stream in, apportioned according to the standard allocation rules for your age bracket. You can also make "all three account" Voluntary Contributions ("VCs") as long as they fit within the CPF Annual Limit.
4. It's fairly rare, but it is technically possible to work for two employers in Singapore, get two salaries (plus two streams of variable pay), and have two streams of compulsory contributions
each totaling $37,740 (the CPF Annual Limit). Or maybe even three salaries. Usually the employers don't like that, but it is technically possible.
5. While tax relief on annual $7,000 Special Account top ups are nice, 4% interest earlier and compounded annually is usually even nicer. Run the numbers, but usually you're going to do better slamming surplus dollars (such as surplus OA dollars) into your SA sooner rather than later. (And actually I suggest collecting your MediSave top up tax reliefs first since those have to fit within the tighter CPF Annual Limit and Basic Healthcare Sum, and since MediSave dollars can be useful at any/every age.)
Its a compliment by the way hor.
