CPF Easy Info Thread. :)

[reddevil0728]

Anyone here top up SA to get tax relief?

That would be a good idea to increase your CPF and get 4% interest + tax relief. why?

 

[Value.Matrix]

I don't disagree. But I have found that there are people who are willing to put money into CPF but not so willing to invest on their own. Others may appreciate the relative safety of money in CPF before they risk their assets on the market.

In any case, the question was about VC to MA or RSTU to SA first. Between the two, I think it makes more sense to VC to MA first.

I like SA more for RSTU. Because the SA can grow beyond FRS for SA Shielding (if it still is allowed). But same same, difference is whether at 55, is it better or not.

 

[SBC]

Jus top up 2k to kids MA.

 

[ZacharyA]

Once you earn about 6k/mth, you would prob hit the max CPF annual limit with a decent bonus. At that point, VC to MA is no longer a realistic option.

In that sense, VC to MA should take place when one is younger and not yet hitting the CPF annual limit.

No AWS, Covid year even more jialat, No VB / PB.

Still got buffer for VC and RSTU

 

[ZacharyA]

The game has changed/is changing, though, in at least these respects:

1. MediShield Life and Integrated Shield premiums are higher and climbing;

2. Medical costs are rising rather quickly, with more opportunities (or requirements) to spend more from MediSave;

3. The Basic Healthcare Sum (BHS) is rising faster than the BRS/FRS/ERS;

4. CareShield Life premiums are compulsory from age 30 for younger cohorts;

5. Since compensation is generally rising, it's getting tougher sooner to squeeze a MediSave voluntary contribution within the CPF Annual Limit;

6. Some people work for Additional MediSave Contribution Scheme (AMCS) employers, which also effectively limits MediSave top up opportunities.

"It's complicated." My fundamental view is that the tax relief is nice, but it shouldn't be the only consideration. I do see some value in MediSave's relative liquidity for a typical early to mid working career individual. So I like leaning into MediSave at the beginning, to a degree.

I think it's about time G look at increasing the CPF annual limit to be in tandem with the increase in BRS FRS ERS and BHS. Maybe can increase CPF ceiling from $6k to $7k.

Even for BTOs, the ceiling is getting higher. up to 14k for HDB and 16k for ECs. Doesn't make sense for the CPF ceiling to be kept as is to meet all of the rising costs above.

 

[ZacharyA]

When you are chronically sick.

Even with private integrated shield plans? Wipe out?

 

[ZacharyA]

BHS over the years:

• 2015 - 48,500
• 2016 - 49,800 +2.7%
• 2017 - 52,000 +4.4%
• 2018 - 54,500 +4.8%
• 2019 - 57,200 +5.0%
• 2020 - 60,000 +4.9%
• 2021 - 63,000 +5.0%

CPF MA interests not enough to move in tandem

 

[BBCWatcher]

I think it's about time G look at increasing the CPF annual limit to be in tandem with the increase in BRS FRS ERS and BHS. Maybe can increase CPF ceiling from $6k to $7k.

Even for BTOs, the ceiling is getting higher. up to 14k for HDB and 16k for ECs. Doesn't make sense for the CPF ceiling to be kept as is to meet all of the rising costs above.

Well, the compulsory contribution rates for age 55+ members and their employers are going to increase over the next decade, starting with the first increments on January 1, 2021. Even so, we’re probably getting near a general hike in the contribution limit since the last time it happened was way back on January 1, 2016. The government announced the hike to $37,740 in late February, 2015. Let’s see if CPF has an announcement to make in February, 2021.

If/when there is a general hike, maybe it’d make sense to increase variable pay contributions more than base salary contributions. Today the $37,740 figure is based on 17 months at $6,000/month. How about 18 months at $7,000/month, which would translate to a CPF Annual Limit of $46,620?

 

[ZacharyA]

Well, the compulsory contribution rates for age 55+ members and their employers are going to increase over the next decade, starting with the first increments on January 1, 2021. Even so, we’re probably getting near a general hike in the contribution limit since the last time it happened was way back on January 1, 2016. The government announced the hike to $37,740 in late February, 2015. Let’s see if CPF has an announcement to make in February, 2021.

If/when there is a general hike, maybe it’d make sense to increase variable pay contributions more than base salary contributions. Today the $37,740 figure is based on 17 months at $6,000/month. How about 18 months at $7,000/month, which would translate to a CPF Annual Limit of $46,620?

Yep, I agree.

Although we are still in the midst of a pandemic, it would be ideal to see new policies coming our way in the next 2-3 years.

 

[BBCWatcher]

The CPF Annual Limit was $31,450 prior to the increase to $37,740 on January 1, 2016. That was an increase of exactly 20%. If CPF wants to aim for +20% again then a hypothetical new CPF Annual Limit would be $45,288. To get to precisely that figure you could raise the contribution wage cap from $6,000 to $7,200 based on the existing 17 month formula. Or you could raise it to $6,800 with an 18 month formula. Or split the difference and go with $7,000/month based on a 17.5 month formula. *IF* you want the CPF Annual Limit to increase by 20% again, which isn’t necessarily a requirement.

 

[reddevil0728]

Even with private integrated shield plans? Wipe out?

Don’t get you

 

[reddevil0728]

CPF MA interests not enough to move in tandem

I don’t think that’s the objective of the interest. That’s why you are still contributing via employment.

 

[Okenba]

Hullo. Just wanted to check something.

I know there's a CPF Life estimator out there, and making some assumptions (FRS to rise by 3% each year), we can get a range of payouts for all 3 plans (Basic, Standard, Escalating), and at different payout starting age (65 or 70).

My question is, is there a way for me to estimate payouts if I plan to continue topping up my RA after 55?

The estimator requires us to input how much we have in RA at 55, but what if we continue to top-up to prevailing FRS/ERS even after that? Is there a way to estimate what the payout would be if we choose that route?

 

[Value.Matrix]

Hullo. Just wanted to check something.

I know there's a CPF Life estimator out there, and making some assumptions (FRS to rise by 3% each year), we can get a range of payouts for all 3 plans (Basic, Standard, Escalating), and at different payout starting age (65 or 70).

My question is, is there a way for me to estimate payouts if I plan to continue topping up my RA after 55?

The estimator requires us to input how much we have in RA at 55, but what if we continue to top-up to prevailing FRS/ERS even after that? Is there a way to estimate what the payout would be if we choose that route?

You reverse engineer (find the compounded amount at the end of 65) to 55.

Its an estimate but, betrer than nothing.

 

[Okenba]

You reverse engineer (find the compounded amount at the end of 65) to 55.

Its an estimate but, betrer than nothing.

This makes sense. Thanks.

 

[dork32]

Hullo. Just wanted to check something.

I know there's a CPF Life estimator out there, and making some assumptions (FRS to rise by 3% each year), we can get a range of payouts for all 3 plans (Basic, Standard, Escalating), and at different payout starting age (65 or 70).

My question is, is there a way for me to estimate payouts if I plan to continue topping up my RA after 55?

The estimator requires us to input how much we have in RA at 55, but what if we continue to top-up to prevailing FRS/ERS even after that? Is there a way to estimate what the payout would be if we choose that route?

you do not need ra amount at 55 to use the cpf life calculator.

to know the payout,
1. you need to compute how much you have at 65 based on whatever cashflow you want
2. you then put your age at 65 today into the cpf life calculator
3. you then put in the amount that you have calculated in (1) in
4. the calculator will tell you how much payout you can get.

 

[BBCWatcher]

Adding to previous comments, if you plan to track the Enhanced Retirement Sum (keep your Retirement Account pegged to the maximum allowed) you’ll have to forecast future ERS increases. We don’t know what the future ERS increases will be, so you’ll have to make a reasonable guess. Pick something that makes sense for you. For example, if you want to estimate future payouts conservatively, to see what would happen if the ERS increases at a slower rate than it has increased in recent past years, then maybe you’d model 2%/year ERS increases.

Also, CPF interest rates are not strictly guaranteed to remain at current levels. The online calculator assumes interest rates will hold steady.

 

[SBC]

< 15 days to get CPF interest liao.

 

[highsulphur]

< 15 days to get CPF interest liao.

Huat ah!....

 

[ZacharyA]

Don’t get you

You mentioned that if one gets chronically ill, there is a possibility of BHS / CPF MA being wiped out.

But my understanding that if you are on an integrated shield plan + rider, you should be capped at a limit for out of pocket expenses, and the rest are taken care of by insurance, no?