CPF Easy Info Thread. :)

[henrylbh]

That's right. I will also think of all ways to enjoy this "money back" from the gov, it is like "recoverying" some of the various taxes I had paid in the past

Like me Getting WIS, SEC. WC etc is yummy

 

[BBCWatcher]

One example is my relative who is residing in US and receiving social security and still gets all the benefits (GST vouchers, Usave rebates, SC&C, CPF top-ups etc) meant for lower income Singaporeans because that relative makes a point to come back Sg every year for extended period.

And it gets even better for your relative with U.S. personhood. According to IRS Publication 525 (plus some other evidence), I don't think those payments from the Singapore government are considered U.S. taxable income. They're ostensibly based on financial need, i.e. welfare/public assistance benefits. Welfare/public assistance benefits are broadly U.S. tax exempt. He/she should check with a tax expert, of course, if there's any question.

His/her Central Provident Fund (CPF) account is mostly likely U.S. reportable (FinCEN Form 114 and IRS Form 8938, per the filing thresholds for each form). CPF interest across all CPF accounts is definitely U.S. taxable income.

 

[maple96]

CPF interest across all CPF accounts is definitely U.S. taxable income.

Bingo! So it makes excellent sense to choose CPF Life Escalating Plan for u! No interest received into account, no tax to pay but u get to enjoy all the "interest" for life

Best u can quit SG and return to US at 69.5!

 

[SKenny]

What's your total balance for OA, SA, MA and RA? And what's your age now?

I am in my mid 50's. Jobless for almost 10 years now.

I am poor uncle lah. Very sad nao.

 

[maple96]

I am in my mid 50's. Jobless for almost 10 years now.

I am poor uncle lah. Very sad nao.

This is what I call "humble pie"

 

[BBCWatcher]

So it makes excellent sense to choose CPF Life Escalating Plan for u! No interest received into account, not tax to pay but u get to enjoy the "interest" for life

This post is at least ignorant.

The fact is that CPF LIFE annuity payouts received by U.S. persons are partially U.S. taxable. The tax computation for CPF LIFE is almost always based on the IRS's "General Rule," explained in IRS Publication 939. (I don't see how the IRS's other tax computation rule for annuities would ever apply to CPF LIFE, but I'm using the words "almost always" just to be cautious.) Unfortunately, the U.S. tax computation is amazingly complicated, but the bottom line is there's no escaping U.S. tax liabilities with any of the payout plans. Up until entry into the annuity (CPF LIFE), you pay ordinary U.S. income tax on the interest (and ordinary U.S. income tax on the employer's contributions as they're made each year). Thereafter, you still pay U.S. tax on the imputed interest, actuarially adjusted if/as necessary to derive the computation. Any residual is also generally partially taxable as part of the deceased recipient's final tax year.

And of course it's obvious why this is so. If the U.S. Congress taxed interest income but exempted or favored annuity income, everybody would convert their taxable accounts to annuity plans. No, sorry, that doesn't work.

For somebody starting CPF LIFE payouts today, or soon, there might be a tiny incentive in favor of the Standard or Basic Plan (and a minor argument against the Escalating Plan) given that today's U.S. income tax rates are comparatively low and future U.S. income tax rates are likely to be higher. In other words, if there's any U.S. derived "tax play," you've got the play backwards.

 

[maple96]

This post is at least ignorant.

The fact is that CPF LIFE annuity payouts received by U.S. persons are partially U.S. taxable. The tax computation for CPF LIFE is almost always based on the IRS's "General Rule," explained in IRS Publication 939. (I don't see how the IRS's other tax computation rule would ever apply to CPF LIFE, but I'm using the words "almost always" just to be cautious.) Unfortunately, the U.S. tax computation is amazingly complicated, but the bottom line is there's no escaping U.S. tax liabilities with any of the payout plans.

For somebody starting CPF LIFE payouts today, or soon, there might be a tiny incentive in favor of the Standard or Basic Plan (and a minor argument against the Escalating Plan) given that today's U.S. income tax rates are comparatively low and future U.S. income tax rates are likely to be higher. In other words, if there's any U.S. derived "tax play," you've got the play backwards.

I am Singaporean, I dun care

U share to mislead, misrepresent or fake, it only affects US persons here

So long u know what u are doing and done all your homework, good luck to u

I still think u will quit SG at 69.5

 

[BBCWatcher]

I am Singaporean, I dun care

You raised this issue.

 

[henrylbh]

Bingo! So it makes excellent sense to choose CPF Life Escalating Plan for u! No interest received into account, no tax to pay but u get to enjoy all the "interest" for life

Best u can quit SG and return to US at 69.5!

No reason to quit when he got one leg here and another there like my relative.

 

[highsulphur]

I am in my mid 50's. Jobless for almost 10 years now.

I am poor uncle lah. Very sad nao.

Uncle don't need to be humble

 

[jeffrey745]

Jus wanna check, isit worthwhile to topup one's parents cpf who are in their late 60s?

According to this guys in this link who's a middle income earner at 30yo,take home pay abt 3.2k after cpf....

He contributes 1.5k to both of his parents monthly... His parents have very low cpf balances - Dad receives $300 /mth and his mum receives $220/mth from RSS scheme.

Any advise for him to cope with being the sandwiched gen?

http://www.transitioning.org/2019/10/07/30-year-old-single-singaporean-struggling-with-his-parents-in-our-expensive-city/

 

[SKenny]

Jus wanna check, isit worthwhile to topup one's parents cpf who are in their late 60s?

According to this guys in this link who's a middle income earner at 30yo,take home pay abt 3.2k after cpf....

He contributes 1.5k to both of his parents monthly... His parents have very low cpf balances - Dad receives $300 /mth and his mum receives $220/mth from RSS scheme.

Any advise for him to cope with being the sandwiched gen?

http://www.transitioning.org/2019/1...gling-with-his-parents-in-our-expensive-city/

Instead of giving them cash allowance, topping his parent CPF has the advantage of tax relief and higher interest earned.

The big takeaway for me in this story is this point that this person raised; "Moreover, my mom doesn’t know how to cook. We always eat out.".

He then went on to say that eating out everyday contributed to their bad heath, and is expensive too. I think he is making a poor excuse that they have to eat out every day. Perhaps learning how to cook is a better financial decision.

 

[jeffrey745]

Instead of giving them cash allowance, topping his parent CPF has the advantage of tax relief and higher interest earned.

The big takeaway for me in this story is this point that this person raised; "Moreover, my mom doesn’t know how to cook. We always eat out.".

He then went on to said that eating out contributed to their bad heath, and is expensive. I think he is making a poor excuse that they have to eat out every day. Perhaps learning how to cook is a better financial decision.

I also suggested this to my fren to advise this guy.... But the thing is, after u do yearly topup of like 7k to RA acct, u wouldnt see an immediate huge increase in the monthly cpf payouts?

That's y some ppl prefer to hve cash on hand than in cpf payouts.... Some think cpf is being 'locked up' and delayed, n can only b released when 1 passes away....

 

[henrylbh]

Jus wanna check, isit worthwhile to topup one's parents cpf who are in their late 60s?

I topped up my father RA when he was 85. And I continue topping up till he was 90 and had $117k in his RA, after receiving payouts of about $72k

With the latest top-up his payout increased from 1861 to 2204.

 

[Value.Matrix]

Jus wanna check, isit worthwhile to topup one's parents cpf who are in their late 60s?

According to this guys in this link who's a middle income earner at 30yo,take home pay abt 3.2k after cpf....

He contributes 1.5k to both of his parents monthly... His parents have very low cpf balances - Dad receives $300 /mth and his mum receives $220/mth from RSS scheme.

Any advise for him to cope with being the sandwiched gen?

http://www.transitioning.org/2019/1...gling-with-his-parents-in-our-expensive-city/

The $220 is definitely not RSS scheme. Minimum payment a month is $250 for RSS.

Anyway, it looks like a sob story more to me, trying to gain sympathy.

If you have 60,000 in RA using amortaisation of 5.2% CPF interest (because lowest balance of each month), you will draw $344 per month until it depletes.

Every $7,000 topup a year should give about $40 a month more.

Do your own calculation for this.

I tried Amortisation for $250 a month for 25 years and you get $43,602 RA account. So if your parents RA is $43,602 and above, the increment per month (once July of every year since they re-calculate the payout in July), should give about $40 a month. unitl it reaches $60,000.

Then each $7,000 topup should give about $30 a month.

Word of caution: all these are just estimates.

 

[Muneyzmart]

Question: can we top up monthly basis if my father did not reach FRS and still be able to withdraw those money anytime he wants?

The $220 is definitely not RSS scheme. Minimum payment a month is $250 for RSS.

Anyway, it looks like a sob story more to me, trying to gain sympathy.

If you have 60,000 in RA using amortaisation of 5.2% CPF interest (because lowest balance of each month), you will draw $344 per month until it depletes.

Every $7,000 topup a year should give about $40 a month more.

Do your own calculation for this.

I tried Amortisation for $250 a month for 25 years and you get $43,602 RA account. So if your parents RA is $43,602 and above, the increment per month (once July of every year since they re-calculate the payout in July), should give about $40 a month. unitl it reaches $60,000.

Then each $7,000 topup should give about $30 a month.

Word of caution: all these are just estimates.

 

[henrylbh]

The $220 is definitely not RSS scheme. Minimum payment a month is $250 for RSS.

Anyway, it looks like a sob story more to me, trying to gain sympathy.

[/B]

Yes I also understand that the min payout is $250 under RSS, regardless of balance in RA account. May be the couple opted for CPF Life.

Anyway, the couple with $1,500 from the son and collectively $520 from CPF is more than enough (if no prolonged sickness) for not working at all.

 

[jeffrey745]

Yes I also understand that the min payout is $250 under RSS, regardless of balance in RA account. May be the couple opted for CPF Life.

Anyway, the couple with $1,500 from the son and collectively $520 from CPF is more than enough (if no prolonged sickness) for not working at all.

Ya I'm not sure if they opted for cpf life or min sum scheme. But Anw, being a sandwiched gen is a real issue.... Especially if parents dun hve much savings n investments...

 

[jeffrey745]

I topped up my father RA when he was 85. And I continue topping up till he was 90 and had $117k in his RA, after receiving payouts of about $72k

With the latest top-up his payout increased from 1861 to 2204.

Not bad. That's quite gd. Thanks for the info!

 

[kelhot2001]

Yes I also understand that the min payout is $250 under RSS, regardless of balance in RA account. May be the couple opted for CPF Life.

Anyway, the couple with $1,500 from the son and collectively $520 from CPF is more than enough (if no prolonged sickness) for not working at all.

Ahhh, still on CPF LIFE ............