CPF Easy Info Thread. :)

nautilus

nautilus

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How do you do VC to SA only after FRS is met?

I've always thought that voluntary SA contributions are maxed out at FRS.

Can someone clarify?
 
crimsontactics

crimsontactics

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nautilus said:
How do you do VC to SA only after FRS is met?

I've always thought that voluntary SA contributions are maxed out at FRS.

Can someone clarify?
Click to expand...

There are two schemes: RSTU and VC.

For RSTU, you can deposit into your SA up till the FRS using the RSTU scheme. You get up to $7k tax deductible a year if you only deposit into your own SA.

For VC, there is only an annual limit of around $35k. This $35k also includes your mandatory contribution. Also, you don't have a say on how this money is distributed. It is distributed between OA, SA and MA in a specific ratio. There is also no tax benefits from VC.

However, there is no total maximum cap for VC unlike RSTU. You can continue to deposit $35k every year through VC even if your SA had reached FRS.
 
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icebeng

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For those of you who are going along the VC to MA strategy here, I'd like to point out that you can still top up once a year, subject to the contribution cap, even if your MA might be maxed out already.

This is because, technically, your MA will never be truly maxed out until you reached 65.
The BHS is adjusted upwards yearly, but because CPF credits our interest for each account at the end of the year, the interests from the maxed out MA account is moved out before the new year. It won't stay in the MA to fill up the new ceiling.
So on 1st Jan each year, the ceiling for the MA is adjusted upwards and will allow incoming contributions again until the new ceiling is hit. You can top the difference between the new and old ceiling.
The adjustment is usually around $2k - $2.5K.
 
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kevinkoh1992

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Right now, I am simply just transferring all my OA to SA to accrue higher interest in SA. Will probably have to use cash for HDB.

God knows when the Singapore government may decide the tier the interest rates of CPF differently after a certain limit.
 
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icebeng

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crimsontactics said:
For VC, there is only an annual limit of around $35k. This $35k also includes your mandatory contribution. Also, you don't have a say on how this money is distributed. It is distributed between OA, SA and MA in a specific ratio. There is also no tax benefits from VC.

However, there is no total maximum cap for VC unlike RSTU. You can continue to deposit $35k every year through VC even if your SA had reached FRS.
Click to expand...

I think the cap is $37740, right?
Do take note that using the VC to all 3 accounts method means that, depending on your age group, only 16-31% of the amount you VC will end up in your SA, the rest end up in your OA and MA.
 
kehyi4

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crimsontactics said:
For VC, there is only an annual limit of around $35k..
Click to expand...
hmm... if you wanna dispense advice, maybe being precise would be good, esp since the numbers are easily found:

CPF FAQ
Q - What is the CPF Annual Limit?
A - The CPF Annual Limit is the maximum amount of mandatory and voluntary contributions to all three CPF Accounts that a CPF member can receive in a calendar year. The current CPF Annual Limit is $37,740.
 
crimsontactics

crimsontactics

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icebeng said:
For those of you who are going along the VC to MA strategy here, I'd like to point out that you can still top up once a year, subject to the contribution cap, even if your MA might be maxed out already.

This is because, technically, your MA will never be truly maxed out until you reached 55.
The BHS is adjusted upwards yearly, but because CPF credits our interest for each account at the end of the year, the interests from the maxed out MA account is moved out before the new year. It won't stay in the MA to fill up the new ceiling.
So on 1st Jan each year, the ceiling for the MA is adjusted upwards and will allow incoming contributions again until the new ceiling is hit. You can top the difference between the new and old ceiling.
The adjustment is usually around $2k - $2.5K.
Click to expand...
Yes.

BHS increase by 3% a year.

But with the latest change, we don't have to worry about MA because there is not a minimum sum anymore.

Sent from OPPO F1s using GAGT
 
crimsontactics

crimsontactics

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kevinkoh1992 said:
Right now, I am simply just transferring all my OA to SA to accrue higher interest in SA. Will probably have to use cash for HDB.

God knows when the Singapore government may decide the tier the interest rates of CPF differently after a certain limit.
Click to expand...
Withdrawal criteria have been liberalise by the govt recently.

It's actually easier to withdraw right now.

Sent from OPPO F1s using GAGT
 
crimsontactics

crimsontactics

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kehyi4 said:
hmm... if you wanna dispense advice, maybe being precise would be good, esp since the numbers are easily found:

CPF FAQ
Q - What is the CPF Annual Limit?
A - The CPF Annual Limit is the maximum amount of mandatory and voluntary contributions to all three CPF Accounts that a CPF member can receive in a calendar year. The current CPF Annual Limit is $37,740.
Click to expand...
Thank you very much for the info!

Sent from OPPO F1s using GAGT
 
highsulphur

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just to share. there's benefit to top up early. I'm just over 40 years old and my CPF balance has crossed 500k
 
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alvint86

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Hey guys, can anyone advise if I use OA/SA for investment, do I still get the interest? Or only for the balance left inside?
 
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