Hi all, I am a bit unsure about the cash top up to CPF SA. If we contribute $7K annually to SA for tax reduction, and based on the description below, we will not be able to withdraw the voluntary contributions at all in lump sum at age 55 (principal and interest, assuming we already meet the FRS)?
Your Retirement Account will be created and funded up to the Full Retirement Sum on your 55th birthday, whereupon any remaining SA and OA dollars can be withdrawn.
In my view this is a “Who cares?” issue because nobody in this forum (Money Mind) should be aspiring to have less than the Full Retirement Sum at age 55, which isn’t actually very much. Indeed, at age 55 hopefully you’re flush with wealth and topping up your Retirement Account to the Enhanced Retirement Sum.
And where is my invitation to any of the champagne fueled age 55 CPF withdrawal parties? I’m still wondering.
1) Can I top up my wife's SA for my own tax relief?
Maybe. If she’s below age 55, if her SA hasn’t reached the FRS, if her total worldwide income is quite limited, if you still have taxable income (can get some tax relief), if you haven’t already used all $7,000 of SA/RA top up tax relief available when you top up qualified family members’ accounts, AND if you haven’t reached the $80,000 annual tax relief limit, then you can get some tax relief.
2) so let say i top up my wife's SA by $7k for 15 years at 4 % interest.
At the end of 15 years, my wife is 55yo. The amt in the SA = $158k approx.
Assuming FRS = $200k at that time.
So she can only withdraw max $5000.
At age 55, correct. (There’s another potential withdrawal opportunity at age 65.)
Question: Can she withdraw $58k down to BRS of $100k? She is co-owner of our property and the lease is long enuff to cover.
In your scenario, no.
3) if let's say we don't withdraw at 55 yo and I continue to top up $7k until 20th year, when she is 60 yo.
The amt in the SA will be = $232k approx. So FRS is met now.
Question: At 60 yo, can she now withdraw $32k to maintain the FRS of $200k? The key query is at 60 yo. Or the only chance of withdrawing is 55yo?
The age 60 v. 55 part doesn’t matter for these purposes. Voluntary top ups to her RA are still voluntary top ups, so (apparently — it’s a little unclear above the FRS) they must be paid out via CPF LIFE. There’s still the 20% age 65 withdrawal opportunity, though.
For simplicity purposes, just assume that top ups go straight to higher age 65+ lifelong pension income, and very attractively so. Higher lifelong pension income is wonderful, of course, and it’s never lavish at these levels, so I’m not sure why so much time and mental energy is spent
in Money Mind worrying about withdrawals to reduce one’s own pension. A higher pension faster means you can more safely tap other financial resources at particular ages.
