CPF Easy Info Thread. :)

[ralliart12]

U shared the above with another forumer last year who also ask about the same old plan, pls read. Jope it helps...

I don't think I replied/provided any information to another person then (I think you're talking about this post by quiliner right?)

But that said, his/her situation sounds very similar to mine, and now that you're reminded me, I also recall I did ask a similar (but not exactly the same) qns before (page 105 to 106) and henrylbh was helpful then. But that time my question was kinda "why a situation was like that", but now my question is "if I do this, what will happen, i.e. how much more will my folks get?"

...If u topup RA after joining CPF Life at 55 (new CPF rules for new members is after CPF Life payout starts), those monies will sit in RA to earn 4% interest. CPFB will do an annual review and will stream out the monies in RA as additional mthly payout (AMP) if u did not request to buy additional annuity with all the balance in RA.

a. If u request to buy additional annuity, I suspect it will be the Standard Plan, pls write to CPFB to confirm. Under Standard Plan, all the monies will be transferred from RA to CPF Life Pool. If the member die earlier than expected, he loses potential 4% pa. interest on the monies. He already lost the extra interest as I explained above.

b. If he prefers CPFB to stream the monies out as additional mthly payout, RA will earn 4% pa, but the monies together with interest will be used to calculate the AMP amt to last till 90/when RA will be zero. CPF website state a few mths before AMP starts, they will calculate and inform the member of the AMP amt. (Uncle Henry might be able to help u estimate? He is the expert on this)

I think I have answered all your questions?

These part of your response to the other chap, is helpful in a sense, especially the part in blue (which I can't find on CPF's official site) but I am/was still hopeful if it is something I can calculate (assuming the calculation method is meant to be public information) $n-top-up = how much more annuity (and for how long), and how much more AMP(and for how long).

...Always talk to CPFB to get estimates and complete understanding. meet up with them.

Most people here dun understand old CPF rules or old CPF Life Plans...

I have gotten my folks to send a message to CPFB via their version of the Secured Mailbox.

 

[henrylbh]

Yes, under CPF Life Plus plan. Collecting payout for a while already...

The top-up into RA will likely to be paid as AMP to age around 90. If born before 1949, different rules may apply. The earlier batch under RSS can defer payout beyond 70 years old.

 

[ahcalvin]

edit: I found the ans from CPF website

 

[highsulphur]

Just want to share here

If you think you have over contributed to your MA and will be receiving a refund next year (without interest), you can try writing in to CPF to request for an early refund.

 

[henrylbh]

If I were you, I will write in to CPF with the exact scenario you've given and ask for written confirmation based on the figures you've provided for the AMP to be worked out.

Every month, the answer will likely to be different

 

[henrylbh]

edit: I found the ans from CPF website

You talking to yourself or you post in wrong thread?

 

[ABuNeNe]

my 70+ years old dad has only few thousands in his OA and SA accounts (0 in RA), is it worth to do a top-up for 6% interest and the income tax relief for me?

can he withdraw a monthly amount from CPF?

 

[reddevil0728]

my 70+ years old dad has only few thousands in his OA and SA accounts (0 in RA), is it worth to do a top-up for the 6% interest and the income tax relief?

can he withdraw a monthly amount from CPF?

Income tax relief for who?

 

[ABuNeNe]

Income tax relief for who?

for me..............

 

[reddevil0728]

for me..............

Well your tax relief is only 7k, so it depends whether it is worthwhile file your to top-up your dad’s cpf just so that he got more money inside so that you can enjoy that tax relief. There’s no right or wrong that.

And given he has hardly any in his cpf, don’t think he can join cpf life unless you top up a lot more but anything above 7k no tax relief.

 

[dork32]

So cpf basic plan is the best since interest will go back to RA?

each plan has it own advantages. most of us prefer basic plan.

 

[highsulphur]

Guys. Wanna ask.
If now I am 27. I got 80k in SA. 0 in OA and 6k in MA.

How much do i need to have to meet FRS at my 55?

No one knows how much is FRS in 28 years time but its safe to say it will be more than 350k

 

[BBCWatcher]

Guys. Wanna ask.
If now I am 27. I got 80k in SA. 0 in OA and 6k in MA.
How much do i need to have to meet FRS at my 55?

We don't know, and neither does the government, really.

However, if you assume the Full Retirement Sum will be increased every January by 3.0% (nominal), and if you assume there are 27 such increases between now and your 55th birthday, then the future Full Retirement Sum will be about S$402,000. That's in nominal 2048 Singapore dollars, of course.

If you don't add even one more dollar to your Special Account, and assuming no change in CPF's interest rates (including bonus interest), it should grow to approximately S$260,000 in nominal 2048 Singapore dollars. In other words, you're already running ahead of the Basic Retirement Sum at age 27, with 3%/year nominal BRS increases assumed, from an age 55 convergence point of view. Congratulations! You can safely plan on a "BRS plus" level of future CPF LIFE retirement income already. Not bad, eh?

OK, you might be wondering how much, today (in 2020), you'd need to add to your Special Account to hit ~S$402,000 in 2048 dollars. And the answer is that ~S$50K (2020 dollars) deposited now should get that particular job done if you're so inclined. In other words, you're well on track, and congratulations.

 

[BBCWatcher]

So if let say I top up another 50k to SA . I am secured for my FRS in 55 in today dollar(2020)?

If you add about S$50K to your Special Account today, it's highly likely that you will end up with what is then the Full Retirement Sum on your 55th birthday, yes. That's not an absolute guarantee, but with reasonable assumptions (continuation of today's interest and bonus interest for the next 27+ years, and 3%/year BRS/FRS/ERS increases), yes. $130K is obviously less than today's Full Retirement Sum ($181K), but if your Special Account runs 1 percentage point ahead of the FRS, plus bonus interest, then your SA should converge to the future FRS even if zero more dollars enter your SA.

The math I'm illustrating is approximate, certainly close enough for a ~27 year forecast. In particular, CPF interest is credited at the end of each year, so you don't really have S$80K in your Special Account right now. You have S$80K plus interest for January to August, 2020. Equally, when your 55th birthday rolls around, it'll be after the prior year's interest is credited. There are some "rounding errors" since your birthday probably isn't perfectly aligned with how CPF reflects interest in your account, but "close enough."

If you're going to add S$50K to your Special Account -- if that's the point behind your questions -- then you might want to do it in a slightly clever way. That is, you could add S$43K now (PayNow QR today or at least by Wednesday this week, in order to start collecting interest from October 1, 2020, on the top up), then add another $7K in late January next year. That way you'd get $7,000 of tax relief for Year of Assessment 2021 and another $7,000 of tax relief for Year of Assessment 2022, assuming you otherwise qualify....

....But you may not qualify, if I'm reading between the lines correctly. If, for example, your idea is to spend most or all of the next 27 years working overseas, but with a FRS-level funded CPF Retirement Account (and future CPF LIFE retirement income stream) to come back to, yes, about S$50K more into your SA should get the job done. Of course in many countries of tax residence CPF interest is taxable, and there are even a couple that apply a wealth tax to CPF assets, but there's nothing you can do about that except not move to that country, perhaps.

 

[sunbox]

My kid is 8 years old. Any recommended amount which one should topup for kids MA/SA account so that power compounding will help when kids grow up?

 

[ocs_woodlands]

My kid is 8 years old. Any recommended amount which one should topup for kids MA/SA account so that power compounding will help when kids grow up?

Good that you are starting early..

I regret I started late. for my 2 kids, I only started 2 years ago - when they were 14 and 16.

my younger boy has 30k in his MA..

I would recommend you throwing in all the yearly angpow/birthday + whatever additional amount you are comfortable with.

I don't know your financial situation but I would say at least 5k pa?

 

[RoLanTo]

hi all.. my dad on old retirement sum scheme.. he is 67 today, haven start payout, probably wait till 70.

want to ask, how much can we top up for his RA? is it to the retirement sum when he is 55 OR retirement sum of 181k based on today 2020?

 

[BBCWatcher]

My kid is 8 years old. Any recommended amount which one should topup for kids MA/SA account so that power compounding will help when kids grow up?

This'll depend on your child's circumstances. I'll start with an "easy" scenario: the dual citizenship 8 year old living in a developed country who's likely to stay there and lose Singaporean citizenship in her/his early 20s. In this scenario the child's CPF MA+SA look quite attractive. The first $60,000 earns 5% interest, Singapore tax free (not generally tax free elsewhere), and all these funds can be withdrawn when the child loses Singaporean citizenship -- or left on account, as preferred.

In less exotic circumstances, I have mixed feelings about topping up a child's CPF accounts. To pick another "easy" scenario, I wouldn't do that unless and until you've exhausted any attractive top up opportunities that the adults might have. Usually, though, it makes better sense to save and prudently invest for a child in a long-term way outside of CPF. Children have the longest investment time horizons among the living, plus they have some short-term and medium-term needs such as education, possible family formation (marriage/partnership), and "nesting" (housing, perhaps starting a business). CPF isn't necessarily well attuned to all of these objectives in the best ways. Yes, OK, 5% interest (bonus interest) is undoubtedly attractive, understood. But I don't think MA and SA are the most spectacular choices from a life trajectory point of view for a child....

Unless you're awash in discretionary savings and have no better ideas, and a few people have that happy problem.

 

[BBCWatcher]

want to ask, how much can we top up for his RA? is it to the retirement sum when he is 55 OR retirement sum of 181k based on today 2020?

Neither. The CPF Retirement Account top up limit is to the current Enhanced Retirement Sum (ERS), measured on a principal only basis (not including accrued interest), less any Retirement Account withdrawals. The 2020 ERS is $271,500.

He should be able to check how much he can top up his RA by logging onto CPF's Web site with his Singpass and looking at his account online. I don't remember offhand which section it's in ("My Messages" maybe?), but if he digs around a bit he should find it.

 

[RoLanTo]

ok thanks. another question.. old scheme monthly payout is based on 20years upto age 85.

if we delay payout till 70.. will it still use 20 years payout OR based on ending age 85?
this does affect monthly payout amount.. anyone knows?