CPF Retirement Sum Scheme

[reddevil0728]

what if i exceeded annual contribution limit? would i still be eligible for tax relief?

For SA or MA?

 

[zoneguard]

refunded back to OA means to his OA account? but money at OA can transfer to RA immediately.

total max RA is 279k, his total amount will be 550k by the time he sold the house. So he will have 271k at OA, can take all the money out from OA?

Or can he transfer 100k to my mum and she put at her RA account?

For those born before 1958, withdrawal rules are different, read this FAQ: https://www.cpf.gov.sg/members/FAQ/...avings from 55&folderid=12854&ajfaqid=6700018

Yes, he can transfer (top-up) to your mum provided she meets all the conditions for receiving top-up and he also met the conditions to do the top-up: https://www.cpf.gov.sg/members/FAQ/...ping-Up Scheme&folderid=19862&ajfaqid=2192161

For housing refund, he need to login to CPF portal to check how much principal + accrued interest needs to be refunded back to OA after the house sale. https://www.cpf.gov.sg/members/FAQ/...Housing Scheme&folderid=11482&ajfaqid=2185800

He may have leftover cash balance.

He need to check if he is on RSS or CPF LIFE. The payout is different and the the duration of payout is different too.

 

[bicycleming]

Amounts you can withdraw from your Special and Ordinary Accounts

In or before 1953

50% of your Special Account and Ordinary Account savings, and any remaining balances after setting aside your Full Retirement Sum* in your Retirement Account

I'm lost, if after set aside his full retirement sum, he still will have 300k, so 150k(50%) need to be in his ordinary and special account? Then this money cannot take out?

 

[Cobra!]

For SA or MA?

SA. i contributed in jan, but dunno how come my mandatory contribution exceeded annual cap.

so dunno if still qualify for relief
and dunno is the person who contributed my cpf getting the refund, or me

 

[reddevil0728]

SA. i contributed in jan, but dunno how come my mandatory contribution exceeded annual cap.

so dunno if still qualify for relief
and dunno is the person who contributed my cpf getting the refund, or me

SA top up separate from the annual cap.

SA top up as long as you are below FRS you will get the full tax relief up to 7k for self

 

[Cobra!]

SA top up separate from the annual cap.

SA top up as long as you are below FRS you will get the full tax relief up to 7k for self

oh? but i see CPF website annual cap = mandatory + VC? i expected VC = (MA VC + SA VC).

 

[reddevil0728]

oh? but i see CPF website annual cap = mandatory + VC? i expected VC = (MA VC + SA VC).

SA top up is RSTU scheme

 

[zoneguard]

I'm lost, if after set aside his full retirement sum, he still will have 300k, so 150k(50%) need to be in his ordinary and special account? Then this money cannot take out?

Did he turn 55 in 2004? If so, is his FRS 84,500? BRS will be 42,250.

I gave the link to check the P+I due to his OA, so yes, based on the FAQ, half of the P+I will be refunded back to OA and can be
withdrawn. The other half will remain in OA.

So the next thing to do will be to check if your mother meets the conditions (her RA balance is below ERS) to accept the top-up (transfer from father's OA) - I gave you the FAQ to that as well. They even gave a worked example: https://www.cpf.gov.sg/Assets/members/Documents/ComputationOfAmts_TrfrsToSpouse.pdf

Finally you can use the 'My Mailbox' in the CPF portal to write in to CPF with your questions and get a written confirmation if your understanding is accurate or not.

oh? but i see CPF website annual cap = mandatory + VC? i expected VC = (MA VC + SA VC).

CPF distinguishes between contributions and top-ups. Contributions can come from work (mandatory) or voluntary contributions and this is subject to the CPF annual limit 37,740.

Top-ups can be cash or CPF transfers (self's OA to SA/RA or OA to loved one's SA/RA). Top-ups below 55 is capped at FRS (of person's age cohort) and above 55 capped at current ERS.

 

[Value.Matrix]

Amounts you can withdraw from your Special and Ordinary Accounts

In or before 1953

50% of your Special Account and Ordinary Account savings, and any remaining balances after setting aside your Full Retirement Sum* in your Retirement Account

I'm lost, if after set aside his full retirement sum, he still will have 300k, so 150k(50%) need to be in his ordinary and special account? Then this money cannot take out?

Honestly should consider cross spouse top-up so that when you VC, more money goes to SA (8% of 100 is still as its withdrawable), while RA is only payout monthly. SA has more flexibility and earns 4% interest.

 

[duhduhduh]

Hello, sorry to bump this thread.

My Mum is reaching 70yo this year and she does not intend to do any drawout for now as she wants to earn higher interest rate, and only do draw out maybe at a later stage. However, I was looking at CPF website. She does not have the option to do any further delayed payout.
Currently RA is less than 60k.

She is still a housewife now, not working, and just doing the usual cooking and wet-marketing for the family. She is not in need of cash as she is currently funded by me and my siblings. In the foreseeable future, her daily expenses will likely to be funded by my siblings and me, so no issue with that.

However I am also very confused between the old RSS vs CPF Life. It seems to make sense for her to subscribe into CPF Life Standard so she can enjoy the monthly annuity as long as she lives a long life. however, based on the calculation, her payout will get a deduction of about ~$150, but it goes for long though. So therefore, I think it would make sense for her to go full CPF life annuity though.

Is there any "pros" to stay on RSS?
And also, is there anyway for her to receive the monthly payout but to a top-up back to her RA. Does that make sense?

 

[chiokcc]

My parent's RA has less than $20k each. If my siblings and I (3 of us) do top-ups of $7k each before this year is out (total of $21k split between both patents), will all 3 of us get tax deductible of $7k each of assessible income for this year in next year's assessment?

 

[reddevil0728]

My parent's RA has less than $20k each. If my siblings and I (3 of us) do top-ups of $7k each before this year is out (total of $21k split between both patents), will all 3 of us get tax deductible of $7k each of assessible income for this year in next year's assessment?

Yea.
As long as their account below FRS.

 

[BBCWatcher]

However I am also very confused between the old RSS vs CPF Life. It seems to make sense for her to subscribe into CPF Life Standard so she can enjoy the monthly annuity as long as she lives a long life. however, based on the calculation, her payout will get a deduction of about ~$150, but it goes for long though. So therefore, I think it would make sense for her to go full CPF life annuity though.

That’s the major benefit of CPF LIFE, that the payouts endure however long you live. Bear in mind that the Standard Plan’s essentially level nominal payouts will progressively lose real purchasing power over the hopefully decades of your mother’s remaining lifespan. The Escalating Plan and/or redepositing at least initial monthly payouts (plus asking the CPF Board to recompute her CPF LIFE payouts after the redeposits) helps solve that problem.

Note that you and your siblings are likely each eligible for up to $7,000 per year of tax relief for topping up her Retirement Account. That’s a great deal.

Is there any "pros" to stay on RSS?

If she has a strong, rational reason to believe that she will assuredly die before age 90 — if she’s in poor health in other words — then the classic RSS might make some financial sense.

 

[chiokcc]

Yea.
As long as their account below FRS.

Great... more tax savings.... thanks....

 

[duhduhduh]

That’s the major benefit of CPF LIFE, that the payouts endure however long you live. Bear in mind that the Standard Plan’s essentially level nominal payouts will progressively lose real purchasing power over the hopefully decades of your mother’s remaining lifespan. The Escalating Plan and/or redepositing at least initial monthly payouts (plus asking the CPF Board to recompute her CPF LIFE payouts after the redeposits) helps solve that problem.

Note that you and your siblings are likely each eligible for up to $7,000 per year of tax relief for topping up her Retirement Account. That’s a great deal.

If she has a strong, rational reason to believe that she will assuredly die before age 90 — if she’s in poor health in other words — then the classic RSS might make some financial sense.

Hi BBC!

Thanks! So for my siblings and I, we can do top up (7k * 3) to help increase the amount of payout as well?

Then the death bequest amount remains: the same (CPF LIFE premium that you have paid less the total payouts you have received, and also without the interest)?

As long as it does not meet FRS?

And also the top-ups we do, does it earn interest as well?

 

[myrick]

I thought we can only have $7k top up per year? Not really sure if your mum can receive $7k each from 3 top up.

Perhaps some guru can advise on this.

 

[karakorum1999]

I thought we can only have $7k top up per year? Not really sure if your mum can receive $7k each from 3 top up.

Perhaps some guru can advise on this.

Let’s not get confused…
There’s no $7k cap on the top up amount to recipient’s RA (only prevailing ERS as RA balance cap, and current FRS balance cap for the top up to enjoy tax relief). And the recipient can receive top ups from more than 1 person.

The $7k cap is imposed on the maximum cash top up amount to RA (and similarly for SA for below 55 recipient) that the donor can enjoy for tax savings for that year.

 

[henrylbh]

Hello, sorry to bump this thread.

My Mum is reaching 70yo this year and she does not intend to do any drawout for now as she wants to earn higher interest rate, and only do draw out maybe at a later stage. However, I was looking at CPF website. She does not have the option to do any further delayed payout.
Currently RA is less than 60k.

She is still a housewife now, not working, and just doing the usual cooking and wet-marketing for the family. She is not in need of cash as she is currently funded by me and my siblings. In the foreseeable future, her daily expenses will likely to be funded by my siblings and me, so no issue with that.

However I am also very confused between the old RSS vs CPF Life. It seems to make sense for her to subscribe into CPF Life Standard so she can enjoy the monthly annuity as long as she lives a long life. however, based on the calculation, her payout will get a deduction of about ~$150, but it goes for long though. So therefore, I think it would make sense for her to go full CPF life annuity though.

Is there any "pros" to stay on RSS?
And also, is there anyway for her to receive the monthly payout but to a top-up back to her RA. Does that make sense?

Her payout will start automatically in the month she turns 70 and I guess it about $400pm till about 95.

Since she does not need the payout, keep redepositing the payouts into her RA and her subsequent payouts will be higher and higher each year. She can keep doing that even after 95, if she is still alive. There is no real need to gamble with CPFL since you and your siblings can keep funding her retirement and she will still get her payouts and redepositing them without losing a cent of her RA.

 

[curious_moo]

Let’s not get confused…
There’s no $7k cap on the top up amount to recipient’s RA (only prevailing ERS as RA balance cap, and current FRS balance cap for the top up to enjoy tax relief). And the recipient can receive top ups from more than 1 person.

The $7k cap is imposed on the maximum cash top up amount to RA (and similarly for SA for below 55 recipient) that the donor can enjoy for tax savings for that year.

I think you meant the 7k cap for tax relief for top-up to RA (or SA below 55). Dont think there is a cap imposed on maximum cash top up.

Also, for top-up to SA of recipient below 55, recipient need to earn less than 4k annual income before you can get tax relief for these top-up I think.

 

[reddevil0728]

I think you meant the 7k cap for tax relief for top-up to RA (or SA below 55). Dont think there is a cap imposed on maximum cash top up.

Also, for top-up to SA of recipient below 55, recipient need to earn less than 4k annual income before you can get tax relief for these top-up I think.

The 4k annual income is not the case if it’s for parents.