CPF SA

[endlssorrow]

What’s the min to hit target for retirement?

 

[BBCWatcher]

What’s the min to hit target for retirement?

I don't understand your request, so I'll try answering it a couple ways....

1. Nobody is required to deposit any funds into anybody's CPF Special Account except for those who work for pay in Singapore who are CPF members (citizens and PRs) who have compulsory contributions (employer and employee), a portion of which flows into their Special Accounts.

2. How much you need to retire, and how much of what you need should be in your CPF Special Account (and then in your CPF Retirement Account), depend on your circumstances. One major factor is when you retire. Most probably you would be wise to accumulate a "substantial" CPF Special Account balance if you're a CPF member.

3. As a CPF member, and strictly before your 55th birthday, you are allowed to top up your Special Account to the current Full Retirement Sum. That's the maximum voluntary directed (Special Account only) top up allowed. Starting on your 55th birthday, you're not allowed to make a directed top up to your Special Account, but you can top up your Retirement Account.

Yes, it is possible for a generous person to top up a newborn Singaporean citizen's CPF Special Account to the current Full Retirement Sum just as soon as that newborn has a Singapore birth registration number, which is also a CPF membership number and (future) NRIC number.

Did any of those answers help?

 

[logicet]

Hijack this thread:

1. If one were to voluntarily top up MA at the start of the year and eventually, monthly salary CPF exceeds the VC limit of 37.5K, will it be refunded and tax relief will not be counted or will employer be unable to deposit into CPF and it will be part of your salary at the months where it cannot be deposited?

2. When is the best time to top up SA? i.e when does CPF deposit its interest and any effect?

Thanks.

 

[BBCWatcher]

1. If one were to voluntarily top up MA at the start of the year and eventually, monthly salary CPF exceeds the VC limit of 37.5K, will it be refunded and tax relief will not be counted or will employer be unable to deposit into CPF and it will be part of your salary at the months where it cannot be deposited?

The former. The compulsory contributions will continue to stream into your CPF subaccounts, although exactly how those compulsory contribution dollars are allocated may be altered by your excess top up. CPF will at some point, usually around February the following year at the latest, refund the excess above the CPF Annual Limit without interest.

2. When is the best time to top up SA? i.e when does CPF deposit its interest and any effect?

The best time is immediately (within December, 2019; use PayNow QR at this point) if you haven't made your SA/RA top up(s) for 2019 ("Year of Assessment 2020") tax relief yet. Then, more generally, the best time for SA/RA top ups for tax relief is toward the end of the month of January, but (again) allowing enough time for CPF to credit your top up within the month of January. Top ups credited within the month of January start earning interest from February 1.

Why "toward the end of month"? Because you're earning at least a little bit of bank interest on your cash before you hand it to CPF. If you hand the cash to CPF on January 1, you lose bank interest on your cash starting on January 1. But CPF will only start paying interest on that top up from February 1, the same as if you topped up toward the end of the month (but still credited within the month). Don't wait until the last possible moment, though. A top up via PayNow QR sometime the morning of the second-to-last business day of January is what I suggest. If you have never made a CPF top up using PayNow QR, and if you have time to practice, try making a $1 top up so you can understand the full process. Watch out for any bank-enforced limits that would prevent you from sending CPF the full top up amount in one go.

Good luck!

 

[havetheveryfun]

the minimum is what the government recommends, they have all the statistics and studies to arrive at the particular number.

 

[endlssorrow]

Thanks for the whole length!

I mean for OA there’s a min sum to meet right? Like 180k in 2019. If OA doesn’t meet but SA can meet is also the same right?

2) any max cap for SA for the 4% interests to stop growing?

I don't understand your request, so I'll try answering it a couple ways....

1. Nobody is required to deposit any funds into anybody's CPF Special Account except for those who work for pay in Singapore who are CPF members (citizens and PRs) who have compulsory contributions (employer and employee), a portion of which flows into their Special Accounts.

2. How much you need to retire, and how much of what you need should be in your CPF Special Account (and then in your CPF Retirement Account), depend on your circumstances. One major factor is when you retire. Most probably you would be wise to accumulate a "substantial" CPF Special Account balance if you're a CPF member.

3. As a CPF member, and strictly before your 55th birthday, you are allowed to top up your Special Account to the current Full Retirement Sum. That's the maximum voluntary directed (Special Account only) top up allowed. Starting on your 55th birthday, you're not allowed to make a directed top up to your Special Account, but you can top up your Retirement Account.

Yes, it is possible for a generous person to top up a newborn Singaporean citizen's CPF Special Account to the current Full Retirement Sum just as soon as that newborn has a Singapore birth registration number, which is also a CPF membership number and (future) NRIC number.

Did any of those answers help?

 

[BBCWatcher]

I mean for OA there’s a min sum to meet right? Like 180k in 2019. If OA doesn’t meet but SA can meet is also the same right?

No, there's no obligation to fund any CPF subaccount(s). The only obligation is for you (if self-employed) or your employer, as applicable, to make compulsory CPF contributions if you're working and earning in Singapore. If you're self-employed the legal obligation is MediSave only, and if you're employed there are compulsory contributions into all three accounts (OA, MA, SA).

If your compulsory contributions total to S$50 over the course of your life, for example, there are no further obligations.

To repeat, the only obligations are on the contribution side, out of your employment paycheck or self-employment trade income, if you're a citizen or PR working in Singapore. You can exceed the legal obligations, and often that's wise, but you're not required to.

If you use particular CPF dollars for something (notably Ordinary Account dollars for housing), certain obligations attach.

In years long past CPF used to have a "Minimum Sum Scheme." Is that what you're thinking of perhaps, that you have to cough up some dollar amount at some stage of life if a particular CPF subaccount doesn't hit a certain figure, even though you and your employer have fulfilled all legal obligations? There's nothing like that now.

Or are you thinking of withdrawal limits, such as the withdrawal limits from your Retirement Account which is formed at age 55 -- that you have to keep a certain "minimum" in your Retirement Account?

2) any max cap for SA for the 4% interests to stop growing?

There's no separate cap on how big a Special Account can get. There are some Special Account funding limits, though. Specifically:

1. You can make voluntary, directed contributions into a Special Account only before age 55 and only (at most) to push the SA balance up to the current Full Retirement Sum.

2. You can only transfer Ordinary Account dollars into your Special Account before age 55, and only while your Special Account is below the current Full Retirement Sum.

3. There's an annual cap on compulsory and "all three" (non-account specific voluntary) contributions called the CPF Annual Limit. The CPF Annual Limit effectively limits the yearly inflow otherwise.

Hypothetically a generous individual could deposit the entire Full Retirement Sum into a citizen newborn's Special Account a couple days after the baby is born, then that baby could embark on a paid modeling career in Singapore with $37,740/year of total compulsory contributions into his/her CPF subaccounts (this baby model is rather well paid) -- including the portion into his/her Special Account -- and keep working for the better part of a century, with lots of dollars flowing into his/her Special Account every year. And with his/her Special Account earning 4% interest plus bonus interest. Or maybe this baby, then young adult, transfers every OA dollar as it streams in into his/her SA, too (until the FRS). That's all possible, hypothetically. In this hypothetical scenario a Special Account balance can end up soaring well into the 7 digit range.

 

[endlssorrow]

So what’s the use of top up $7k yearly to SA?
Other than lower our income tax ‘?

It can reach retirement sum faster also right

 

[fr33d0m]

So what’s the use of top up $7k yearly to SA?
Other than lower our income tax ‘?

It can reach retirement sum faster also right

don't mix your goal of retirement with of government.

You need decide for yourself.

The government one is so called minimum.

 

[SKenny]

So what’s the use of top up $7k yearly to SA?
Other than lower our income tax ‘?

It can reach retirement sum faster also right

SA account also earn at least 4%, which in my opinion is one of the best return in this risk category.

The compounding effect of 4% over many years can be significant.

 

[endlssorrow]

Thinking to reduce tax mah

don't mix your goal of retirement with of government.

You need decide for yourself.

The government one is so called minimum.