CPF SA

[lordofthering]

Henry so why is cpf not compounding it monthly? Wouldn't we be losing out on interest of interest in such a manner?

Your bank deposit is not compounded monthly.

 

[THEMIKOS]

Hey an idea came to my mind. Feasible?

Let’s go back to 2019. MA and SA limits were 57.2k and 176k right? So in dec, when interests are paid out, for those over 55, can u withdraw the interests instead of allowing the interest to fill up the new limit gap for 2020 (60k and 181k)?

Withdraw the interests and then u do a voluntary top up for MA and SA to limits. Use own interest money to claim tax rebates. Possible?

Both RA topup $5000 and MA topup $2800 (for Year 2020) are tax deductable, right?

My understanding is MA topup $2800 is counted towards CPF Annual Limit of $37K, while RA topup $5000 is not. Is this correct?

 

[Tiger9119]

Your bank deposit is not compounded monthly.

Why not? If bank interest is credited monthly, you start to earn interest on the interest from the previous month.

 

[Sisterh00d]

I am in my mid 20s, at which age is it recommended to pump in to SA? Thanks!

 

[henrylbh]

Hey an idea came to my mind. Feasible?

Let’s go back to 2019. MA and SA limits were 57.2k and 176k right? So in dec, when interests are paid out, for those over 55, can u withdraw the interests instead of allowing the interest to fill up the new limit gap for 2020 (60k and 181k)?

Withdraw the interests and then u do a voluntary top up for MA and SA to limits. Use own interest money to claim tax rebates. Possible?

Tax relief yes, but top up to SA not possible. Top up limit for RA is FRS at 55 for tax relief.

 

[crimsontactics]

I am in my mid 20s, at which age is it recommended to pump in to SA? Thanks!

As early as possible.

Sent from . using GAGT

 

[highsulphur]

I am in my mid 20s, at which age is it recommended to pump in to SA? Thanks!

Pump from where to SA?

Just keep enough liquidity for your housing needs

 

[BBCWatcher]

I am in my mid 20s, at which age is it recommended to pump in to SA? Thanks!

As early as possible.

I would prioritize MA ahead of SA, though. MA top ups must fit within the CPF Annual Limit and Basic Healthcare Sum.

 

[bossjiaksai]

Does anyone know if the annual limit refers to a the calendar year, or contribution year?

E.g: contributions in Jan 2020 are for Dec 2019 pay. So when I calculate whether to topup, should I project from Dec 2019 to Nov 2020, or from Jan 2020 to Dec 2020?

 

[highsulphur]

Does anyone know if the annual limit refers to a the calendar year, or contribution year?

E.g: contributions in Jan 2020 are for Dec 2019 pay. So when I calculate whether to topup, should I project from Dec 2019 to Nov 2020, or from Jan 2020 to Dec 2020?

For pay from Jan to Dec. Not the actual payment one month later

 

[iceblendedchoc]

Does anyone know if the annual limit refers to a the calendar year, or contribution year?

E.g: contributions in Jan 2020 are for Dec 2019 pay. So when I calculate whether to topup, should I project from Dec 2019 to Nov 2020, or from Jan 2020 to Dec 2020?

Calendar year

 

[Andrew833]

I have colourful printed statement from cpf every Jan, this is the paper I refering to.
So are you suggesting I should withdraw my accrued interest on end Dec instead?

Actually the colourful printed statement is send out late. So to view the interest, just log in online to see the statement and interest. Interest is counted for full year, after that interest is paid.
I think you can draw out early Jan.

 

[henrylbh]

For pay from Jan to Dec. Not the actual payment one month later

If bonus is paid in say May 2020 but for year 2019?

 

[highsulphur]

If bonus is paid in say May 2020 but for year 2019?

It's for 2020.

Just like that payment in May 2020 will be taxable for CY 2020

 

[reddevil0728]

If bonus is paid in say May 2020 but for year 2019?

That’s a business decision

 

[henrylbh]

It's for 2020.

Just like that payment in May 2020 will be taxable for CY 2020

Sorry rephrase my question CPF contribution.

Bonus for 2019 paid in Jan 2020.

Bonus for 2019 paid in May 2020.

 

[henrylbh]

That’s a business decision

cannot say it's wrong and cannot say it's right answer.

 

[Kaypohji]

Max ma first or sa

 

[highsulphur]

Sorry rephrase my question CPF contribution.

Bonus for 2019 paid in Jan 2020.

Bonus for 2019 paid in May 2020.

What matters is on which month's payslip it's reflected and deducted from. If your bonus is paid is Jan and the cpf portion is deducted in Jan (but paid into cpf in Feb), then Jan is the reference month for that payment.

 

[celtosaxon]

Max ma first or sa

It’s an interesting question. Here is my take:

Assuming you can get tax relief for both but had to choose one or the other, I would suggest it depends how close you are to 55. The closer you are to 55 the more you should prioritize on SA... because if you don’t max SA by 55 you can’t maximize the once in a lifetime SA shield maneuver to preserve what is arguably the most valueable account in CPF. Keep in mind that after 55 you can no longer top up SA or transfer OA to SA. This assumes you will have enough OA or cash to meet FRS (or BRS w/PP) at 55.