CPF SA

[yokine3a]

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.

Thanks for sharing your thoughts. I still have few years before reaching 55, but started to think how to tap into my cpf atm machine.

 

[BBCWatcher]

Other than tax relief, sa allows contributions to continue to come in and accumulate but for ma, it will go into OA after both sa and Ma is maxed. So the interest effect is lower than sa.

I don’t understand what you’re trying to say here. Would you elaborate? There should be no change in interest earning if MA fills up faster than SA versus the other way around. MA and SA earn identical interest.

 

[BBCWatcher]

Not when closer to 55. The earlier the better. Once SA reaches FRS amount early, you are all set. The amount will keep running farther away from the annual FRS amount and with further contributions from work, you gonna have a huge SA to shield at 55. If can afford to top up one go into SA to reach FRS, the better.

SA top ups if early and/or big enough evidently reduce the amount of SA you can shield (raise the minimum you have to leave behind above $49,000), so just bear that in mind.

 

[Kaypohji]

When ma reached the cap of bhs, its interest and further contributions flow to sa or oa. So if u have both sa and Ma maxed, it goes to oa earning 2.5% only. I mean the excess amount out of bhs will not get to enjoy 4% interest rate.

Sa is different... even if u have reached frs, ur further contribution and interest can still remain in sa to compound at 4% further. It is not forced to go to oa at 2.5%

So if u max sa early, it doesn’t affect ur interest rate. All ur further contribution and interest continues to remain in sa for 4%. Make no diff.

I don’t understand what you’re trying to say here. Would you elaborate? There should be no change in interest earning if MA fills up faster than SA versus the other way around. MA and SA earn identical interest.

 

[henrylbh]

SA top ups if early and/or big enough evidently reduce the amount of SA you can shield (raise the minimum you have to leave behind above $49,000), so just bear that in mind.

 

[BBCWatcher]

When ma reached the cap of bhs, its interest and further contributions flow to sa or oa. So if u have both sa and Ma maxed, it goes to oa earning 2.5% only. I mean the excess amount out of bhs will not get to enjoy 4% interest rate.

Sa is different... even if u have reached frs, ur further contribution and interest can still remain in sa to compound at 4% further. It is not forced to go to oa at 2.5%

So if u max sa early, it doesn’t affect ur interest rate. All ur further contribution and interest continues to remain in sa for 4%. Make no diff.

OK, so if I understand correctly you’re concerned about what happens to compulsory contribution flows if you have MA at the BHS and SA at the FRS. I’ll probably have to run a simulation to illustrate, but for now I’d point out that you still have a lot of compulsory contributions landing in MA even when it reaches the BHS. That happens when the BHS increases every January, opening up room for compulsory contributions (and possibly voluntary for that matter). Any time you pay your own or a family member’s MediShield Life, CareShield Life, ElderShield, or Integrated Shield premium you open up some space. (I’m assuming AMCS doesn’t apply here.) Anyway, it’s not as if you reach the BHS and all ends. You’re still putting funds into MA in typical scenarios.

 

[BBCWatcher]

The CPF Board explains that RSTU Scheme monies cannot be used for investments. Assuming that information is correct, “modest” top ups (at or below $40,000 just before age 55) won’t matter for shielding purposes since you have to leave behind at least $40,000 anyway. But if your RSTU Scheme injections are significant enough by age 54.9 then it could limit how much you can shield.

Follow the logic?

 

[Kaypohji]

Yup u got what I mean.

I tried to run a simulation earlier... seems like having reached frs earlier (putting money into sa instead of ma) is better meaning having more money at the end of 65... contributions are the same throughout the two scenario but cpf balance in first scenario is more than the second by a bit with higher sa and oa balance by a bit too. Diff aint big like low few k only. But then the first scenario has no cash aka tax relief. So I can’t say for sure which option is better.

But I’m not sure if I’m doing it right.

Yes u r right. Still got expenses have to be deducted from Ma. So there will always be room... so this also brings another concern for me. If I can’t hit Ma ceiling, then what’s the point of me topping up ma? If I were to top up Ma, it’s because I hope to hit the ceiling so that the rest can overflow to other accounts so I can have more for retirement....

OK, so if I understand correctly you’re concerned about what happens to compulsory contribution flows if you have MA at the BHS and SA at the FRS. I’ll probably have to run a simulation to illustrate, but for now I’d point out that you still have a lot of compulsory contributions landing in MA even when it reaches the BHS. That happens when the BHS increases every January, opening up room for compulsory contributions (and possibly voluntary for that matter). Any time you pay your own or a family member’s MediShield Life, CareShield Life, ElderShield, or Integrated Shield premium you open up some space. (I’m assuming AMCS doesn’t apply here.) Anyway, it’s not as if you reach the BHS and all ends. You’re still putting funds into MA in typical scenarios.

 

[reddevil0728]

Yup u got what I mean.

I tried to run a simulation earlier... seems like having reached frs earlier (putting money into sa instead of ma) is better meaning having more money at the end of 65... contributions are the same throughout the two scenario but cpf balance in first scenario is more than the second by a bit with higher sa and oa balance by a bit too. Diff aint big like low few k only. But then the first scenario has no cash aka tax relief. So I can’t say for sure which option is better.

But I’m not sure if I’m doing it right.

Yes u r right. Still got expenses have to be deducted from Ma. So there will always be room... so this also brings another concern for me. If I can’t hit Ma ceiling, then what’s the point of me topping up ma? If I were to top up Ma, it’s because I hope to hit the ceiling so that the rest can overflow to other accounts so I can have more for retirement....

Is there a comprehensive list of "CPF Hacks" that is available in one location that can be referred to easily?

 

[BBCWatcher]

Still got expenses have to be deducted from Ma. So there will always be room... so this also brings another concern for me. If I can’t hit Ma ceiling, then what’s the point of me topping up ma? If I were to top up Ma, it’s because I hope to hit the ceiling so that the rest can overflow to other accounts so I can have more for retirement....

The tax relief and interest are still attractive, so that’s why you’d squeeze in MA top ups if allowed. Pretty simple, really. You lose one month of interest on a typical MediSave payout (an Integrated Shield base plan premium payment for example), but if you can swoop in with a top up for tax relief, great.

 

[henrylbh]

The CPF Board explains that RSTU Scheme monies cannot be used for investments. Assuming that information is correct, “modest” top ups (at or below $40,000 just before age 55) won’t matter for shielding purposes since you have to leave behind at least $40,000 anyway. But if your RSTU Scheme injections are significant enough by age 54.9 then it could limit how much you can shield.

Follow the logic?

Why need to be fixated with shielding?

 

[maple96]

Why need to be fixated with shielding?

Who had/has been preaching the SA Hack and telling everyone only $40k cannot be invested under the CPFIS/SA scheme, even tho JuniorLion highlighted to him that his SA topup+interest are reserved since a few years ago?

Who had/has been preaching to do SA cash topup is better to get tax relief of $7k all the while, instead of OA to SA transfer asap if u dun need it?

Who FIRST/Recently warn of what JuniorLion highlighted now in this thread and other CPF threads?

Who has been telling everyone that u need not bother/worry about SA cash topup+interest (the chain effect) if u dun want to be poor/destitute by choosing BRS?

Who is now reiterating, repeating, fixated with it now?

("Sometimes we need to know when to stop arguing and let others be wrong")

 

[BBCWatcher]

Why need to be fixated with shielding?

“Fixated”? You asked, and I’m politely answering your question. It’s a fairly speculative factor for consideration and may, as something of a “tie breaker,” help inform whether one prioritizes MA or SA top ups for tax relief.

 

[The_Davis]

Waiting for news after elections that shield will be fixed.

 

[henrylbh]

Waiting for news after elections that shield will be fixed.

No doubt, the shielding is a no brainer for some

But why care about shielding and to a lesser extent tax relief in planning to max your CPF? You have one and only chance to buy a 30 years AAA bond early.

 

[maple96]

No doubt, the shielding is a no brainer for some

But why care about shielding and to a lesser extent tax relief in planning to max your CPF? You have one and only chance to buy a 30 years AAA bond early.

Now u/I know why I call u Uncle Henry!

 

[BBCWatcher]

But why care about shielding and to a lesser extent tax relief in planning to max your CPF? You have one and only chance to buy a 30 years AAA bond early.

I think that’s overstated. You have MA and SA choices, plus some others. It’s entirely reasonable to figure out what amounts and priorities are most likely to work best for you.

 

[Andrew833]

No doubt, the shielding is a no brainer for some

But why care about shielding and to a lesser extent tax relief in planning to max your CPF? You have one and only chance to buy a 30 years AAA bond early.

Too late, can't go back 30 years to buy the 30 years AAA bond.

 

[Andrew833]

I think that’s overstated. You have MA and SA choices, plus some others. It’s entirely reasonable to figure out what amounts and priorities are most likely to work best for you.

I really don't understand why you keep telling ppl to go for MA instead of SA.

Just base on salary with no top up, MA can be max before you turn 50. But if you do nothing SA is only half of FRS.

 

[rrr2015]

to me it's maths/stats which are used to estimate healthcare inflation. e.g for medical costs between $100 ~ $1000 vs $100 ~ $10000, surely we get a higher costs increase if based on latter? am assuming it's estimate the same way as other kind of inflation

anyway let's get back to SA, nothing much we can do about rising healthcare costs

Actually nothing to do with math of stats? It’s just looking at one number being higher than the other
Increase in ma withdrawal is a function of increase in healthcare cost.