CPF SA

[dork32]

lets say i have 40k in sa and 40k in ma and bhs is 60k for many years. my sa and ma increase is 5k per year.

if i put 7k into sa, and i wait for 5 years.
my ma will have 65k. 60k in ma and 5 k overflow into sa
my sa will have 40k + 7k (top up) + 25k (annual increase) + 5k(overflow) = 77k

if i put 7k into ma and wait 5 years,
my ma will have 72 k. 60k in ma and 12k overflow into sa.
my sa will have 40k + 25k(annual increase) + 12 k = 77k.

i say again and again. there is no difference if you are topping up less than 7k for tax relief.

if you are taking bhs as a limiting factor, then topping up sa first could be better, if you have only 7k. not putting anything into your ma means your ma will not reach bhs anytime soon. this will allow a more than 7k top up in the future

edit:sory change 72k to 77k

 

[reddevil0728]

i already say many times, i am not telling them not to top up. if you are comfortable, you can top up any time in the year. top up your sa first. at the end of the year, if there are gaps for ma top up then do it.

you also mentioned that everyone is different. i did not top up. i prefer to keep liquid assets to buy properties, dabble in shares and i dont really believe in aaa rated 30 year bonds. if you prefer to top up, there is nothing wrong with it. it is just topping up ma and sa is no different for most of the cases

Yep. Point is, you are portraying it from the angle of, if you are in your early career... you wouldn’t have money... etc.

That sort of commentary not necessary ma. People can decide whether they have the money or not. We don’t have to tell them that.

 

[Kaypohji]

I would think put in MA If u really want the tax relief

My objective is to maximize my SA and OA. Maximizing tax relief is not my primary concern.... unless the tax relief I can reinvest by putting it back into cpf, which I can I guess by topping up next year

My another objective is to allow rooms for me to choose brs or frs. if I too up under RSTU, I will almost definitely need to choose FRS. it’s not bad but I want to preserve the choice now

 

[reddevil0728]

not all because there are people that have 180k to spare at the age of 25. most of us dont. and if you dont, why bother about this option of topping 180k at the age of 25?

Why don’t we just ignore “all”, “most” and “some”. Why don’t just give information on the perspective of what can be done and people of all spectrums can decide what works for them?

 

[dork32]

Please note that "early career" is shorthand, a generalization. For example, new Permanent Residents might be mid-career, but they're early in their CPF "career."

note i used the word most. singaporeans outnumber prs 7 to 1. is using the word most unfair?

 

[reddevil0728]

exactly, this should be that way to go.

wait top up which account first? sa, right?

this wat i said, it does not matter, sa or ma

There is no one way of doing things. If someone knows they gonna have a lot of medical expenses that year and they know based on projection they wouldn’t hit their cap, they can always choose to top up their MA first no?

 

[dork32]

Why don’t we just ignore “all”, “most” and “some”. Why don’t just give information on the perspective of what can be done and people of all spectrums can decide what works for them?

yes, the info given is if you are topping 7k or less it does not matter whether it is to the ma or sa

 

[reddevil0728]

lets say i have 40k in sa and 40k in ma and bhs is 60k for many years. my sa and ma increase is 5k per year.

if i put 7k into sa, and i wait for 5 years.
my ma will have 65k. 60k in ma and 5 k overflow into sa
my sa will have 40k + 7k (top up) + 25k (annual increase) + 5k(overflow) = 77k

if i put 7k into ma and wait 5 years,
my ma will have 72 k. 60k in ma and 12k overflow into sa.
my sa will have 40k + 25k(annual increase) + 12 k = 72k.

i say again and again. there is no difference if you are topping up less than 7k for tax relief.

if you are taking bhs as a limiting factor, then topping up sa first could be better, if you have only 7k. not putting anything into your ma means your ma will not reach bhs anytime soon. this will allow a more than 7k top up in the future

Different strokes for different forks lor.

It’s like there’s no difference to eat food from a round plate vs a square plate. But some just prefers to eat from a round one over a square one. It’s for them to decide.

 

[dork32]

I would think put in MA If u really want the tax relief

i already say, no difference between ma and sa.

My objective is to maximize my SA and OA. Maximizing tax relief is not my primary concern.... unless the tax relief I can reinvest by putting it back into cpf, which I can I guess by topping up next year

.
to me tax relief is better cpf. it is real cold hard cash. you can choose to put it back to the cpf if you like to or do anything you like with it

]My another objective is to allow rooms for me to choose brs or frs. if I too up under RSTU, I will almost definitely need to choose FRS. it’s not bad but I want to preserve the choice now

this is a very valid point. ra top up would mean kissing goodbye to the brs option.

 

[reddevil0728]

Can reformat? Can’t tell which is what you comment and which is quoted^

 

[dork32]

There is no one way of doing things. If someone knows they gonna have a lot of medical expenses that year and they know based on projection they wouldn’t hit their cap, they can always choose to top up their MA first no?

wonderful, this is wat i am driving at. sa or ma also not much difference

 

[dork32]

Different strokes for different forks lor.

It’s like there’s no difference to eat food from a round plate vs a square plate. But some just prefers to eat from a round one over a square one. It’s for them to decide.

i already say many times. someone here is trying to convince others that ma is better than sa. it is not me. i am saying it is the same.

 

[dork32]

Can reformat? Can tell which is what you comment and which is quoted^

sorry will do

 

[iceblendedchoc]

To me got difference. Balance of SA can still withdraw after meeting FRS at 55 But MA can only bequests after you died

 

[BBCWatcher]

My objective is to maximize my SA and OA. Maximizing tax relief is not my primary concern.... unless the tax relief I can reinvest by putting it back into cpf, which I can I guess by topping up next year

You certainly can do that. Tax relief has value.

My another objective is to allow rooms for me to choose brs or frs. if I too up under RSTU, I will almost definitely need to choose FRS. it’s not bad but I want to preserve the choice now

As it happens I don't think you should plan or need to reduce your Retirement Account. That's a plan to shoot yourself in the foot, usually. However, that's something of another "tie breaker" in deciding whether a savings dollar you've earmarked for CPF, with tax relief, ought to go into MA or SA (if you have both choices available).

note i used the word most. singaporeans outnumber prs 7 to 1. is using the word most unfair?

I don't know what you're referring to here. I used the words "For example," and new PRs are among those who have high confidence they can top up their MAs without fear of exceeding the CPF Annual Limit. But an example is only an example, not exhaustive.

The median individual compensation from employment in Singapore is quite significantly below $102,000 (excluding the employer's contribution), the minimum earned income required to hit the CPF Annual Limit. Consequently we know there are huge numbers of workers -- the majority, in fact -- who don't hit the CPF Annual Limit. However, there's a early/mid/late career skew. Early career it's easier to have high confidence you won't hit the CPF Annual Limit. Later, it can get tougher. This is really all quite logical and shouldn't be controversial. It's what the available data show.

 

[dork32]

To me got difference. Balance of SA can still withdraw after meeting FRS at 55 But MA can only bequests after you died

i also mentioned this before. this is a very valid point.

but we are tokking up topping up. if you top up sa or ma, after a few years, you will realized both accounts will have the same amount of money, regardless of the options chosen.

 

[BBCWatcher]

To me got difference. Balance of SA can still withdraw after meeting FRS at 55 But MA can only bequests after you died

That's not factually true. You can use MA funds for all qualified medical expenses in Singapore, and qualified premiums, up to applicable limits -- for you and for any qualified family members. (Qualified family members can be citizens, PRs, and/or foreigners.) At any age, even immediately after you deposit funds into MA. Moreover, you (citizens and PRs) are required to contribute to MediSave if you earn income from work in Singapore, whether employed or self-employed. There is no choice here: funds are definitely going into MediSave if you earn income from work in Singapore.

The only question on the floor here is where your next dollar of discretionary savings should go if you're trying to decide between MA and SA, with tax relief, and both options are available.

I happen to agree with Dork32 that your MA is highly likely to hit the Basic Healthcare Sum at least at some point, typically/commonly, so I don't think it's at all worth worrying about trying to keep your MA below the BHS. That's just not going to be possible under reasonable assumptions. So you might as well make the most of it.

 

[dork32]

if you are taking bhs as a limiting factor, then topping up sa first could be better, if you have only 7k. not putting anything into your ma means your ma will not reach bhs anytime soon. this will allow a more than 7k top up in the future

bbc wat can you say about this?

 

[BBCWatcher]

if you are taking bhs as a limiting factor, then topping up sa first could be better, if you have only 7k. not putting anything into your ma means your ma will not reach bhs anytime soon. this will allow a more than 7k top up in the future

bbc wat can you say about this?

What you suggest doesn't really work in practice quite often. First of all, the BHS is much lower than the FRS. Second, the allocation to MA is higher than SA before age 50. Third, the CPF Annual Limit is a constraint to MA top ups. Fourth, SA top ups are gated by $7,000/year limits, which means you've got to pace them anyway if you want the tax relief. It's just plain harder to squeeze in MA top ups with tax relief for these reasons, so it's only sensible to prioritize the more perishable deal on the table first if they're equal deals otherwise. And they're not: MA is a little better when you're earlier in a career for the reasons I've described, especially the fact MA dollars can be useful at any/every age.

Of course you can do both, but I'm explaining the logic after you've decided you have at least one dollar available to put into CPF with tax relief, and you have a choice between MA and SA. Which should you prioritize? I lean a little bit in favor of MA for all the reasons I've described.

 

[dork32]

What you suggest doesn't really work in practice quite often. First of all, the BHS is much lower than the FRS. Second, the allocation to MA is higher than SA before age 50. Third, the CPF Annual Limit is a constraint to MA top ups. Fourth, SA top ups are gated by $7,000/year limits, which means you've got to pace them anyway if you want the tax relief. It's just plain harder to squeeze in MA top ups with tax relief for these reasons, so it's only sensible to prioritize the more perishable deal on the table first if they're equal deals otherwise. And they're not: MA is a little better when you're earlier in a career for the reasons I've described, especially the fact MA dollars can be useful at any/every age.

Of course you can do both, but I'm explaining the logic after you've decided you have at least one dollar available to put into CPF with tax relief, and you have a choice between MA and SA. Which should you prioritize? I lean a little bit in favor of MA for all the reasons I've described.

maybe you dont know what i meant.

let say i have 30k in sa and 30k in ma now. my annual increase of sa and ma is 5k

and i have 5k to topup for my first three years and 10k to top up on my forth year.

after 3 years, if i top up my 5k into the sa.
my ma will have 30k + 15k (annual increase) =45k
my sa will have 30k + 15k (annual increase) + 15k(top up) = 60k.
on the fourth year, i can top up 7k into sa and 3 k into ma to run tax.

after 3 years, if i top up ma,
my ma will have 30k + 15k (annual increase) + 15k(top up) = 60k.
my sa will have 30k + 15k (annual increase) =45k
on the fourth year, i can only top up 7k to run tax coz my ma already at bhs