CPF SA

[celtosaxon]

Hi, I read that topping up $7000 to SA annually with cash is the best recommendation around here. Is there any advantage to topping up more than 7000 for that 4%?

You can top up SA to all the way to FRS and start earning 4% on whatever you put in there. But, you can only get the tax deduction on the $7,000 each year, and once you reach FRS you can’t do any more SA top ups.

 

[BBCWatcher]

Hi, I read that topping up $7000 to SA annually with cash is the best recommendation around here.

Best for what? Voluntary Contributions to MediSave are pretty darn good, too.

Is there any advantage to topping up more than 7000 for that 4%?

There can be, sure. For example, it’s a terrific way to protect a chunk of money against hostile creditors and judges. As another example, it can be a pretty fantastic way for a young dual citizen (Singaporean and other) expecting to keep her other citizenship (and thus lose Singapore citizenship after age 20) to save for university or a home down payment. There’s some foreign exchange risk, but the 4+% interest is compelling. As yet another example, it could be a brilliant way to nail down a future retirement income stream for someone who is reckless, irresponsible, or otherwise likely to be destitute at age 65+, such as a compulsive gambler.

I’m barely scratching the surface, really. There are several occasions when topping up SA by more than $7,000/year is a great idea.

 

[celtosaxon]

Best for what? Voluntary Contributions to MediSave are pretty darn good, too.

I’m also considering a VC to my wife’s MA on top of the $7,000 to SA. Her company pays no bonus, so $30,000 x 37% = $11,100. The thing that makes me hesitate is that the funds are quite restricted and usable in SG only.

 

[OngHuatHuat]

Just take it as a bond fund that pays 4 + 1 perpetually, you will be fine.

I’m also considering a VC to my wife’s MA on top of the $7,000 to SA. Her company pays no bonus, so $30,000 x 37% = $11,100. The thing that makes me hesitate is that the funds are quite restricted and usable in SG only.

 

[stealth0128]

I understand the benefits of topping up SA with either cash or OA or both. Correct me if I'm wrong, but this is provided I do not plan to upgrade my house, since my OA or cash would have been locked in SA, right? There's still a good 20 years before I turn 55 and I'm not sure if I want to make a hard decision on that.

Or, should I use the returns from the sale of the house (CPF+cash) to upgrade and borrow the balance from HDB/bank again?

 

[OngHuatHuat]

I emptied OA just put all in SA, then save monthly on my own to upgrade.

I understand the benefits of topping up SA with either cash or OA or both. Correct me if I'm wrong, but this is provided I do not plan to upgrade my house, since my OA or cash would have been locked in SA, right? There's still a good 20 years before I turn 55 and I'm not sure if I want to make a hard decision on that.

Or, should I use the returns from the sale of the house (CPF+cash) to upgrade and borrow the balance from HDB/bank again?

 

[dork32]

I emptied OA just put all in SA, then save monthly on my own to upgrade.

you can survive on 700 per month. you have cash and do not need oa to finance your house.

most sinkies need oa to buy house. you are not even a sinky

 

[peacefulday]

I understand the benefits of topping up SA with either cash or OA or both. Correct me if I'm wrong, but this is provided I do not plan to upgrade my house, since my OA or cash would have been locked in SA, right? There's still a good 20 years before I turn 55 and I'm not sure if I want to make a hard decision on that.

Or, should I use the returns from the sale of the house (CPF+cash) to upgrade and borrow the balance from HDB/bank again?

I emptied OA to SA and spouse SA too as we no need use OA for housing anymore.

 

[peacefulday]

I emptied OA to SA and spouse SA too as we no need use OA for housing anymore.

my plan is not to make any withdrawal at 55, and after the cpf RA formed just let the remain in OA/SA compound interest roll over act as a term insurance coverage.

 

[ranchfarm]

Best for what? Voluntary Contributions to MediSave are pretty darn good, too.


There can be, sure. For example, it’s a terrific way to protect a chunk of money against hostile creditors and judges. As another example, it can be a pretty fantastic way for a young dual citizen (Singaporean and other) expecting to keep her other citizenship (and thus lose Singapore citizenship after age 20) to save for university or a home down payment. There’s some foreign exchange risk, but the 4+% interest is compelling. As yet another example, it could be a brilliant way to nail down a future retirement income stream for someone who is reckless, irresponsible, or otherwise likely to be destitute at age 65+, such as a compulsive gambler.

I’m barely scratching the surface, really. There are several occasions when topping up SA by more than $7,000/year is a great idea.

Thanks. My MA has reached BHS ($60000) so I think I'm unable to top up.
Just wondering if topping up to FRS is a good way to go since I'm not confident in getting equivalent returns with investing (even though I'm dabbling in it).

 

[reddevil0728]

Thanks. My MA has reached BHS ($60000) so I think I'm unable to top up.
Just wondering if topping up to FRS is a good way to go since I'm not confident in getting equivalent returns with investing (even though I'm dabbling in it).

If you are willing to lose liquidity why not?

 

[Nofear40]

Via top-up, cap is FRS.
Via contributions, no cap but annual contribution limit to all 3 accounts of $37,740.

Any tax relief on VC?

 

[OngHuatHuat]

For self employed yes, not so for employee, since you already have tax relief on employee contribution.

Any tax relief on VC?

 

[celtosaxon]

Any tax relief on VC?

You can get tax relief for VC to MA if...

1. VC does not exceed BHS
2. MCs are below $37,740 [edit] for the year

 

[reddevil0728]

You can get tax relief for VC to MA if...

1. VC does not exceed BHS
2. MCs are below $35,740 for the year

Why 35????

 

[ocs_woodlands]

Why 35????

cpf max contribution per year (no matter how it gets into CPF) is 0.37 x 6k x 17

 

[reddevil0728]

cpf max contribution per year (no matter how it gets into CPF) is 0.37 x 6k x 17

isn't that 37,740 rather than 35,740?

 

[Sinkie]

How to transfer OA to your children OA? The children must be 21?

 

[Okenba]

How to transfer OA to your children OA? The children must be 21?

Children have CPF soon as they are born. You can drop CPF an email to link their account to yours so you can check how much they have in their account.

 

[Sinkie]

Children have CPF soon as they are born. You can drop CPF an email to link their account to yours so you can check how much they have in their account.

How to transfer my own OA (not with cash) to my child OA account

Sorry if you misinterpreted