CPF SA

[highsulphur]

i repeat this. value total assets rather than just cpf

if i have 500k cpf and 2 mil outside
and kenny has 1 mil cpf and 1 mil outside, i win.

and if kenny has 2 mil outside, he wins.

Pretty sure he has much more

 

[evokiller]

Quick question - I'm intending to do the voluntary cash top up to SA today for tax relief for this year 2020 assessment. Assuming the paynow QR has no issue, it should still work right (as long as I see the transaction appear dated today)?

Also I know cpf is advocating topping up in Jan for maximizing interest, but essentially if I top up only in Dec and continue to do so yearly, that can just be considered as i start topping up "1 year later" in terms of interest earned right? Just want to retain the flexibility of waiting till end of year and having more visibility of job prospects / stability before topping up so not sure if I top up today and another time in end Jan 2021, there's any other benefit besides the compound interest of additional 1 year's amount.

 

[zoneguard]

Quick question - I'm intending to do the voluntary cash top up to SA today for tax relief for this year 2020 assessment. Assuming the paynow QR has no issue, it should still work right (as long as I see the transaction appear dated today)?

Paynow is instant, you should see your updated SA balance in CPF portal/mobile app after the transfer.

Also I know cpf is advocating topping up in Jan for maximizing interest, but essentially if I top up only in Dec and continue to do so yearly, that can just be considered as i start topping up "1 year later" in terms of interest earned right? Just want to retain the flexibility of waiting till end of year and having more visibility of job prospects / stability before topping up so not sure if I top up today and another time in end Jan 2021, there's any other benefit besides the compound interest of additional 1 year's amount.

CPF computes interest based on lowest monthly balances, so your cash top-up in Dec 20 starts earning interest in Jan 21 and Jan 21's top-up earns interest from Feb 21.

 

[dork32]

Are we holding a net worth competition now?

this is not a competition. i am just giving an example

 

[dork32]

Pretty sure he has much more

it does not matter what he has. i dont care if he beats me or not. the world is so big. even if i beat him, there will be a lot who i lose to. even if i lose to him, there will be a lot that i beat.

i am just stating that cpf is not the only marker to compare.

 

[dork32]

Older people normally have higher net worth ba?

Not so sure.

understood right, older people have accumulated wealth for a long period of time.

 

[dork32]

Well, you probably “win” that comparison simply because your total net worth is $2.5 million to his $2.0 million (25% higher). But what if Kenny has $1 million in CPF and $1 million outside, while you have $500K in CPF and $1.5 million outside? Let’s assume the “outside” is the same type of asset. I say Kenny wins that alternative comparison. He can definitely copy your allocation if he wishes, at any time — just move $500K out of CPF to the other asset — but you probably cannot copy his. His portfolio is thus a perfect functional superset of yours in this example, so he likely wins, subject to a couple footnotes perhaps.

ok lah. my maths cannot make it.

yeah kenny is passed 55. he can shift his cpf money out. i am not.

on the other hand i can sell my property and refund it back to cpf. who says i cannot create his portfolio with my assets.

 

[rizhal]

Top up in Jan will get one more year compounded compare to Dec.
should do it 11 months ago.

 

[zoneguard]

on the other hand i can sell my property and refund it back to cpf. who says i cannot create his portfolio with my assets.

Money is fungible , you can recreate Uncle Kenny's portfolio in Singapore. But you cannot duplicate BBCW's portfolio because he also has USA's Social Security which has COLA and CPF LIFE's Escalating plan is a lousy cousin of SS.

 

[highsulphur]

Money is fungible , you can recreate Uncle Kenny's portfolio in Singapore. But you cannot duplicate BBCW's portfolio because he also has USA's Social Security which has COLA and CPF LIFE's Escalating plan is a lousy cousin of SS.

What makes you say Social Security is better than CPF Life?

 

[polyglob]

What makes you say Social Security is better than CPF Life?

He is referring to SS COLA - cost of living adjustment - versus CPF Life escalating.

 

[zoneguard]

What makes you say Social Security is better than CPF Life?

COLA. Cost of Living Adjustments. Always in line with inflation. If inflation here goes above 2% (of the Escalating plan), retirees who depend solely on CPF LIFE will be screwed.

 

[8zaoyu]

while i do respect uncle kenny, cpf is just one portion of our entire asset.

a person with a 1 mil property and 0 cpf is as good as a person with 0 property and 1 mil cpf.

0 property? Staying in parents' flat when you are already a high income earning adult over 21? Common lah, get a 1 bedder pte. OR if over 35 yrs old, get the max. size HDB resale. Anyway, the best scenario, is a fully paid housing loan before the Bank Loan rate reach 2.5% CPF OA after MOP/SSD, no need to depend on rental. To fully pay up a housing loan is tough, say the youngster don't want to a Mickey Minney bachelor/bachelorette unliveable claustophobic Mousepad!
Dealing with irresponsible tenants yearly or even half-yearly now is "what-ha"?

 

[BBCWatcher]

it does not matter what he has. i dont care if he beats me or not. the world is so big. even if i beat him, there will be a lot who i lose to. even if i lose to him, there will be a lot that i beat.

Currently Jeff Bezos "beats" everyone. And no, it's not a financial net worth contest -- agreed. If someone thinks it is, that someone has already lost.

understood right, older people have accumulated wealth for a long period of time.

Time is helpful. Relatedly, intergenerational timescales are even longer. As it happens, I'm increasingly concerned about excessive dynastic wealth and its negative effects on society at large.

on the other hand i can sell my property and refund it back to cpf. who says i cannot create his portfolio with my assets.

Yes, that's one of the footnotes.

Top up in Jan will get one more year compounded compare to Dec.
should do it 11 months ago.

I understand the hesitation to make a CPF top up for tax relief in late January instead of the end of the year, but I agree with Rizhal. Just make a reasonable forecast about the coming year. If it's highly likely you'll have enough liquidity, go right ahead and make the top up. If the year turns out otherwise, OK, so be it, but you're still getting 11 more months of interest, compounded thereafter.

What makes you say Social Security is better than CPF Life?

They're two different programs. In some ways U.S. Social Security is "better," and in other ways CPF LIFE is "better." For most people it's a moot point since you don't often get to choose.

If you are the rare individual who has some measure of choice in this area (you can decide whether to work in the U.S. for roughly a decade or more, for example), here are some things to like about U.S. Social Security:

* The maximum contribution rate is lower (currently 15.3% employer and employee combined);
* Relatedly, it doesn't include CPF Ordinary Accounts (basically no forced savings for housing);
* Since it's a defined benefit program, it has stronger insurance protections for early to mid career individuals;
* It explicitly recognizes and protects spouses, including same sex spouses and sometimes even ex-spouses;
* In many respects it's simpler to understand and manage;
* Open to citizens, permanent residents, and visiting foreigners alike;
* Interoperates to a certain extent with other countries' social insurance systems via social security treaties;
* Benefits are payable just about worldwide, so if you want your monthly check deposited directly into your POSB account in Singapore or your HSBC account in London, you can. Reportedly the Social Security Administration does a good job keeping bank fees in check and offering good exchange rates.
* It doesn't offer many service centers outside the United States, but it offers some.
* Yes, the cost of living increases are pegged to the U.S. Consumer Price Index. However, the nominal payout won't decrease in periods of deflation. Inflation increases resume once the CPI passes its previous high.
* You can start retirement payouts as early as age 62 if you wish. It's not generally a good idea, but you have that flexibility.
* The retirement payout amount can often be much higher than ERS-level CPF LIFE.

Here are some things to like about CPF LIFE:

* It's always a good deal in financial terms.
* The sovereign government that operates CPF LIFE might have a slight edge in terms of quality stewardship.
* You have greater effective choice in the relative size of your retirement payouts (BRS/FRS/ERS).
* There are no Singapore taxes associated with CPF LIFE. (U.S. Social Security benefit recipients sometimes owe U.S. income tax on their benefits.)
* While it certainly has its problems as a bequest vehicle (it isn't a very good one), it makes the attempt.
* You're "vested" from dollar one.
* At least if you're a Singaporean citizen it's possible to contribute even while living and working outside Singapore, or while nonworking. (U.S. Social Security offers no voluntary contribution options as such.)

 

[light84]

Why dun push another 7K into SRS 2day?

Still thinking because withdrawal is 62 and if the tax savings outweighs the cost of liquidity

Anyway it’s too late now

 

[david_yyy]

I top up SA using enet on today, will I get tax relief?

Sent from Samsung SM-N975F using GAGT

 

[BBCWatcher]

I top up SA using enet on today, will I get tax relief?

eNETS today (December 31)? Well, congratulations, you're probably the very first in line to get tax relief based on next year's (2021's) income (Year of Assessment 2022).

Check your online CPF statement. If your eNETS-based contribution hasn't been credited, it's most unlikely it'll be credited in 2020. If you want a SA contribution credited within 2020, use PayNow QR today (December 31) and try again. Then you'll have your 2020 and 2021 SA top ups done.

Lesson learned, right?

 

[sunbox]

When should we top-up 7K in SA for 2021. Early Jan or late Jan 2021?

 

[cal3135]

Nearing end of Jan. Interest of 7k only starts following month Feb.

When should we top-up 7K in SA for 2021. Early Jan or late Jan 2021?

i12 HardwareZone Forums app

 

[zoneguard]

When should we top-up 7K in SA for 2021. Early Jan or late Jan 2021?

31 Jan 2021 with Paynow, to maximize bank interest (Jan 2021) and CPF interest from Feb 2021 (computes based on lowest monthly balance)