CPF Top up questions

[crimsontactics]

Anyone ALWAYS tops up CPF accounts at end of year to reduce taxes?

Depends lor.

If you are putting a huge lump sum like I did, best to do it as soon as possible to earn more interest.

Sent from . using GAGT

 

[Perisher]

Still stops at 65 while the 4% i/r continues on and after 65.

So the correct way is to wait till you die then calculate.

Sent from . using GAGT

Ok, if you prefer to think of it that way... while it increase for 65 years and only stop while you start drawing down...

 

[crimsontactics]

Ok, if you prefer to think of it that way... while it increase for 65 years and only stop while you start drawing down...

Can explain the drawing down part?

Sent from . using GAGT

 

[testerjp]

The inflation comes from the pioneer generation handouts to win PAP votes and the new citizens who have zero in their medisave. You pay the bill and what goes up won't come down.

410k rubbish bin also acceptable, so of course 4.8% inflation is justifiable. Your children will thank you a lot for the kind thoughts when they realise that their FRS + BHS reach 2 million bucks.

 

[Perisher]

Can explain the drawing down part?

Sent from . using GAGT

Taking money out.

 

[elnewbie]

Henry,

Need your help on this hypothetical question.

Suppose over the years I transferred 100k from my OA to my mum's RA.

My mum then designates someone else as her sole nominee.

My mum dies, leaving a final RA balance of 90k and an MA balance of 10K.

How much will i get back in my OA and how much will the nominee get ?

Yes only principal will be returned. But nothing to be concerned if recipient is getting monthly payout as what is left is unlikely to contain interest.

From Nov 2013, I have transferred a total of 131k to my father's RA and the interest earned since then was $13.8k but at end of 2017 his RA balance is about 90k due to payout.

 

[henrylbh]

Still stops at 65 while the 4% i/r continues on and after 65.

So the correct way is to wait till you die then calculate.

Sent from . using GAGT

Contributions will go into MA beyond 65, but the cap is determined at 65.

 

[hwmook]

The inflation comes from the pioneer generation handouts to win PAP votes and the new citizens who have zero in their medisave. You pay the bill and what goes up won't come down.

410k rubbish bin also acceptable, so of course 4.8% inflation is justifiable. Your children will thank you a lot for the kind thoughts when they realise that their FRS + BHS reach 2 million bucks.

Medishield premium increase is due to improved coverage for the oldies and paid mainly by the younger generation. What has it got to do with new citizens? New citizens does not have zero in medisave, PR also have CPF.

 

[henrylbh]

Henry,

Need your help on this hypothetical question.

Suppose over the years I transferred 100k from my OA to my mum's RA.

My mum then designates someone else as her sole nominee.

My mum dies, leaving a final RA balance of 90k and an MA balance of 10K.

How much will i get back in my OA and how much will the nominee get ?

From my understanding, 90k will go you despite she making a nomination. Other balances will go to her nominee. Even if you passed off before her, her RA balance will go back to your OA (then to your nominee) upon her demise.

 

[henrylbh]

Medishield premium increase is due to improved coverage for the oldies and paid mainly by the younger generation. What has it got to do with new citizens? New citizens does not have zero in medisave, PR also have CPF.

My father never had any medical insurance in his life. He is too old for any insurance and I can't afford the premium even if policy is available

Fortunately, medishield life became compulsory. He has little MA and the annual MSL premium is $612. TG, govt so good to top up his MA with $800 annually every Jul.

 

[hwmook]

My father never had any medical insurance in his life. He is too old for any insurance and I can't afford the premium even if policy is available

Fortunately, medishield life became compulsory. He has little MA and the annual MSL premium is $612. TG, govt so good to top up his MA with $800 annually every Jul.

I am one of those that paid for your father medishield life coverage. But it's a good thing for everybody so I am fine, I hope they also review the limit every 5 years or so. Medical insurance coverage is something everybody need, not endowment, ILP and whole life insurance.

 

[henrylbh]

I am one of those that paid for your father medishield life coverage. But it's a good thing for everybody so I am fine, I hope they also review the limit every 5 years or so. Medical insurance coverage is something everybody need, not endowment, ILP and whole life insurance.

May be may not be. Contributions from personal ncome tax has been overtaken by GST. In time to come, gst may overtake corporate tax and may be contributed more by visitors instead.

 

[hwmook]

Why the CPF annual limit is not reviewed yearly like the FRS? The past 2 adjustments was very significant.

 

[BBCWatcher]

Why the CPF annual limit is not reviewed yearly like the FRS?

The CPF Annual Limit was only quite recently changed, on January 1, 2016. It appears the government doesn't like to change the CPF Annual Limit too often because then employers would have to change their payroll systems' that much more often. Some employers would also see an increase in their labor costs, in the form of greater employer contributions for higher compensated workers.

However, it also appears the government aims for the salary ceiling to include the full wages for about 80% of workers. If and when wages deviate substantially, and a lot more than ~20% of workers are earning above the ceiling, they'll most likely change the limit.

They've also just given us (all of Singapore) a "backdoor" increase of the Annual Limit, on January 1, 2018, with the rise in the Additional Medisave Contribution Scheme (AMCS) limit. The AMCS limit was raised from $1,500 to $2,730 per year. The AMCS limit is above the CPF Annual Limit, and it's also allowed to bust through the Basic Healthcare Sum.

 

[edwinttt1978]

Henry,

Need your help on this hypothetical question.

Suppose over the years I transferred 100k from my OA to my mum's RA.

My mum then designates someone else as her sole nominee.

My mum dies, leaving a final RA balance of 90k and an MA balance of 10K.

How much will i get back in my OA and how much will the nominee get ?

WHAT HAPPENS TO TOP-UP MONIES IF RECIPIENT DIES ?

Will they be refunded? Cash top-ups made on/after Nov 1, 2008 will be treated as cash gifts to the recipient. Any remaining cash top-ups will be paid to the recipient's nominees based on his CPF nomination or will be transferred to the Public Trustee for distribution according to the intestacy laws if there is no nomination.

For CPF top-ups made on/after Nov 1, 2008, any remaining top-up monies will be returned to the giver's CPF account, capped at the principal top-up amount, that is, minus earned interest.

For cash and CPF top-ups made before Nov 1, 2008, the remaining top-up monies will be returned to the giver's Ordinary Account (OA), capped at the principal top-up amount. If the giver dies before the recipient, then upon the death of the recipient, the topped-up monies returned to the giver's CPF accounts will be paid to the giver's appointed nominees.

http://www.straitstimes.com/business/benefit-from-enhancements-to-cpf-system

 

[JuniorLion]

Why the CPF annual limit is not reviewed yearly like the FRS? The past 2 adjustments was very significant.

CPF is designed to benefit the masses, and not the rich. If CPF AL continues to rise yearly, they might hit 60k/year. The rich will get richer...

 

[hwmook]

CPF is designed to benefit the masses, and not the rich. If CPF AL continues to rise yearly, they might hit 60k/year. The rich will get richer...

The last time when it was raised in 2016, it was a 20% increase or 4% per year increase from 2011. I don't that is a issue, rising with FRS make it possible for future generations to meet the FRS itself.

 

[nexusfanboi]

The last time when it was raised in 2016, it was a 20% increase or 4% per year increase from 2011. I don't that is a issue, rising with FRS make it possible for future generations to meet the FRS itself.

The FRS is currently less than 5 times the annual limit. I don't see it as the bottleneck for someone not being able to meet the FRS for many many years.

I also believe that more people rather have the choice of whether their money goes to CPF than not. It will cost them political capital to raise it constantly (Hey your raise this year? It's gone into CPF now. Oh and that's going to happen every year too! ) It would also mean an increased labour cost.

 

[elnewbie]

Thanks. I've seen this before, but it doesn't answer my question to the level of granularity I require.

WHAT HAPPENS TO TOP-UP MONIES IF RECIPIENT DIES ?

Will they be refunded? Cash top-ups made on/after Nov 1, 2008 will be treated as cash gifts to the recipient. Any remaining cash top-ups will be paid to the recipient's nominees based on his CPF nomination or will be transferred to the Public Trustee for distribution according to the intestacy laws if there is no nomination.

For CPF top-ups made on/after Nov 1, 2008, any remaining top-up monies will be returned to the giver's CPF account, capped at the principal top-up amount, that is, minus earned interest.

For cash and CPF top-ups made before Nov 1, 2008, the remaining top-up monies will be returned to the giver's Ordinary Account (OA), capped at the principal top-up amount. If the giver dies before the recipient, then upon the death of the recipient, the topped-up monies returned to the giver's CPF accounts will be paid to the giver's appointed nominees.

http://www.straitstimes.com/business/benefit-from-enhancements-to-cpf-system

 

[BBCWatcher]

The FRS is currently less than 5 times the annual limit.

That doesn't really matter, does it? If your CPF Special Account balance is zero today, you (or any generous person) can deposit $171,000 (2018 Full Retirement Sum) into your Special Account, right now, in one go. The CPF Annual Limit does not apply to Special Account or Retirement Account top-ups.

As a separate matter, the government has announced plans to raise compulsory contribution rates for older workers (age 55 and above). Consequently there will be more earnings subject to compulsory contributions, perhaps as soon as January 1, 2019. (The government hasn't announced anything firm yet.) The government is under the impression that employers love older workers so much (or love them enough anyway) that it's OK to shift their contribution rates -- including employer contributions -- at least closer to the contribution percentages that the under 55s experience. Does everyone agree?

It seems a little odd that the government is pursuing that policy change while simultaneously pushing for Singaporeans to stay actively working. Increasing the contribution rate for workers age 55 and older would probably encourage some to leave the workforce, and I have my doubts about how employers will treat older workers who are suddenly "more expensive."