CPF Top up questions

[BBCWatcher]

So if I knew my MA will hit 60K by June via monthly MC, then now better dun waste time throw in $2800 liao? Cos in Jan 2021, CPF will refund me the $2800?

There's no refund of any portion of your $2,800 MA top up unless you exceed the CPF Annual Limit in 2020.

On the annual limit subject of $37740.
I’m a salaried employee and monthly MC is made.
Say by July, I hit AL alrdy, what happens to my monthly MC that the employer transfers to CPF board?? Thank you.

You're not going to hit the CPF Annual Limit via compulsory contributions that soon even if you do hit it in 2020. Let's assume you're earning at least $6,000 per month in regular salary for all 12 months in 2020. If that's so, and if your variable pay (bonuses, commissions, 13th month, etc.) totals $22,432 or less, you should have enough room below the CPF Annual Limit to squeeze in your entire $2,800 top up.

 

[articland05]

There's no refund of any portion of your $2,800 MA top up unless you exceed the CPF Annual Limit in 2020.


You're not going to hit the CPF Annual Limit via compulsory contributions that soon even if you do hit it in 2020. Let's assume you're earning at least $6,000 per month in regular salary for all 12 months in 2020. If that's so, and if your variable pay (bonuses, commissions, 13th month, etc.) totals $22,432 or less, you should have enough room below the CPF Annual Limit to squeeze in your entire $2,800 top up.

u mean assuming my 2020 MA alrdy reach 60k but I still do cash top up to MA, say, 5k, my MA will become 65k and no refund? of course, this is under the assumption I'm still within the CPF Annual Limit...

Sent from LGE LG-H990 using GAGT

 

[BBCWatcher]

u mean assuming my 2020 MA alrdy reach 60k but I still do cash top up to MA, say, 5k, my MA will become 65k and no refund? of course, this is under the assumption I'm still within the CPF Annual Limit...

No, and that's not the scenario you presented. Your MA top up must also fit within the Basic Healthcare Sum.

 

[highsulphur]

There's no refund of any portion of your $2,800 MA top up unless you exceed the CPF Annual Limit in 2020.


You're not going to hit the CPF Annual Limit via compulsory contributions that soon even if you do hit it in 2020. Let's assume you're earning at least $6,000 per month in regular salary for all 12 months in 2020. If that's so, and if your variable pay (bonuses, commissions, 13th month, etc.) totals $22,432 or less, you should have enough room below the CPF Annual Limit to squeeze in your entire $2,800 top up.

what happens if the variable pay exceeds $22,432 (ie i hit the CPF Annual Limit) and i top up $2800 now?

 

[decibel.]

Hi, just to check if OA transfer to SA is cap at FRS? So if I cash top up till FRS means I can't transfer from OA to SA anymore? In this case, why do cash top up to SA when OA transfer is good enough?

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[AvatarViper]

Hi, just to check if OA transfer to SA is cap at FRS? So if I cash top up till FRS means I can't transfer from OA to SA anymore? In this case, why do cash top up to SA when OA transfer is good enough?

Sent from HUAWEI VOG-L29 using GAGT

Yes. OA to SA is cap at FRS and same for cash to SA. CPF will throw an error if above $181k.

Some ppl want to topup cash for tax relief. I dont think u can get tax relief if transfer from OA to SA. another reason could be they are still servicing their HDB loan via OA.

 

[henrylbh]

We may make a guess based on last few years statistics which +2.5k/year BRS

FRS, then known as min sum, increased annually by fixed amount of 5k from 40k in Jul 1995 to 80k in Jul 2003 before dropping to 4.5k the year after and then increased by 5.5k.

 

[vectorguru]

FRS, then known as min sum, increased annually by fixed amount of 5k from 40k in Jul 1995 to 80k in Jul 2003 before dropping to 4.5k the year after and then increased by 5.5k.

yes, for me, i am working towards the FRS to be around 290k (based on my own projections) for my cohort reaching 55yo in the Year 2030 (in 10yrs time). The BHS projection for myself is about 98k.

 

[AvatarViper]

yes, for me, i am working towards the FRS to be around 290k (based on my own projections) for my cohort reaching 55yo in the Year 2030 (in 10yrs time). The BHS projection for myself is about 98k.

can i ask how u do your projection? assume $5k yearly increase,

10yrs = $50k
2030 FRS = $181k+50k=$231k only

 

[vectorguru]

can i ask how u do your projection? assume $5k yearly increase,

10yrs = $50k
2030 FRS = $181k+50k=$231k only

oh, i use 181k x 1.05(to the power of 10)

 

[BBCWatcher]

what happens if the variable pay exceeds $22,432 (ie i hit the CPF Annual Limit) and i top up $2800 now?

Assuming you also earn at least $6,000 per month for 12 months (gross, not counting compulsory CPF contributions), and assuming my math is correct, the portion of your $2,800 top up that exceeds the CPF Annual Limit would be returned without interest.

Bottom line: try to forecast how much room (if any) you'll have below the CPF Annual Limit in 2020.

 

[juelim]

u mean assuming my 2020 MA alrdy reach 60k but I still do cash top up to MA, say, 5k, my MA will become 65k and no refund? of course, this is under the assumption I'm still within the CPF Annual Limit...

Sent from LGE LG-H990 using GAGT

Your MA will never go above the BHS, i.e. $60K for 2020. Once that ceiling is reached, the contribution to the MA will be diverted to the SA, and if that has reached the FRS, it will be diverted to the OA.

The refund is only for the cash top up to the MA, should your mandatory contribution to CPF (including the employer part) exceeds $37,740 for 2020.

 

[juelim]

what happens if the variable pay exceeds $22,432 (ie i hit the CPF Annual Limit) and i top up $2800 now?

The $2800 will be refunded to you in Jan 2021 and the interest earned on that amount will be returned to CPF.

 

[juelim]

Hi, just to check if OA transfer to SA is cap at FRS? So if I cash top up till FRS means I can't transfer from OA to SA anymore? In this case, why do cash top up to SA when OA transfer is good enough?

Sent from HUAWEI VOG-L29 using GAGT

Once you hit FRS for the SA, no more voluntary top up, either cash or from OA, will be allowed. Only the mandatory contributions and the interest earned will be retained in the SA, until 55.

 

[articland05]

Your MA will never go above the BHS, i.e. $60K for 2020. Once that ceiling is reached, the contribution to the MA will be diverted to the SA, and if that has reached the FRS, it will be diverted to the OA.

The refund is only for the cash top up to the MA, should your mandatory contribution to CPF (including the employer part) exceeds $37,740 for 2020.

thanks for clarifying.
this is my assumption as well...

Sent from LGE LG-H990 using GAGT

 

[chopra]

you cant transfer cash to sa
you cant transfer oa to sa
your MA contribution/interest will go to oa (if BHS met)
your regular monthly sa contribution will continue to go into sa
your interest earned for sa will continue to go into sa

Thanks for the summary.

 

[AvatarViper]

oh, i use 181k x 1.05(to the power of 10)

wow. if i use your formula and cal for 20 years, it will be around $480k in 2040. i don't think it is too realistic

 

[decibel.]

Hi, let's say throughout my contribution period I made total of 10.5K VC to MA and 14K cash top up to SA. I also made OA to SA transfer. Then assuming at 55 I have total balance of 800K OA, 700K SA, 60K MA. if ERS is at 520K at that time, how much can I withdraw?

Is it as such?

Balance
OA: 800K - 480K = 320K
SA: 700K - 40K = 660K
RA: 480K from OA + 40K from SA

Able to withdraw
1) 300K OA, 660K SA
Or
2) 300K OA, 660K - 14K SA??

Sent from HUAWEI VOG-L29 using GAGT

 

[henrylbh]

Hi, let's say throughout my contribution period I made total of 10.5K VC to MA and 14K cash top up to SA. I also made OA to SA transfer. Then assuming at 55 I have total balance of 800K OA, 700K SA, 60K MA. if ERS is at 520K at that time, how much can I withdraw?

Is it as such?

Balance
OA: 800K - 480K = 320K
SA: 700K - 40K = 660K
RA: 480K from OA + 40K from SA

Able to withdraw
1) 300K OA, 660K SA
Or
2) 300K OA, 660K - 14K SA??

Sent from HUAWEI VOG-L29 using GAGT

If no change in rules, ERS is 3x BRS and FRS is 2x BRS. If ERS is 520k as mentioned above, then FRS should be 346k (nearest thousand).

At 55, SA followed by OA will be transferred to RA to meet FRS and any balance can all be withdrawn except MA. If you want ERS, you need to ownself transfer from SA followed by OA to meet ERS.

In your case -

SA 700k - 346k (FRS in RA) = 354k withdrawable
OA 800k wholly withdrawable

If you opt for ERS, you have to transfer another 174k from SA to RA to meet ERS of 520k or pay by cash, if you do not wish to touch your withdrawable (anytime) SA balance.

 

[tangent314]

Is it as such?

Balance
OA: 800K - 480K = 320K
SA: 700K - 40K = 660K
RA: 480K from OA + 40K from SA

Able to withdraw
1) 300K OA, 660K SA
Or
2) 300K OA, 660K - 14K SA??

You can do this ONLY if you use the SA shielding trick.
If you do not use the SA shielding trick, then the 520k RA will be fully deducted from your SA. After that, any withdrawal will come out of your SA before your OA.