CPF Top up questions

[henrylbh]

A Retirement Account can also be topped up to the current Enhanced Retirement Sum.

Do you also think someone is “dumb” for applying SA top up rules to RAs?

You indirectly think it's not dumb to transfer SA to RA?

 

[nautilus]

So by now if there is no refund line entry in CPF account and no letter indicating refund is due means all MC and VC for 2019 are accepted?
Thanks

Refunds usually occur in February each year so be patient and wait till feb.

How CPF computes the refund is as follows:
MC : feb to Jan the next year (for contribution months Jan to December)
VC: Jan to dec
Refund = MC + VC - CPF annual limit

 

[Okenba]

Refunds usually occur in February each year so be patient and wait till feb.

How CPF computes the refund is as follows:
MC : feb to Jan the next year (for contribution months Jan to December)
VC: Jan to dec
Refund = MC + VC - CPF annual limit

Interestingly enough, I've already received letters about my refunds.
1 for my VC to MA last year, when it dropped after paying for medishield.
1 for VC to MA this year early Jan when I tried to top up to 60k.

Not sure why they refund the Jan one so early...

Maybe they don't allow me to VC anymore.

 

[maple96]

Refunds usually occur in February each year so be patient and wait till feb.

How CPF computes the refund is as follows:
MC : feb to Jan the next year (for contribution months Jan to December)
VC: Jan to dec
Refund = MC + VC - CPF annual limit

Looks like u are outdated on your info.

CPF is very efficient, refunds had already been credited to bank accounts since last week and reflected in the CPF transaction records online.

U can see total MC and total VC in the 2019 statement, just add these 2 totals and u will know if CPF annual limit had been exceeded to double confirm your status.

If u want to play games, play it smart and right to benefit!

 

[EarthlyTreasure]

When you turn 55 years old, MC will be lowered to 13% for both employer and employee. In this light, will the CPF annual limit still be $37,740 for the purpose of calculating room for tax relief such as doing $7k cash top up to own CPF.

2) For the $7k cash top up to CPF, can u choose which account to top up assuming RA is already at FRS.

 

[tangent314]

When you turn 55 years old, MC will be lowered to 13% for both employer and employee. In this light, will the CPF annual limit still be $37,740 for the purpose of calculating room for tax relief such as doing $7k cash top up to own CPF.

2) For the $7k cash top up to CPF, can u choose which account to top up assuming RA is already at FRS.

VC and RSTU are two separate schemes with their own limits. Contributing using one scheme does not affect the limits with the other scheme.

RSTU scheme explicitly states that below 55, the topup goes into SA and above 55 the topup goes into RA. If you are below 55 and already at FRS, your topup attempt will be refunded back to you. If you are above 55 and your RA Savings (RA account balance plus total amount withdrawn minus total interest earned) is above FRS but below ERS, then the amount topped up will go into your RA, but will not be tax deductible (as you are above the FRS).

Note that you are not limited to $7k top up using the RSTU. You can top up as much as you like up to the FRS/ERS limit, but only $7k per year is tax deductible if it fits within the FRS.

 

[maple96]

When you turn 55 years old, MC will be lowered to 13% for both employer and employee. In this light, will the CPF annual limit still be $37,740 for the purpose of calculating room for tax relief such as doing $7k cash top up to own CPF.

2) For the $7k cash top up to CPF, can u choose which account to top up assuming RA is already at FRS.

U seemed to be confused, so let me clarify your questions first.

1. CPF Annual Limit is always $37,740 for now, regardless of age of CPF member, working, self employed or retired.

2. You want to explore avenues to get tax relief for a working person above 55, for own CPF topup/contribution only ?

U still have 2 options to get tax relief for own CPF cash topup/contribution:

1. Own Cash topup to RA. What is the topup limit for tax relief and tax relief cap?

(below are extracted from IRAS website)

A. Topup limit = Current Full Retirement Sum (FRS) – Retirement Account (RA) savings *

*RA savings refers to the cash set aside in the RA (excluding amounts such as interest earned, any government grants received) plus amounts withdrawn.

(My comments : Just login to your CPF account to check how much (the amt) u can topup your RA to current FRS. No need to calculate yourself)

B. Tax relief cap for this topup = 7k for own topup.

2. VC-MA (voluntary contribution to Medisave Account)

Below from IRAS website:

Amount of Tax Relief VC-MA

The amount of tax relief given to the lowest of the following:

1. Voluntary cash contribution directed specifically to Medisave Account or
2. Annual CPF contribution cap for the year, less Mandatory Contribution (MC)* or
3. Prevailing Basic Healthcare Sum(BHS)^, less the balance in Medisave Account before the voluntary cash contribution.

(*MC refers to compulsory contribution by employee and his employer, and compulsory Medisave Account for self-employed individuals)

Still need more clarifications?

 

[nautilus]

Interestingly enough, I've already received letters about my refunds.
1 for my VC to MA last year, when it dropped after paying for medishield.
1 for VC to MA this year early Jan when I tried to top up to 60k.

Not sure why they refund the Jan one so early...

Maybe they don't allow me to VC anymore.

Yeah this is strange.

I was reviewing my CPF SOA for 2019 and my MC plus VC definitely exceeds the CPF annual limit. Till date I’ve not received any refund letter yet. Same goes for my spouse.

Perhaps they are processing by batches....

 

[a4973]

Yeah this is strange.

I was reviewing my CPF SOA for 2019 and my MC plus VC definitely exceeds the CPF annual limit. Till date I’ve not received any refund letter yet. Same goes for my spouse.

Perhaps they are processing by batches....

Same here until I realized that the amount of excess is the amount of the MC for Dec 2018 and contributed on Jan 2019. So I am thinking is it that the above-mentioned MC is not taken into account for 2019 Annual Limit?

 

[maple96]

Same here until I realized that the amount of excess is the amount of the MC for Dec 2018 and contributed on Jan 2019. So I am thinking is it that the above-mentioned MC is not taken into account for 2019 Annual Limit?

No refund is good news, to your benefit, why worry or be bothered

Either u are wrong or CPF is wrong (system fail), just keep quiet

 

[a4973]

No refund is good news, to your benefit, why worry or be bothered

Either u are wrong or CPF is wrong (system fail), just keep quiet

I agree that is why I never checked with CPF, just monitoring this thread and the account via app.

 

[dao]

VC and RSTU are two separate schemes with their own limits. Contributing using one scheme does not affect the limits with the other scheme.

RSTU scheme explicitly states that below 55, the topup goes into SA and above 55 the topup goes into RA. If you are below 55 and already at FRS, your topup attempt will be refunded back to you. If you are above 55 and your RA Savings (RA account balance plus total amount withdrawn minus total interest earned) is above FRS but below ERS, then the amount topped up will go into your RA, but will not be tax deductible (as you are above the FRS).

Note that you are not limited to $7k top up using the RSTU. You can top up as much as you like up to the FRS/ERS limit, but only $7k per year is tax deductible if it fits within the FRS.

Say, I am above 55, my RA is created with the FRS from my OA and SA. I further transfer from my OA to my RA to the max of ERS.

I cannot topup to my RA anymore since it is max at ERS now.

What about the SA? What is the cap for SA now? How much can I transfer from my OA to SA to enjoy the 4% interest? How much can I use cash to topup my SA? Is there a max in SA? Before 55, the max to topup SA is the FRS.

 

[tangent314]

Say, I am above 55, my RA is created with the FRS from my OA and SA. I further transfer from my OA to my RA to the max of ERS.

I cannot topup to my RA anymore since it is max at ERS now.

What about the SA? What is the cap for SA now? How much can I transfer from my OA to SA to enjoy the 4% interest? How much can I use cash to topup my SA? Is there a max in SA? Before 55, the max to topup SA is the FRS.

After age 55, you can only top up your RA using the RSTU scheme. This scheme will no longer allow you to top up into your SA. You may however be able to perform a VC, which will put money into OA + SA + MA at the prevailing proportion for your age group.

The preferred strategy for dealing with this is to do an SA shielding just before reaching age 55, then top up your RA with all your remaining OA, $40k from SA that you cannot shield, and cash, up to the ERS, before dropping the shield.

 

[dao]

After age 55, you can only top up your RA using the RSTU scheme. This scheme will no longer allow you to top up into your SA. You may however be able to perform a VC, which will put money into OA + SA + MA at the prevailing proportion for your age group.

The preferred strategy for dealing with this is to do an SA shielding just before reaching age 55, then top up your RA with all your remaining OA, $40k from SA that you cannot shield, and cash, up to the ERS, before dropping the shield.

Assuming done that SA shielding, that is I move all my SA, leaving $40K behind, to a temporary low risk investment. When RA is created, 231K from OA + 40K from SA is move to RA as ERS 271K.

At this moment, my RA is max at ERS 271K. I can no longer top up to my RA as it is max now.

My SA is zero at this moment. Have not move back my low risk investment. Can I somehow take advantage of the low or zero SA to top up using CPF or Cash?

Is VC is the only choice to top up my CPF (OA+SA+MA), using the prevailing proportion for your age group?

 

[maple96]

Say, I am above 55, my RA is created with the FRS from my OA and SA. I further transfer from my OA to my RA to the max of ERS.

I cannot topup to my RA anymore since it is max at ERS now.

What about the SA? What is the cap for SA now? How much can I transfer from my OA to SA to enjoy the 4% interest? How much can I use cash to topup my SA? Is there a max in SA? Before 55, the max to topup SA is the FRS.

At or After 55 after your RA is created, u cannot do OA transfers to SA anymore, u also cannot do cash topup to SA anymore.

If u are employed, your Mandatory contributions will continue to be allocated to SA. U can also do voluntary contributions (VC-3A): allocations to OA/SA/MA based on your age band, cap at CPF annual limit less MC

U can still topup your RA to current ERS limit, eg if u hit 55 in 2019 with ERS at 264k but ERS for 2020 is 271.5K, u can still topup your RA to 271.5k. In short, CPFB compares ERS to ERS to determine how much u can topup, the exact formula as below:

“You selected: 55 and above
If your recipient is 55 or above, the amount that he/she can receive is the current Enhanced Retirement Sum (ERS) less Retirement Account (RA) savings. RA savings refer to the cash set aside in the RA (excluding amounts such as interest earned, any government grants received) plus amounts withdrawn such as monthly payouts and payout eligibility age lump sum withdrawal.”

U can easily obtain the amt u can topup via CPF website, just login to your account.

 

[BBCWatcher]

....When RA is created, 231K from OA + 40K from SA is move to RA as ERS 271K.

To be clear (and for the benefit of others), on your 55th birthday the CPF Board creates your Retirement Account and then attempts to fund it up to the Full Retirement Sum, drawing first from your Special Account and then, if necessary, from your Ordinary Account until either the current FRS is reached or those two accounts are drained. The CPF Board does not automatically fund your RA to the Enhanced Retirement Sum (ERS). Once your RA is created you can then add funds to push it up to the current Enhanced Retirement Sum (ERS) if you wish. You can use cash for the RA top up, or (while the "SA shield" is still in place) you can transfer OA dollars into your RA, or some of both.

At this moment, my RA is max at ERS 271K. I can no longer top up to my RA as it is max now.

You can confirm this information by logging onto your CPF account. I believe the "My Messages" section should tell you whether you can top up your Retirement Account and by how much. You ought to check this way because your RA balance alone doesn't tell you whether you have a top up opportunity or not.

My SA is zero at this moment. Have not move back my low risk investment. Can I somehow take advantage of the low or zero SA to top up using CPF or Cash?

Sadly, no. Once you celebrate your 55th birthday you no longer have any mechanism to push additional funds in a directed fashion into your Special Account. A relatively small percentage of any "all three" account contributions will flow into your Special Account, but that's it.

Is VC is the only choice to top up my CPF (OA+SA+MA), using the prevailing proportion for your age group?

It's not quite the only choice. A small portion of your compulsory contributions from employment in Singapore also flows into your SA. Hypothetically you could take a second, third, or even fifth job -- that part is a choice -- and have compulsory contributions flowing from all your jobs into CPF, including a small portion from each compulsory contribution flow into your Special Account.

It'd be wonderful if the government allowed us to shove a bunch of cash into a 4% interest earning Special Account which is fully liquid from age 55+, but sadly the government isn't that generous.

 

[highsulphur]

Anyone topping up their children cpf?

Just did it for their MA

 

[Okenba]

Anyone topping up their children cpf?

Just did it for their MA

Have considered this, but decided to invest it for them instead. They have a longer timeframe so the guaranteed 4/5% is, in a way, less attractive.

 

[highsulphur]

Have considered this, but decided to invest it for them instead. They have a longer timeframe so the guaranteed 4/5% is, in a way, less attractive.

Different risk.

If I can live on my dividends when retired, then my portfolio will be their inheritance eventually

 

[crimsontactics]

Anyone topping up their children cpf?

Just did it for their MA

I would top up SA before MA.

MA harder to take out than SA.

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