CPF Top up questions

[kehyi4]

Compulsory contributions cannot exceed the CPF Annual Limit ...

Actually, contributions from employment can exceed CPF AL

My employer pays additional contribution into my MA, above and beyond my salary (as part of medical benefits)

in total, the amount contributed to my CPF (from both employer and employee) exceeds CPF AL and had done so for the past 5 yrs (except in 2016 when the CPF AL was raised to $37,740)

 

[henrylbh]

Actually, contributions from employment can exceed CPF AL

Yes contributions from employment can exceed CPF AL, but not many know and just as many do not know that there is CPF AL as it does not concern them.

 

[BBCWatcher]

Actually, contributions from employment can exceed CPF AL

I never argued otherwise.

My employer pays additional contribution into my MA, above and beyond my salary (as part of medical benefits)

Yes, and those are not compulsory or mandatory contributions. Voluntary contributions can sometimes exceed the CPF Annual Limit.

 

[henrylbh]

I never argued otherwise.


Yes, and those are not compulsory or mandatory contributions. Voluntary contributions can sometimes exceed the CPF Annual Limit.

If voluntary contributions can, why not mandatory contributions, exceed the CPF Annual Limit

 

[JuniorLion]

If voluntary contributions can, why not mandatory contributions, exceed the CPF Annual Limit

Those are CPF rules. Can call them to ask why/why not.

 

[henrylbh]

Those are CPF rules.

What are those rules you referring to?

Q What is the CPF Annual Limit?
A The CPF Annual Limit is the maximum amount of mandatory and voluntary contributions* to all three CPF Accounts that a CPF member can receive in a calendar year. The current CPF Annual limit is $37,740.

*What is the limit for voluntary contributions (VC)?
The maximum amount of Voluntary Contribution (VC) for a person is the difference between the CPF Annual Limit of $37,740 and the amount of mandatory contributions (MC) made for the calendar year. No further VC can be made if the MC and VC have already reached the current CPF Annual Limit of $37,740.

 

[JuniorLion]

Question: If voluntary contributions can, why not mandatory contributions, exceed the CPF Annual Limit

You may call to ask CPF directly on the question above which you have stated.

I doubt any of us here works for CPF to be able to answer.

 

[henrylbh]

If voluntary contributions can, why not mandatory contributions, exceed the CPF Annual Limit

Those are CPF rules. Can call them to ask why/why not.

I doubt any of us here works for CPF to be able to answer.

But you answered 'those are CPF rules'

Since you said those are rules, what is there to ask?

 

[BBCWatcher]

If voluntary contributions can, why not mandatory contributions, exceed the CPF Annual Limit

I only wrote that voluntary contributions sometimes can exceed the CPF Annual Limit.

Every. Word. Has. Meaning.

 

[henrylbh]

I only wrote that voluntary contributions sometimes can exceed the CPF Annual Limit.

Every. Word. Has. Meaning.

No VC cannot exceed. Where you get that info?

 

[BBCWatcher]

No VC cannot exceed. Where you get that info?

From CPF. Sometimes voluntary contributions can exceed the CPF Annual Limit. As notable examples:

1. Special Account and Retirement Account top-ups are not subject to the CPF Annual Limit.

2. Voluntary employer contributions to Medisave under the Additional Medisave Contribution Scheme are not subject to the CPF Annual Limit. (They're not subject to the Basic Healthcare Sum limit either.)

3. CPF Form MHC-TRF voluntary fund transfers into Medisave are not subject to the CPF Annual Limit.

4. Voluntary contributions to a nominated member's CPF accounts under the Enhanced Nomination Scheme, upon another member's death, are not subject to the CPF Annual Limit.

Henry, are you trying to be deliberately provocative? It's annoying.

 

[henrylbh]

From CPF. Sometimes voluntary contributions can exceed the CPF Annual Limit. As notable examples:

1. Special Account and Retirement Account top-ups are not subject to the CPF Annual Limit.

2. Voluntary employer contributions to Medisave under the Additional Medisave Contribution Scheme are not subject to the CPF Annual Limit. (They're not subject to the Basic Healthcare Sum limit either.)

3. CPF Form MHC-TRF voluntary fund transfers into Medisave are not subject to the CPF Annual Limit.

4. Voluntary contributions to a nominated member's CPF accounts under the Enhanced Nomination Scheme, upon another member's death, are not subject to the CPF Annual Limit.

Henry, are you trying to be deliberately provocative? It's annoying.

Why think that way?

 

[henrylbh]

Stick to
Every. Word. Has. Meaning.

 

[The_Davis]

I can confirm this.

I was at max BHS on 31 Dec 2016. Come 2017 (on 4 Jan 2017 to be precise), the total interest earned in MA was auto-transferred out, leaving only 2016 BHS in my MA

That means CPF applied 2016 BHS instead of 2017 BHS even after 2016 MA interest was credited

This is probably good news for those looking to top up MA for tax relief - you have the full increase of BHS (2.5k for 2018) to play with

(for me, alas, my mandatory contrib will most likely exceed CPF Annual Limit in 2018... on second thought, that's probably a good thing )

thanks. I will activate the transfer on 2 Jan for $2.5k.

 

[babyrobo]

thanks. I will activate the transfer on 2 Jan for $2.5k.

Any reason why not 1/Jan?

 

[henrylbh]

Any reason why not 1/Jan?

1 Jan is a non business day and there can't be any transaction.

Anyway, deposit during the month, whether early or late, earns no interest for the month. Only make sure your deposit got credited before the mandatory contribution from your employer.

 

[Opps-gal]

A little disturbing. Rather than increasing payout proportionally from the always rising frs.

It might reduce payout instead.

Think top up to Ma only is safer, and just aim brs.

So, is it better to aim only to the amount of brs? Does that mean need to pay back the cpf amount used for housing before aim for brs?

What happen to those without house to pledge and can only reach brs?

 

[JuniorLion]

What happen to those without house to pledge and can only reach brs?

Your question can be answered by checking the CPF FAQ.

https://www.areyouready.sg/YourInfo...the-Basic-Retirement-Sum-when-I-reach-55.aspx

See this:
"If you're turning 55 soon and have yet to meet your Basic Retirement Sum (BRS), you might be wondering if you need to top up the shortfall in cash.

No, you don't have to. While it's good to have the BRS in your Retirement Account (RA), you don't have to make up for any difference in cash. The amount that you have in your RA will form your retirement sum and provide you with monthly payouts from your payout eligibility age.

However, if you have any new CPF contributions, government top-ups or other refunds received after 55, part or all of these amounts will be transferred to your Retirement Account when you next withdraw your CPF."

 

[BBCWatcher]

So, is it better to aim only to the amount of brs?

If you’re aiming only for the Basic Retirement Sum (BRS), you’re simply aiming for a low(er) income from work and/or missing out on tax reliefs. You’re aiming to be basically poor.

If the question is, “Should you voluntarily top up your CPF Special Account?” And the Special Account of your spouse (especially when that spouse has a total global income of less than $4,000, and thus your contribution to his/her Special Account qualifies for tax relief)? In my view you should do that after topping up your Medisave Account, if you’re able to top up your Medisave Account (if you have room below the CPF Annual Limit). Medisave top-ups (with tax relief) are higher/earlier priorities, in my view. But yes, you should grab the tax relief, and then take that tax relief and save/invest it. The tax relief is well worth collecting. When a government is willing to give you free money, it’s often a good idea to accept it.

Yes, if you top up your Special Account then you (and your spouse) might be participating in CPF LIFE at a minimum somewhere above the Basic Retirement Sum. So what? Having a pair of attractive lifetime retirement income streams as foundational, assured income is not at all a problem. CPF LIFE is never lavish, so you’re never going to overindulge in it, beyond what’s reasonable in investment/savings optimization terms. Once your Special Account hits the FRS (or your Retirement Account hits the ERS), CPF doesn’t allow you to add any more voluntary funds.

If CPF LIFE were some sort of toxic sludge then you might try to avoid it, but that’s ridiculous. It’s really quite excellent stuff, and the tax relief makes it only better. And nobody is suggesting that CPF LIFE be your only investment/savings vehicle. It’s only foundational.

 

[JuniorLion]

If CPF LIFE were some sort of toxic sludge then you might try to avoid it, but that’s ridiculous. It’s really quite excellent stuff, and the tax relief makes it only better. And nobody is suggesting that CPF LIFE be your only investment/savings vehicle. It’s only foundational.

It is the cornerstone of all retirement planning.