CPF Top up questions

[zumaba]

not refunded back=$87k-$37k=$50k? or you thought it would be refunded after your extra $50K earned 2.5/4% by year end?

I have "voluntarily" contributed $87k to my personal CPF in 2017, which is way more than the "limit" of $37k.

Not many people is aware on how they can maximise their "deposit" into their CPF account, which is a shame as it give a far superior returns for most people. And for some it also offers more flexibility than say a FD.

 

[BBCWatcher]

If one vc to ma 2500 and sa 7000 but whole year employment compulsory contribute 30k, what will happen?

Your Special Account top-up of $7,000 does not count toward the CPF Annual Limit. As long as your Special Account has enough room below the Full Retirement Sum, that top-up will go through and stick. (You can top-up a Singaporean newborn’s Special Account all the way up to the FRS if you want, in one go. That’s allowed. How much tax relief you get is a separate question. $0 in the case of a Singaporean newborn, unless that newborn happens to have a very early modeling career and is earning income from work at that tender age.)

The CPF Annual Limit is $37,740. In your example, ytour compulsory contributions (yours and your employer’s) total to $30,000, plus you have another $2,500 in voluntary MA contributions. That total is $32,500, which is below the CPF Annual Limit. So your MA contribution will stick, too.

Hypothetically you can earn $50,000/month and not hit the CPF Annual Limit. If you earn $50,000/month from work, paid for 12 months, with $0 of additional income from work in Singapore (no annual bonus, no commissions, etc.) — just $600,000/year paid $50,000 x 12 — then you’ll still have 5/17ths of your CPF Annual Limit available. You need at least $30,000 of variable income from work — income beyond your regular, steady monthly salary — to hit the CPF Annual Limit. It’s actually quite challenging to hit the CPF Annual Limit every year, consistently, given how it’s calculated. Possible, certainly, but challenging.

 

[SKenny]

not refunded back=$87k-$37k=$50k? or you thought it would be refunded after your extra $50K earned 2.5/4% by year end?

I did a VC of $37k, followed a $50k top-up to my RA. This is allowed.

 

[SKenny]

yes. You can do that. but there wouldn't be any tax rebate

I am not working. Retired in my 40s. Hence I do not worry about tax relief.

 

[JuniorLion]

I did a VC of $37k, followed a $50k top-up to my RA. This is allowed.

RA is set up only at age 55. Or did you request an early setup of RA?

 

[iamveryguailan]

When is the best time to top up this year to max out the interest?

 

[hwmook]

RA is set up only at age 55. Or did you request an early setup of RA?

He is already more than 55 years old, did he mention he is not?

 

[henrylbh]

I have "voluntarily" contributed $87k to my personal CPF in 2017, which is way more than the "limit" of $37k.

Not many people is aware on how they can maximise their "deposit" into their CPF account, which is a shame as it give a far superior returns for most people. And for some it also offers more flexibility than say a FD.

Your contribution of 87k misleading as contributions (not top-ups) cannot exceed annual limit of 37,740.

I did a VC of $37k, followed a $50k top-up to my RA. This is allowed.

Now your contribution of 87k is clarified.

I am not working. Retired in my 40s. Hence I do not worry about tax relief.

RA is set up only at age 55. Or did you request an early setup of RA?

He mentioned he retired in his 40s. But now he must be post 55 which explain why he could top up RA.

 

[BBCWatcher]

When is the best time to top up this year to max out the interest?

Soon enough to make sure CPF credits your top-up before the end of January, so about 3 business days before the end of the month (4 to be safe). No earlier, because presumably your top-up money is earning a little bit of interest elsewhere. If you visit a CPF office and physically hand a paper check to a CPF agent before 10:00 a.m. on the last business day of January, that should beat the January crediting deadline. (Other top-up channels are slower.)

If you’re trying to beat another deadline, such as slotting a Medisave top-up in before a compulsory contribution is made, then make your top-up soon enough to beat that other deadline.

 

[BBCWatcher]

I am not working. Retired in my 40s. Hence I do not worry about tax relief.

Maybe, but it’s worth point out that it’s possible in Singapore to have a personal income tax liability even while you’re not working in Singapore. Income from rents and royalties, as examples, can make that happen.

 

[JuniorLion]

Maybe, but it’s worth point out that it’s possible in Singapore to have a personal income tax liability even while you’re not working in Singapore. Income from rents and royalties, as examples, can make that happen.

Or withdrawals from SRS accounts.

 

[BBCWatcher]

Or withdrawals from SRS accounts.

Yes, particularly foolish/badly structured SRS withdrawals.

 

[Ah Bai]

CPF contribution and interest flow above BHS and FRS

Hello

Can someone help me understand the flow of monthly contribution (from salary) and interest for amount above BHS and FRS?

So far my understanding is as follows

1) If BHS is achieved, the monthly contribution for MA will flow into SA, the interest from MA will also flow to SA

2) After (1) and if FRS is achieved, the monthly contribution for SA will remain in SA, the monthly contribution overflow of MA in (1) will now flow to OA, how about the interest in this case? both from the MA and SA, i presume the SA interest will stay in SA and the MA interest (remember BHS is achieved) will now go to OA?

Is my understanding correct?

 

[henrylbh]

I am not working. Retired in my 40s. Hence I do not worry about tax relief.

Clearly it means he has no taxable source of income to worry or bother for the time being, may be.

Maybe, but it’s worth point out that it’s possible in Singapore to have a personal income tax liability even while you’re not working in Singapore. Income from rents and royalties, as examples, can make that happen.

Or withdrawals from SRS accounts.

Yes, particularly foolish/badly structured SRS withdrawals.

I am trying to comprehend the foolish/badly structured SRS withdrawals. Can not the SRS participant be making huge gain from his SRS investments and tax becomes unavoidable.

 

[BBCWatcher]

1) If BHS is achieved, the monthly contribution for MA will flow into SA, the interest from MA will also flow to SA

That's correct.

I don't know the answer to your second question.

I am trying to comprehend the foolish/badly structured SRS withdrawals. Can not the SRS participant be making huge gain from his SRS investments and tax becomes unavoidable.

Just assign some meaning and give some weight to the word "particularly" that I wrote. "Particularly" does not mean "exclusively."

 

[JuniorLion]

Hello

Can someone help me understand the flow of monthly contribution (from salary) and interest for amount above BHS and FRS?

So far my understanding is as follows

1) If BHS is achieved, the monthly contribution for MA will flow into SA, the interest from MA will also flow to SA

2) After (1) and if FRS is achieved, the monthly contribution for SA will remain in SA, the monthly contribution overflow of MA in (1) will now flow to OA, how about the interest in this case? both from the MA and SA, i presume the SA interest will stay in SA and the MA interest (remember BHS is achieved) will now go to OA?

Is my understanding correct?

For (2),
- The monthly contribution (from employment) to SA will remain in SA
- The monthly contribution (from employment) to MA will overflow to SA
- The SA interest will remain in SA
- The MA interest will flow to MA

There is theoretical no limit to how much you can have in SA. There is only a limit to how much you can voluntarily top up (for ages below 55 -- FRS, for ages 55 and above -- ERS).

 

[kehyi4]

For (2),
- The monthly contribution (from employment) to SA will remain in SA
- The monthly contribution (from employment) to MA will overflow to SA
- The SA interest will remain in SA
- The MA interest will flow to MA

There is theoretical no limit to how much you can have in SA. There is only a limit to how much you can voluntarily top up (for ages below 55 -- FRS, for ages 55 and above -- ERS).

Eh, he already said FRS in SA achieved liao. Your points about MA overflow to SA is wrong...

In any case, to answer Ah Bai's question:
Interest in SA will stay in SA
Interest in MA will overflow to OA, assuming MA has reached BHS

 

[babyrobo]

Eh, he already said FRS in SA achieved liao. Your points about MA overflow to SA is wrong...

In any case, to answer Ah Bai's question:
Interest in SA will stay in SA
Interest in MA will overflow to OA, assuming MA has reached BHS

So After MA has reached BHS and FRS is achieved, the monthly contribution for SA will remain in SA?

How abt the monthly contribution overflow of MA (MA has reached BHS)? will now continue to flow to SA or OA?

 

[kehyi4]

So After MA has reached BHS and FRS is achieved, the monthly contribution for SA will remain in SA?

How abt the monthly contribution overflow of MA (MA has reached BHS)? will now continue to flow to SA or OA?

MA overflows to SA until SA hits FRS, thereafter it overflows to OA

SA has no ceiling, so it will continue to grow beyond FRS. But after SA hits FRS, no more top-up into SA is allowed

 

[playlove]

Hi, if I TOP up my SA on the last working day of last year, will the tax relief be reflected on my 2017 assessment or 2018?

I checked my cpf comtribution it stated that the amt was paid on 2 Jan 2018 for the month of dec.