Help with parents retirement amount

[andyhtc]

Here’s Why You Should Top Up Your Parents’ CPF Retirement Account Instead Of Giving Parents’ Allowance​

#1 Topping Up Your Parents’ CPF Retirement Account (RA) Will Increase Their CPF LIFE Payouts And Actually Give Them More​

#2 Topping Up Your Parents’ CPF Retirement Account (RA) Will Provide For Them For Life

#3 You Will Enjoy Tax Deductions For Topping Up Your Parents’ CPF Retirement Account (RA)​

https://dollarsandsense.sg/top-parents-cpf-retirement-account-instead-giving-parents-allowance/

 

[Value.Matrix]

I'm planning to top up my mum's CPF account instead of giving her a cash allowance every month. Which CPF account to top up is better: SA or RA?

The main purpose is to reduce my income tax as she is still working and does not need any payout from her CPF, and she is not happy with the miserable fixed deposit rates for the cash allowance I have been giving her.

You cannot top up to your mums SA. You can only do a RSTU to RA or VC3A (voluntary contribute to 3 accounts for a portion for it to RA).

For tax relief, only RSTU to RA up to $7,000 is allowed (and her RA is below FRS). Any amount above 7,000 / and above FRS will not have tax relief.

 

[andyhtc]

CPF interest rates to remain unchanged for third quarter of 2021​

https://www.straitstimes.com/singap...to-remain-unchanged-for-third-quarter-of-2021

You cannot top up to your mums SA. You can only do a RSTU to RA or VC3A (voluntary contribute to 3 accounts for a portion for it to RA).

For tax relief, only RSTU to RA up to $7,000 is allowed (and her RA is below FRS). Any amount above 7,000 / and above FRS will not have tax relief.

I also think RA top up is a better choice for her. Thanks.

 

[rrr2015]

My Dad is 58 yrs old this year. He will retire at age 65. I just realised that he has not planned for his retirement ! He has savings of $100,000 which he keeps as fixed deposit every year. CPF RA account has about $170,000. He has HDB housing loan of $97,000 left to pay ( he pays using CPF ).

At his age, I don't know if he can even get a retirement insurance plan. Lets say he needs $1000 a month for 20yrs after retirement, which amounts to $240,000. I think he will still fall short of the amount required. Is there anyway to use the savings to lessen the impact like maybe get endowment insurance plan or invest some money ?

https://www.cpf.gov.sg/eSvc/Web/Schemes/LifeEstimator/LifeEstimatortry use the CPF life estimator to calculate payout after 65
based on his RA balance 170K & standard plan, his CPF life payout is $1,250 monthly
so that should help his retirement needs

 

[wira]

CPF interest rates to remain unchanged for third quarter of 2021​

https://www.straitstimes.com/singap...to-remain-unchanged-for-third-quarter-of-2021

I also think RA top up is a better choice for her. Thanks.

this is provided your mum's RA account have not reached FRS

"To keep tax benefits focused on supporting basic retirement needs, there is no tax relief for any amount of cash top-up which exceeds the limit on cash top-up amount for computing tax relief (i.e. Current Full Retirement Sum (FRS) – Retirement Account (RA) savings)." - IRAS

 

[andyhtc]

this is provided your mum's RA account have not reached FRS

"To keep tax benefits focused on supporting basic retirement needs, there is no tax relief for any amount of cash top-up which exceeds the limit on cash top-up amount for computing tax relief (i.e. Current Full Retirement Sum (FRS) – Retirement Account (RA) savings)." - IRAS

The problem is the interest rates have been too low since 2020 for savers like her. She has since taken up the idea of shifting her fixed deposits @ 0.4-0.7% to CPF Life @ 4-5%.

I will help her move the first tranch of cash this week into her RA and follow by more over the next few months as her fixed deposits mature. By the end of 2022, there is a good chance she will hit ERS in her RA and get a monthly payout of $2k+.

I'm okay not to get the tax relief from next year as I'm very used to paying taxes to the government

 

[qhong61]

The problem is the interest rates have been too low since 2020 for savers like her. She has since taken up the idea of shifting her fixed deposits @ 0.4-0.7% to CPF Life @ 4-5%.

I will help her move the first tranch of cash this week into her RA and follow by more over the next few months as her fixed deposits mature. By the end of 2022, there is a good chance she will hit ERS in her RA and get a monthly payout of $2k+.

I'm okay not to get the tax relief from next year as I'm very used to paying taxes to the government

She may want liquidity. How old is she?

 

[andyhtc]

Liquidity is not a major concern to her and she still has plenty in her war chest. She is just upset that her fixed deposits are paying her less than 1% interest rate

 

[qhong61]

My Dad is 58 yrs old this year. He will retire at age 65. I just realised that he has not planned for his retirement ! He has savings of $100,000 which he keeps as fixed deposit every year. CPF RA account has about $170,000. He has HDB housing loan of $97,000 left to pay ( he pays using CPF ).

At his age, I don't know if he can even get a retirement insurance plan. Lets say he needs $1000 a month for 20yrs after retirement, which amounts to $240,000. I think he will still fall short of the amount required. Is there anyway to use the savings to lessen the impact like maybe get endowment insurance plan or invest some money ?

Ts, so what is ur decision?