Retirement fund

[culture_counter]

someone told me if you met your 1/2 frs and pledged your property, any excess money in your OA and RA can be withdrawn

but not sure whether its too risky to put excess money into cpf for the higher interest because they can change the rules/limits anytime

Can anyone confirm that, if you meet BRS and pledge your property, therefore any excess money in SA and OA can be withdrawn, like a bank deposit?

 

[grenoble]

can i ask about the BHS?

in order for BHS to be full and to be able to flow over to OA, i have to cash top up every Jan to keep it max as the yearly increases exceeds the interest earned on the prevailing BHS limit. So its basically yearly cash top ups, unlike the SA where once it is full, the yearly increases can be covered by the interest earned by the SA, no cash top ups required.(based on current rulings)

For me the benefit of having a max ma is so that

1. MA full and monthly contributions can overflow to OA and i can restock my OA faster

\2. even though i can pump cash into OA directly (subject to limit), but MA earns 4 % over 2.5 %

However i have my own term and hospitalization plans in place, hence i intend to have my MA for my parents usage.

But the cons are MA usage seems pretty restricted, and i have to keep pumping cash every Jan over the years? does seems too attractive to me to have a max MA even though there are tax savings.
(below 55 yo)

Im not too keen on pumping in any cash and only prefer to play around with watever is stuck there. I dont want to be too heavy and reliant on cpf.

can advise if my understanding is correct ?

 

[kehyi4]

Voluntary Contribution to MA (VC-MA) is subject to CPF Annual Limit - if you exceed CPF AL, your VC-MA will be returned to you without interest the following year

Why do you feel you have to keep pumping cash into MA? If you are working, your normal CPF contrib will take care of any rise in BHS naturally, I think

Sent from null using GAGT

 

[SBC]

can i ask about the BHS?

in order for BHS to be full and to be able to flow over to OA, i have to cash top up every Jan to keep it max as the yearly increases exceeds the interest earned on the prevailing BHS limit. So its basically yearly cash top ups, unlike the SA where once it is full, the yearly increases can be covered by the interest earned by the SA, no cash top ups required.(based on current rulings)

For me the benefit of having a max ma is so that

1. MA full and monthly contributions can overflow to OA and i can restock my OA faster

\2. even though i can pump cash into OA directly (subject to limit), but MA earns 4 % over 2.5 %

However i have my own term and hospitalization plans in place, hence i intend to have my MA for my parents usage.

But the cons are MA usage seems pretty restricted, and i have to keep pumping cash every Jan over the years? does seems too attractive to me to have a max MA even though there are tax savings.
(below 55 yo)

Im not too keen on pumping in any cash and only prefer to play around with watever is stuck there. I dont want to be too heavy and reliant on cpf.

can advise if my understanding is correct ?

You probably had missed out a crucial point of tax deductible incentive when doing it. That matters more for someone who had FRS in SA.

 

[grenoble]

Voluntary Contribution to MA (VC-MA) is subject to CPF Annual Limit - if you exceed CPF AL, your VC-MA will be returned to you without interest the following year

Why do you feel you have to keep pumping cash into MA? If you are working, your normal CPF contrib will take care of any rise in BHS naturally, I think

Sent from null using GAGT

Because i had made transfers from Oa to Sa recently to FRS and wanted to rebuild my
OA faster from the monthly contributions.

hence if my MA is maxed, the monthly contributions and year end interest will overflow into OA.

 

[grenoble]

You probably had missed out a crucial point of tax deductible incentive when doing it. That matters more for someone who had FRS in SA.

For me i dont see too much of benefits for the tax deduction part though, (my taxes not very high) but having to lock in extra cash in the MA, of which the usage is very very restricted , is what holds me back

Say for example, if the tax savings i made from VC in MA (x amount + 7k to be compounded 4%p.a) and me having 7K a year to invest elsewhere at my total discretion. The difference may be small if even out over the years, but i got so much more flexibility and not subject to MA restrictions ( which at this point of time seems more and more like the gov MIGHT restrict here and there and not let you use so much (balance use your own cash) and always maintain a sum in MA)

 

[grenoble]

Voluntary Contribution to MA (VC-MA) is subject to CPF Annual Limit - if you exceed CPF AL, your VC-MA will be returned to you without interest the following year

Why do you feel you have to keep pumping cash into MA? If you are working, your normal CPF contrib will take care of any rise in BHS naturally, I think

Sent from null using GAGT

regarding the second part, it doesnt seem enough.

Yearly increases used to be 5k, but next yr is 5.2k , future even wider

57.2*0.04 = 2.28 - insurance deductions < 5.2k
( even on max cpf contribtuions)

 

[JuniorLion]

regarding the second part, it doesnt seem enough.

Yearly increases used to be 5k, but next yr is 5.2k , future even wider

57.2*0.04 = 2.28 - insurance deductions < 5.2k
( even on max cpf contribtuions)

How is next year increase in BHS 5.2k?

It's 57.2k - 54.5k = 2.7k

 

[Dividends Warrior]

can i ask about the BHS?

in order for BHS to be full and to be able to flow over to OA, i have to cash top up every Jan to keep it max as the yearly increases exceeds the interest earned on the prevailing BHS limit. So its basically yearly cash top ups, unlike the SA where once it is full, the yearly increases can be covered by the interest earned by the SA, no cash top ups required.(based on current rulings)

For me the benefit of having a max ma is so that

1. MA full and monthly contributions can overflow to OA and i can restock my OA faster

2. even though i can pump cash into OA directly (subject to limit), but MA earns 4 % over 2.5 %

I think should be overflow to SA

 

[grenoble]

How is next year increase in BHS 5.2k?

It's 57.2k - 54.5k = 2.7k

oh no, my understanding is all wrong.

it will be self sufficient once max as there will be monthly contributions as well

my bad!

 

[grenoble]

I think should be overflow to SA

it will go into OA if your ma is above frs

right ?

 

[henrylbh]

Thinking of topping up for them to use instead of giving cash. They are retired and above 70, still can get 4%?

Can they withdraw from RA or SA with the deposit? They are under old scheme that full sum can be withdrawn, so cpf is zero now from my understanding.

No SA topping up allowed as they are above 55.

You should, more than you can, consider topping up their RA instead of giving cash allowance. The monthly payout from RA would depend on how much is in their RA and what is their cohorts payout then. You can request higher payout, if the balance in RA can last till 82 or 85.

If the monthly payout is below the monthly cash allowance that you are giving, you just need to give them cash to make up for the difference. In doing so, you may claim tax relief up to 7k only.

Whatever amount in their RA will earn 6% on the first 30k, 5% on the next 30k and excess at 4%.

Whatever left in their RA due to your top-ups will go to their nominees or estates.

You can also consider topping up their RA by transferring your OA (earning 2.5%) to their RA (earning more than 4%), if you meet the prevailing FRS.

There is no tax relief for such transfer. But whatever left in their RA due to the transfer will return to your OA upon their demise.

The cash top-up or transfer from CPF is limited to the prevailing ERS less what they had in RA when they were 55 and less previous top-ups.

If you are feeling cash rich and if you are the sole nominee, just continue to give them cash allowance, top up their RA with cash and transfer and do not request for monthly payout to commence. Let the cash and top-ups be your savings at no less than 4% and wait for 'maturity'

 

[henrylbh]

it will go into OA if your ma is above frs

right ?

Right. MA will overflow to OA, if SA is above FRS.

 

[henrylbh]

Annual contribution limit is 37,740. Left 30 days to meet 2018 deadline.

1) You can transfer till the current FRS limit.

2) Interest on CPF accounts are calculated monthly, based on the lowest amount in that month. TL;DR => It won't matter when you transfer; you will always lose out on 1 month of interest.

Thanks, will do 1 transfer to her CPF SA in Dec18 and one more in Jan19.

Not sure is there any limit to transfer her SA? Is better to do it on 01Jan2019? or end Dec2018? If I do it in Dec2018, will it affect my OA interest for the year 2018?

You should transfer (OA to SA) as much in one go to the prevailing FRS limit, if there is enough in your OA.

Whether you transfer in Dec or Jan, you are certain to lose the month's interest and more if the deduction in one month is credited in the next month. So better transfer well before end of the month.

 

[Tiger9119]

You should transfer (OA to SA) as much in one go to the prevailing FRS limit, if there is enough in your OA.

Whether you transfer in Dec or Jan, you are certain to lose the month's interest and more if the deduction in one month is credited in the next month. So better transfer well before end of the month.

I transferred 50K from my CPF account to her SA last night. I want to make sure all the 50K is from my OA not partially from my SA before I transfer more as it is still early Dec. I should know the result in 2 or 3 days time.

 

[henrylbh]

I transferred 50K from my CPF account to her SA last night. I want to make sure all the 50K is from my OA not partially from my SA before I transfer more as it is still early Dec. I should know the result in 2 or 3 days time.

I thought the topping up form is clear enough -

Amount available for top-up from my OA - S$xxxx (default)
Amount to be transferred from my OA - S$xxxxx (you fill in the amount)

Last time I went to the branch, the counter officer wanted to transfer my SA and I stopped the process. I wrote to the Head Officer and the counter officer had to call me back to say I can use OA to transfer.

 

[Tiger9119]

I thought the topping up form is clear enough -

Amount available for top-up from my OA - S$xxxx (default)
Amount to be transferred from my OA - S$xxxxx (you fill in the amount)

Last time I went to the branch, the counter officer wanted to transfer my SA and I stopped the process. I wrote to the Head Officer and the counter officer had to call me back to say I can use OA to transfer.

I did not see any option to choose from OA or SA. I did the transfer thru CPF website(online).

 

[henrylbh]

I did not see any option to choose from OA or SA. I did the transfer thru CPF website(online).

Keep your fingers crossed.

I did online top up and had that options telling me how much is available for top-ups exactly as I written above. May be different options for recipient below 55?

 

[Tiger9119]

Keep your fingers crossed.

I did online top up and had that options telling me how much is available for top-ups exactly as I written above. May be different options for recipient below 55?

Yes, it did show the amount that is available for top up but don't understand why it show the amount which is more than my combined total in MA/SA/OA accounts.

If CPF deduct from my SA, I call them just like the last time you advised me to call.

 

[Nofear40]

I understand the question. There’s certainly no forfeiture, and there’s no refund triggered either, assuming you don’t somehow oddly beat interest crediting.

However, the situation you describe is rare. SA interest is running ahead of the rate of FRS increase, so at best you might get once such early January top-up opportunity once in your life.

One more question - will I get tax relief on this top up?