SA overflow

[Pyroxene]

So when your MA is maxed out at the prevailing MA cap, any further contributions overflow to your SA.

When you hit the prevailing FRS figure in your SA, do any new contributions similarly overflow to your OA?

I am 1-2 yrs away from reaching that point and would like to know. I seem to recall that it is possible to have more money in your SA than the prevailing FRS figure, but I'm not sure how that is possible if the overflow mechanism exists. Or can you VC to your SA even when it is maxed out?

Thanks.

 

[RedsYWNA]

So when your MA is maxed out at the prevailing MA cap, any further contributions overflow to your SA.

When you hit the prevailing FRS figure in your SA, do any new contributions similarly overflow to your OA?

I am 1-2 yrs away from reaching that point and would like to know. I seem to recall that it is possible to have more money in your SA than the prevailing FRS figure, but I'm not sure how that is possible if the overflow mechanism exists. Or can you VC to your SA even when it is maxed out?

Thanks.

Only MA will overflow to OA. SA wont overflow, and the interest gained from SA will remain in SA too.

 

[hwmook]

So when your MA is maxed out at the prevailing MA cap, any further contributions overflow to your SA.

When you hit the prevailing FRS figure in your SA, do any new contributions similarly overflow to your OA?

I am 1-2 yrs away from reaching that point and would like to know. I seem to recall that it is possible to have more money in your SA than the prevailing FRS figure, but I'm not sure how that is possible if the overflow mechanism exists. Or can you VC to your SA even when it is maxed out?

Thanks.

Contributions to SA stay in SA, overflow from MA will flow to OA instead.

 

[Pyroxene]

Ah I see. So the FRS cap only affects SA insofar as the overflow portion from MA is concerned. Otherwise, the regular contributions that are meant for SA still go into SA.

Thanks!

 

[Pyroxene]

BTW, I suppose that you are still free to make VCs to your SA even if your SA is at or above the FRS figure, subject to the annual CPF contribution limit?

 

[BBCWatcher]

BTW, I suppose that you are still free to make VCs to your SA even if your SA is at or above the FRS figure, subject to the annual CPF contribution limit?

Yes, you can still make an "all three account" Voluntary Contribution as long as it fits within the CPF Annual Limit. Some portion (but not all) of your "all three account" VC will land in your SA.

 

[lzydata]

BTW, I suppose that you are still free to make VCs to your SA even if your SA is at or above the FRS figure, subject to the annual CPF contribution limit?

Yes, you can still make an "all three account" Voluntary Contribution as long as it fits within the CPF Annual Limit. Some portion (but not all) of your "all three account" VC will land in your SA.

I suppose Pyroxene is asking about VC to SA in order to get income tax relief - that's no longer doable if your SA reaches the FRS. The 3 account option is always doable but is not tax deductible.

The only way to do tax-deductible VC to SA is that window of about half a month in January when the FRS has increased and your employment contribution has yet to come in.

 

[hwmook]

I suppose Pyroxene is asking about VC to SA in order to get income tax relief - that's no longer doable if your SA reaches the FRS. The 3 account option is always doable but is not tax deductible.

The only way to do tax-deductible VC to SA is that window of about half a month in January when the FRS has increased and your employment contribution has yet to come in.

I don't think there is anything known as VC to SA. It's retirement sum top up. VC is to all 3 accounts.

SA interest is more than retirement sum increase so how to have window to top up? It doesn't make sense.

 

[zoneguard]

SA interest is more than retirement sum increase so how to have window to top up? It doesn't make sense.

That's right, 4% > 3%. Otherwise we will have to catch up with FRS at all ages. Rather than now, once you attain FRS at age X before 55 in SA, the interest earned ensure you will reach FRS at 55 in SA.

 

[doratch]

I suppose Pyroxene is asking about VC to SA in order to get income tax relief - that's no longer doable if your SA reaches the FRS. The 3 account option is always doable but is not tax deductible.

The only way to do tax-deductible VC to SA is that window of about half a month in January when the FRS has increased and your employment contribution has yet to come in.

Voluntary Contribution (VC) to 3 CPF accounts is not eligible for tax relief.

TS can do a cash topup to his MA on beginning of January 2022 instead to qualify for the tax relief if he does not hit the overall contribution of $37,740 by 31st Dec 2022.

The Basic Healthcare Sum will increase on 1st Jan 2022 again.

 

[BBCWatcher]

An "all three account" Voluntary Contribution is eligible for tax relief if you're self-employed.

 

[wira]

hmm ..does it mean once my SA reach FRS , there is no tax incentive for me to continue to top up to reach ERS ?

when is best time to top up to ERS then ?

 

[zoneguard]

hmm ..does it mean once my SA reach FRS , there is no tax incentive for me to continue to top up to reach ERS ?

https://www.iras.gov.sg/irashome/In...tions-for-Individuals/CPF-Cash-Top-up-Relief/Yes, no more tax relief.

From your 55th birthday onward when your RA is created, you have opportunities to top-up RA to ERS every year as it is raised. You can even top-up to the current ERS after you have begun LIFE payout if you wish.

 

[wira]

https://www.iras.gov.sg/irashome/In...tions-for-Individuals/CPF-Cash-Top-up-Relief/Yes, no more tax relief.

From your 55th birthday onward when your RA is created, you have opportunities to top-up RA to ERS every year as it is raised. You can even top-up to the current ERS after you have begun LIFE payout if you wish.

i see.
is there any benefit to top up to ERS just after you turn 55 and RA created or only top much much later after your start drawdown ?

 

[zoneguard]

is there any benefit to top up to ERS just after you turn 55 and RA created or only top much much later after your start drawdown ?

Yes, as early as possible: https://forums.hardwarezone.com.sg/threads/retirement-account-question.6584515/post-136190292

To maximize the dollar value in RA and thus the LIFE payout.

 

[fr33d0m]

i see.
is there any benefit to top up to ERS just after you turn 55 and RA created or only top much much later after your start drawdown ?

Do you value 4+% guaranteed interest rate at age of 55+?

If yes, top up to ERS immediately.

 

[henrylbh]

hmm ..does it mean once my SA reach FRS , there is no tax incentive for me to continue to top up to reach ERS ?

when is best time to top up to ERS then ?

There is no more tax incentive but there is still on-going financial incentive to do so.

 

[henrylbh]

An "all three account" Voluntary Contribution is eligible for tax relief if you're self-employed.

Not your pattern to omit restriction of VC eligible for tax relief

 

[henrylbh]

Do you value 4+% guaranteed interest rate at age of 55+?

If yes, top up to ERS immediately.

Not 4+% as the amount of top up to ERS is way way above first 60k. In topping up also must consider the increased life annuity premium for increased payout especially if top-up is from SA.

 

[henrylbh]

when is best time to top up to ERS then ?

You lose income tax relief if you have chargeable income.