Should You Top Up CPF SA Or MA First?
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- เผยแพร่เมื่อ 18 พ.ค. 2024
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0:00 - Intro
0:51 - Similarities between topping up CPF SA and MA
1:29 - Why top up your CPF SA first
3:36 - Downsides of topping up your CPF SA first
6:33 - Why top up your CPF MA first?
9:55 - Downsides of topping up your CPF MA first
10:19 - My thoughts
None of this is meant to be construed as investment advice. It's for entertainment purposes only. Links above include affiliate commission or referrals. I'm part of an affiliate network and I receive compensation from partnering websites.
- MA 1st in early Jan to reach BHS (esp if near it) + top up when there's deductions so that the monthly contributions (by employer) will flow to SA - i.e. supercharge both MA and SA. While getting tax savings too.
- Not too concerned with the SA being 'reserved' for retirement in a sense as one can chooses to still reserve SA amounts (b4 shield) to combine w OA to meet FRS/ERS? It should be whatever SA we top up using cash + 40,000? What you presented honestly is very good info - thanks for the good work, have been following some of ur videos.
- Not too sure if it's good to top up SA using cash/OA to SA a dilemma - was hoping Kelvin, Josh Tan or Chris would have this video, hahaha:
- i.e. if your SA balance is e.g. at least halfway mark to FRS assuming average income (and the person has >10 years to 55y/o) - comparing the opportunity cost of topping up in early years when salary is lower (compounding benefit+higher SA in later years but lower tax rate) vs when your salary increases (loss of opportunity to maximize tax savings in years w higher income/saving on higher tax rate, less compounding).
thank you for your video!! can you share more about CPF Shielding please! :D
Might also take into consideration on MA deductions for insurance, which increases the time taken for us to achieve bhs. Could you do a video if we should take up additions to careshield plan as we reached 30 or wait til we hit bhs. Thanks!!
Interestingly I have been topping up my SA… I will considering topping up my MA instead and meet the max. Once my MA met the max, I could super charge my SA liao… Ho Say Liao! Huat! Thanks Kelvin for your great tips! 👍
Wow I never knew!! Thanks Kelvin for sharing!
Thanks for the insights! Would love to learn the same topic but for the above 55 and below 60 group. Not many videos available :)
Once u top up to max on SA, u don’t need to chase full retirement sum anymore, interest plus monthly contribution will be more than enough for every year increase sum amounts.
Purely from tax savings pov
If you have alr maxed your CPF SA cash contribution amount,
You can consider topping up your CPF MA every year before your Jan pay cheque as the MA ceiling goes up every year.
Many good points! Especially “sugar baby doesn’t count as your loved one” kelvin 👍🏻
I can’t understand the RSTU reserved part. Won’t it be part of the FRS?
Do I need to top up MA since I already paying a yearly premium with rider for hospitalisation?
Hi Kelvin can you do a review & introduction about Digital Bank (GXS & Trust Bank) ☺️🙏🏻
For those money that we have transferred from OA to SA via RSTU...does it mean these money and their associated earned interest cannot be shielded too and cannot be withdraw at 55 as they will be immediately transferred to RA?
First 40k in SA can’t be shielded. Am I right to think that it’s ok to top up SA as long as it’s not above 40k?
Hi Kelvin, I'd want to hear more insights, particularly on withdrawing at age 55 the sum on top of BRS or FRS. If I max out MA first, the overflow into SA can be withdrawn at 55 if above FRS. Not so for top up in SA directly I believe.
If SA already reaches FRS, then it will flow to OA? Hence, no incentive to top up MA？can MA top up be part of tax relief?
Hi, why I couldn’t see “View amount reserved in your accounts” under my account balance page ?
Hi kelvin.. Thx for the interesting insight on the topic as always.. Was wondering whether u can share some light on accrued interest on cpf.. Is there any other way to reduce the accrued interest beside cash?
Hi Kevin
In the CPF website it says if you hit both FRS and BHS. The contribution that is allocated to MA goes to OA while SA will still top up as 6%. Meaning OA is 21+8 % SA still 6%
Ops there’s a typo there. Thanks for letting me know
Nice CPF content again! MA first is my choice as well
Totally agree with you on your video you've shared 11 months ago ! 😀
Topping up to MA is a mistake as it is based on reimbursement and you cannot withdraw in one lump sum
Can only use cash to top up MA, cannot top up via transfer.
Hi Kelvin, When do SA shielding, you still need to leave $40,000 in SA. Is the reserved amount part of the 40,000?
Ideally you rstu to 40k only so that will match the 40k reserve with the required balance before shielding
@@VamboraSingapore Does this reserve include its compounding 4% interest? It is stated in the CPF website popup he showed that "...This comprises the top-ups that you have received and *any interest earned*...." If so, rstu to 40k will be too much?
Could you explain the part in 10:18? If MA and SA both get 4% interest, why would topping up SA mean more money for retirement? In the even we reach both BHS and FRS, it wouldn't make a difference right?
Oh its assuming both not maxed out. If i can only topup $100k, SA will have more money to withdraw, while MA cant withdraw
Thanks, spoke to a FA friend and he made the same point
Suddenly EV terms also came in... Must be invested heavily in EV stocks.
Hi Kelvin, if one's CPF MA is maxed out, can one still top up the 8k to the MA and achieve the supercharge effect on a yearly basis?
If maxed out, u cant top up. But sometimes when there’s medical deduction from ma, it will fall below bhs. U can then quickly top up
@@KelvinLearnsInvesting Cool. Thank you!
@@KelvinLearnsInvestingI thought the idea is that if BHS is at max, topping up to MA will let it overflow to SA (if below FRS)... and then it allows you to practice shielding as it is not part of RSTU.
Or is my understanding wrong?
I thought can use SA for T-bills for shielding?
Can. But reserved amount, the amount u top up to cpf sa cant be used for spending
Do we transfer from OA to SA? Or just using cash?
All individuals different bah…if u have more CPF oa to spare u use oa etc…I use cash for the purpose of locking it away…😅…but now fixed deposits might hit 5% soon 😱
Both my SA & MA had hit FRS & BHS, does my top up still have tax relief? Thanks
If it hit already, they wont let u top up to sa or ma
Hmmm, if i transfer $ from OA to SA, will the amount i transferred over to SA be in the reserved?
OA to SA will not be reserved
If SA hasn't yet reach FRS, and SA n OA combined is just a few k short of FRS no difference to top up either to meet FRS at 55 right?
gov not fair interest so low in cpf!
What about money transferred from OA to SA? Will those be reserved as well?
Not reserved
Can we still do VCMA to supercharge SA if BHS is already reached? And if possible, is that top up eligible for tax relief?
SEND ME A DIRECT TEXT.
Payout Age over the years:
1987 : Start from 60
1999 : Raised to 62
2012 : Raised to 64
2015 : Raised to 64
2018 : Raised to 65
Hypothetically speaking, lets say CPF Life raise the payout age to start from 70 within the next 1-2 decades and i'm confident that i wont be living that long or maybe due to illness. Do you think BRS makes sense and withdraw the rest @ 55?
I'm pretty close to achieving FRS but not confident living above 70 with pandemic and all.
Would be nice if you can dedicate a video just for BRS based on above scenario.
Thanks.
Yes and no Kevin, how much can a working person yearly topping up their MA and SA first in January yearly to meet the ceiling? Eg. Last year MA cap is $66k and this year is $68.5k, then they can enjoy a 4% interest at MA flow to SA. Yet, SA this year cap is $198.8k from last year $192k. You need to top up additional $6.8k. So in total you need to set aside $8.5k-9.5k to gain both at 4% interest then go into OA. No working person can do that unless they don’t enjoy life or have a family.
After reaching max cap at both ma and sa, where does the interest payout go to ? To OA?
@@speedygaming1919 I think it will be in SA. But can you chase yearly to match each year ceiling / cap? Topping up $8.5k - $9.5k yearly?
I believe the top up idea is to relieve the personal income tax. But if you need the cash so badly then dont top up. I do agree with you that enjoy life is crucial as well, u can see the recent news where the local actor Timothy died at 49 .
Going from this yr cap to the next, if you exclude the mandatory top ups (higher sa allocation for older folks) from working then yr scenario would fit. Otherwise the max to rtsu is arnd 1~2K. MA would require abit more cash mainly due to annual interest offsetting the premiums but definitely not the entire 2.5K coz of your higher mandatory topups at older ages
The key mindset for CPF is set aside some money for your own retirement. Don’t use all them up and regret later. If you don’t have the money, just keep the mindset, no need to stick with the 8k cap
Can transfer from SA to MA to meet BHS?
Cannot
Kevin,
If a person MA has reached $68,500 this year, can he top up beyond $68,500 to enjoy the $8K Tax relief?
Can only top up to SA then
What you can do is monitor insurance deduction. Everytime there is a deduction, you can top up immediately (up to 8k) for tax relief.
Top up MA.. Health more important.. No health no life..
Cpf ma first.
JUICE the government.hahahahahahha........
@Kelvin Learns Investing , from the point of view of a person who wants more "disposable cash" at his fingers for all purposes and NOT JUST medical/insurance, i think the analytical value of this statement "$A RSTU is worse off than $A VCMA, because "cannot do SA shielding" is ONLY limited to the extent that there is an expectation at 55 yrs of age, that a person's own (OA balance + Reserved SA amount) grossly exceeds the FRS at that point in time. Otherwise, I feel its the opposite situation.
Example of a person who will benefit more from RSTU given what I described (i.e : (OA balance + Reserved SA amount) < or = FRS )
Assumed at age 55, with FRS at $200K, and BRS at $100K:
- Reserved SA portion amount : $ 100K (summation of all RSTU performed)
- Non-reserved SA portion amount $50K (from mandatory contributions)
- OA balance: $ 50K (from mandatory contributions)
Here, since (OA balance + Reserved SA amount) = $150K, and falls below the $200K FRS threshold, the same person can take the following steps at age 54 or earlier :
Steps:
1) self transfer full $50K OA balance to SA, allowing SA to reach a gross balance of $200K
2) shield $100K out of the new $200K SA balance into some risk-free government bond
3) End up with $100K going into RA, meeting the BRS; and allowing the excess $100K to flow back into SA, and earn 4% p.a and remains withdrawable at any point in time, at any sum desired.
Contrast and compare the other outcome if this guy instead of reserving $100K in SA via RSTU, actually did a VCMA instead. The outcome at 55 yrs is :
a) He still have to use $50K from OA and $50K from SA to form the BRS, like the scenario above.
b) There is nothing left to shield, since the $100K that the first scenario used for shielding is sitting pretty in MA.
OUTCOME ---> He cannot touch the $100K until he or his loved ones need medical help or insurance payments.
Please correct any unsound observations of mine above.
Super clear explanation, much better than honeymoneysg 😂