Cory Diary : The Interesting and the Exception - CPF Read

For the past couple of days I have been reading up on how to optimize my CPF. With multiple queries to CPF. Their service is top mark so if you have any question, they are the key folks to go to. Do note following is what i understand and could be wrong so please DYODD.

My notes.

1. CPF Transfer to loved ones

There is no Tax Incentives. Both Givers and Receivers need to meet certain condition for this to happen. From OA to either SA or RA depending on receivers age. The Givers also need to have certain amount of CPF before this is allowed.  One thing that caught my surprise is that they have a rule where if your love ones passed away, the unused portion of the CPF given by you will be returned back to your CPF. I thought this is interesting. (link)

2. Income Threshold for Spouse/Siblings

What is interesting is that "To claim tax relief for cash top-ups for your spouse or siblings, the spouse or siblings must not have an annual income exceeding $4,000 in the year preceding the year of top-up."

"Annual income includes taxable income (e.g. trade, employment and rental), tax exempt income (e.g. bank interest, dividends and pension) and foreign-sourced income regardless of whether it has been remitted to Singapore. This income threshold does not apply to parents, grandparents, handicapped* spouse or handicapped* siblings.

*Incapacitated because of physical or mental infirmity."

3. Tax Benefits can go up to 14K

"Cash top-ups can be made to any recipient. You can enjoy tax relief of up to $7,000 per calendar year if you are topping up for yourself and additional tax relief of up to $7,000 per calendar year if you are topping up for your parents, parents-in-law, grandparents, grandparents-in-law, spouse and siblings."

4. MediSave BHS (The Basic Healthcare Sum )

For CPF members aged below 65 in 2020 . The prevailing BHS is $60,000, and will be adjusted yearly. At current times, the interest rate at 4% will not be able to cover the annual increase even at max $60, 000 amount in MediSave. So if you are banking on overflow to other accounts by itself may need to take note that your cash flow will not happen currently.

5. OA and SA as Saving Accounts

There is limit on the amount allowed in SA account. Currently $181k. Basically cleared off when moves to RA. There is multiple articles on SA shielding such that the FRS is  fulfilled using OA monies so something you need to search about. For now before age 55, the interests from OA and SA are quite attractive than putting them in banks assuming you will meet the FRS amount regardless.

So why as form of Saving ? Because we are allowed to withdraw the monies as long FRS is met as we needed.

6. Basic Plan ( correction 14th Nov 20 )

If we intend to leave a sizeable amount of monies in our RA to our loved ones after we passed away, Basic plan (updated) will provide quite an amount left depending on when we get called, for an acceptable cut in our monthly withdrawal from 65. Check my earlier article on this. ( link )

7. Nomination

Can be done online. As I understand every time you get married, the earlier nomination gets invalidated. That's how I interpret ! What if I remarried ? hmm hmmm ... so better to do nomination again ?

Additional note. If marriage is not registered in Singapore ROM or ROMM, need to notify CPF. ( link ).

8. CPF Housing Refund

Can be done online. There is a limit of 5K each day using PayNow. Check my earlier article.

9. Discounted Singtel (ST) shares

Don't have to sell our shares.

"You may only apply to transfer your discounted Singtel (ST) shares to your own Central Depository account after you have reached 55 years old and have set aside the Full Retirement Sum (FRS) in the Retirement Account. The FRS can be set aside fully with cash, or with cash (i.e. at least the Basic Retirement Sum) and property"

10. Silver Support Scheme

Often we hear about old people clearing table but not much is mentioned how much help was given from Silver Support Scheme. I thought this is interesting and that our gov is not as heartless as we think it is. Singaporean only. ( Link ) . What is good about this scheme is you do not need to apply ! 

I think there will be more interesting find in CPF website. Strongly suggest people visit them.

Cory

2020-1114