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17-07-2014, 11:45 PM
(This post was last modified: 17-07-2014, 11:57 PM by cyclone.)
Hi,
I'm hitting 30 soon and I've been starting to look into saving for retirement and reducing my taxable income. There are currently two options, the first is to use cash to top up my CPF SA and the second is to use cash to top up my CPF SRS.
Based on what I've found out, it seems that it makes more sense to top up my CPF SA over my CPF SRS because it gives me a guaranteed 4%. In addition, both reduces my tax by the same amount.
Am I getting my facts correct? What is your advice? Thanks!
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18-07-2014, 08:33 AM
(This post was last modified: 18-07-2014, 08:34 AM by egghead.)
I suggest you spend more time to understand both schemes to learn about the details. These two schemes while related to retirement, have different workings and limitations. There is a wealth of discussions in VB forum before about SRS.
As for me, I did both.
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One good way to know more, is to tap on the collective wisdom of buddies here.
For the SRS topic, there are two relevant threads in VB, among other posts hidden in some personal finance threads.
Enjoy
Why SRS accounts are a good way to save
http://www.valuebuddies.com/thread-447-page-8.html
Who's contributing to their SRS account this year?
http://www.valuebuddies.com/thread-2544-page-3.html
“夏则资皮，冬则资纱，旱则资船，水则资车” - 范蠡
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thank you for your replies. I will spend some time reading through these threads.
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The CPF MA ceiling was increased from $45,500 to $48,500 with effect from 1-Jul-2014. I top up my MA by $3,000 cash which is tax deductible as well. If your tax bracket is 20%, the saving is $600.
Anyone did this? I hope my understanding is correct.
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You can do that provided u did not cross the annual CPF contribution cap which is $30,600
It is very easy to cross the cap if u received high bonuses.
http://mycpf.cpf.gov.sg/Employers/Employ..._Limit.htm
The thing about karma, It always comes around and bite you when you least expected.
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WolfT, you're right. I bust the limit.
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@egghead, you can fill up a form to get your money back...
I've checked with CPF, they will not automatically refund you... but if they discover the excess contribution, they'll refund u the amount without the interests. So best to get it out yourself asap
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One point to note in this is that you can withdraw your SRS amount, if you need it, while you cannot withdraw your SA
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