Topup CPF SA vs RA for Tax Relief – Irony?
Why the “young” and the “old” have different focus/objectives? Or is it because they are both ignorant of what can be done and the benefits?
Young (below 55)
Prefer to do yearly cash topup to CPF Special Account (SA) of $7k to get tax Relief, instead of transferring their OA to SA as soon as possible and let compound interest balloon their SA to beyond FRS earliest possible. (assuming they don't need OA for Housing).
Old (above 55)
Prefer to transfer SA/OA or cash topup to RA to hit ERS (Enhanced Retirement Sum) at 55 and let it balloon with compound interest, instead of doing topup to RA to get annual tax relief of up to $7k per annum for personal and get tax relief for others if there is still room? Income tax relief is supposed to be more valuable at an older age assuming higher income levels?
So why are you making such a decision?
Which comes first?
Which is more important?
Which can help you “guarantee” a higher SA balance for retirement? Read How to Stop CPFB from transferring SA to RA
What are other “hidden benefits” or otherwise which you are not aware of?
(Read IRAS website on Tax Relief after 55)
(Read IRAS website on Tax Relief after 55)
