I age 55 to 60, topup CPF how much now?

With CPF changes from Sep 23 for Senior (between 55 to 60),  this increases monthly contribution from max cap of $6,000 to $6,300 in Sep.

For my cohort between age 55 to 60, our contribution rate is reduced from 37% to recently adjusted 29.5%; (that is, employer contributes $14.5%, employee contributes $15% per month.)

From Sep onwards, CPF topup is 29.5% of $6,300 per month.

In other words, now we can topup slightly lesser with this extra $300 per month into CPF.

I usually try to topup my CPF annual contribution to its max $37,740.

---

For those above age 55 to 60, this year 2023 total CPF contributions will be:

Jan - Aug 23: $1,770 x 8 (= 0.295 × $6000 x 8) = $14,160 (for 8-months)

Sep - Dec 23: $1,858.50 × 4 (= 0.295 x $6,300 x 4) = $7,434 (for 4-months)

Assume Add: 

3-mth bonus in Jul: $1,770 x 3 = $5,310

AWS in Dec23: $1,858.50

Total whole year CPF contribution = ($14,160 + $7,434)+ ($5,310 + $1,858.50) = $28,762.50

Additional $ to topup to $37,740 max = $37,740 - $28,762.50 = $8,977.50

As usual, scalable, 

earn more bonuses add more, (cap at $37,740); earn less bonus add lesser.

For someone whose total salary is 12+1+3= 16-months above,  he just needs to topup $8,977.50.

In other words,

1. Topup MA: $2,500 

2. Topup VC3AC: $8,977.50 - $2,500 = $6,477.50 (or $6,500); let CPF refund you the excess at year-end.  Of course the excess may still be deducted from our OA to pay CareshieldLife, Medishieldlife and even Incomeshield premiums.

3. Don't forget to topup RA: $10,200 to your ERS max. ($298,200 - $288,000 = $10,200) which is ERS difference between Year 2023 and 2022.  This RA topup does not enjoy tax relief.

4. For those lucky ones who earn fat bonus more than 9-months, including AWS, their annual CPF work contribution would earn them: $6,000×(12+9.5)×0.295 = $38k+ which is more than $37,740 max). Heavenly Son; if his pay exceeds $6,000 per month.

5. When is best time to topup $ into CPF?

Best is Jan23, always, that is to earn from Feb till Dec 23 interest. Any date within Jan23.  But Jan23 will not earn interest as it is not a full month count.

For this time in Feb23, it would be best any day in Feb23 to earn Mar to Dec 23 interest.

6. By the way, once we hit 55, we cannot topup SA to FRS anymore; except through RA to its max ERS yearly or through a VC3AC.



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