Investing in ETF

[Lala81]

http://www.straitstimes.com/business/top-ups-to-cpf-for-loved-ones-on-the-rise

 

Here it is. The idea is for you to top up for your parents who are close to cpf withdrawal age already.

 

Does that still apply to the current generation who have to contribute to get their monthly withdrawal under CPF LIFE?

dunno about higher tax by then..

but at least i know i've got some steady money to spend in my old age in addition to cpf in addition to loose cash i have in the bank.

 

anyway, i dun think the rental income (if i happen to do that) + withdrawal amount would attract more tax than i'm paying now.. should be okay :-)

 

if i'm not wrong, it's cpf. there is a limit though.. got to read up more to confirm.

 

ya..like lala said, u don't need to... having money locked up for so long just to save that $200 over isn't worth the hassle.

just buy your own via banks or brokers. more liquid your money is..

 

My SRS money is in A35 so that they don't potentially gain too much and harder to withdraw over that 10 year period.

[Kusje]

Does that still apply to the current generation who have to contribute to get their monthly withdrawal under CPF LIFE?

 

My SRS money is in A35 so that they don't potentially gain too much and harder to withdraw over that 10 year period.

 

 

Sorry, not really sure on the mechanics of this. I have 2 brothers so it doesn't make sense for me to contribute additional money to my parents CPF for tax avoidance 

 

My wife is the only child so she is doing it.

[inlinesix]

 

 

Sorry, not really sure on the mechanics of this. I have 2 brothers so it doesn't make sense for me to contribute additional money to my parents CPF for tax avoidance 

 

My wife is the only child so she is doing it.

 

You no scare IRAS is it?

 

The correct word to use is tax planning

[Kusje]

tax avoidance, tax planning. both can la.

 

tax evasion then cannot.

[Kurty]

ok, I spread my eggs.

 

2 account contributing $300 each monthly - $200 ETF and $100 on A35.

 

Huat ar!

 

just an update to those who might be keen.

 

POSB are smart, they only allow 1 ES3 and A35 per customer.

Regardless of how many accounts they got.

 

much earlier, I tried to apply using my own and joint.

Their system only recognised the latest transaction.

 

[Loki]

Contribute before they are 62, then let them withdraw out at age 62 onwards? (assuming your parents have no additional income after that)

 

I always thought SRS was own contribution only (not that i bothered to check, my kid is 4 lol)

 

your SRS has to have enough $ to invest. With singapore having minimum lot size of 100 shares, putting in small amounts doesn't really help.

 

 

Gotta remember that year of assessment 2018, maximum tax relief for anyone is $80k.  So, if your taxable income is more than that, there's no point putting any more money in SRS in 2017 onwards right?  You won't get to enjoy the tax relief anyway.

 

So this tax relief cap runs counter to what SRS is trying to do - to get people to put aside more for retirement.

Edited November 15, 2016 by Loki

[Kusje]

Gotta remember that year of assessment 2018, maximum tax relief for anyone is $80k.  So, if your taxable income is more than that, there's no point putting any more money in SRS in 2017 onwards right?  You won't get to enjoy the tax relief anyway.

 

So this tax relief cap runs counter to what SRS is trying to do - to get people to put aside more for retirement.

 

Um. Tax relief is not taxable income leh.

 

Say you made 100k last year and you have tax relief of 10k, you will only be taxed on 90k income.

 

This 80k max means that if you make 1mil and somehow have a tax relief of 200k (whether through having children or donating to charity), you can only be relieved of 80k max! This means you will be taxed based on 920k of income (1 mil - 80k).

[Loki]

Um. Tax relief is not taxable income leh.

 

Say you made 100k last year and you have tax relief of 10k, you will only be taxed on 90k income.

 

This 80k max means that if you make 1mil and somehow have a tax relief of 200k (whether through having children or donating to charity), you can only be relieved of 80k max! This means you will be taxed based on 920k of income (1 mil - 80k).

 

 

my bad, you are right.  OK, so if tax relief more than $80k no point putting additional money into SRS?  

[Lala81]

my bad, you are right. OK, so if tax relief more than $80k no point putting additional money into SRS?

In short yes. But I think it's not easy unless u are a mother.

[Loki]

In short yes. But I think it's not easy unless u are a mother.

 

 

errr ... if a high income mother claims working mother's child relief and she has 2-3 kids, easily bust the cap already

[Lala81]

For example. Each qualifying child relief is capped at 4k per year up to a total of 50k which can be shared with working woman's relief. So a dad can claim only relief 8k for each year.

 

The woman can claim much faster cos her cap is based on a percentage of her taxable income.

 

With my average family sized relief, srs and cpf, I am nowhere close to 80k. U must donate a hell of a lot to qualify. Unless there are some other ways to claim relief as well.

errr ... if a high income mother claims working mother's child relief and she has 2-3 kids, easily bust the cap already

Yeah. But u can only claim a cap of 50k. People seem to forget this point...

 

So u can claim like us. 4k over 12.5 years. Or she can claim 10k over 5 years. Same same lah.