Anonymous
Any purpose in topping up cash to Parents' CPF after they have met the FRS?
Hi, dumb qn here..
I've heard that topping up cash to parents CPF account is a good idea as the interest rates earned (4-5%?) would be quite reasonable, and you can get tax reliefs.
Just wondering if both my parents' Full Retirement Sum (FRS) $171k i think has been met, will I still be able to top up cash to their CPF account to get tax relief? It seems like there is a limit to how much I can top up. They are both >55, <65. but i heard abt FRS vs ERS too? any advice is gr8ly appreciated!
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Luke Ho
07 Jun 2019
Founder and Director at CFX Money Maverick Pte Ltd
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Gerard Ong
29 Oct 2018
Tax Manager at Ernst & Young
If your parents have met the FRS, then there's no tax relief when you top-up their CPF RA. In that case, the only purpose would be for earning the interest rates from cpf. However, do note that the monies topped up will only be disbursed to your parents gradually via monthly payouts from 65 onwards; it won't be available as a lump sum withdrawal.
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if they have income ($4k/yr, including tax exempt income such as interests and dividends), even can ...
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It's not a dumb question.
You will be able to top up their CPF OA account for a reasonable, completely liquid interest of 2.5%. You will also continue to enjoy tax relief. If they are already above 55 and have met FRS, it's locked in.