facebookWhen does it make sense to top up my parents RA, instead of giving them monthly allowance? - Seedly


Bjorn Ng

Bjorn Ng

Level 13·Business Analyst at 10x Capital

24 Dec 2019


When does it make sense to top up my parents RA, instead of giving them monthly allowance?

Hey guys! I've been looking at topping up my parents CPF instead of giving them monthly allowance, 1st for better interest and 2nd for tax relief. My dad is 65 and my mom is 56. I understand that topping up will both go into their RA, which my dad will get through monthly payouts (not sure how does it work, will the amount change as more top ups go into his RA?) & my mom will not see it till 65. I'm wondering, does it make sense to top up, or should I continue giving them monthly allowance?

Discussion (7)

What are your thoughts?

There's 2 factors we can be looking at -

  1. Their time horizon from now till they reach 65, i.e. if they are a year or two from reaching 65, then it certainly make sense to top up their RA to earn the 4 to 6% interest.

  2. If their individual RA account hasn't reach 30k (combined across RA, OA, SA), then it makes sense to top up as it will earn them 6%.

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For me it makes more sense to top up. As you said the interest is higher. Furthermore at their age when you are giving allowance to them, they are probably in their 50s.therfore they only have 10-15 years before seeing the cpf. At a 4% interest rate for a duration of 10-15 years and possible tax saving for you, i find it a very worthwhile financial aspect which is rational

For me it's 3 reasons:
1. My parents are still working and do not need the money.
2. My parents are...

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