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Hi AK,
I've been following your blog for years and thanks for all the tips you've shared.
I transferred a considerable sum of monies from OA to SA when I was 34 as I was inspired by your strategy of doing so. I've been trying to build up my RS and hope that my SA balance will reach my RS within the next few years.
I'm also considering to top up my SA with cash to take advantage of the tax relief. However, I realised the strategy of transferring more OA to SA again may interfere with my plans to get tax relief in subsequent years, as the faster my SA grows, the faster I'll reach RS and after I reach RS, I will not be able to top up my SA and earn tax relief.
Is my understanding correct? If yes, would it be better if I slow down on the OA transfers so that I can take advantage of the tax relief in subsequent years, esp since I'd expect income to get higher (and hence more in need of tax relief)?
Hi YY,
If you would like to have tax benefit, yes, MS Top Up to SA is the way to go. Up to $7K a year of cash top up will enjoy tax benefit.
Once you have hit the MS (the FRS) in your CPF-SA, you will not be allowed to do anymore MS Top Up to SA.
Thus, slowing down or stopping OA to SA transfer might be a good idea if tax benefit from MS Top Up to SA is something that is important to you.
Best wishes,
AK
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