Voluntary Contribution to CPF MA in 2021 (Part 2.)

Darry is the reason for this blog which is really my reply to his recent catalytic comment.

There are many gems in the comments section of ASSI and if you have not read Darry's comment, it is in my last blog entry and I have hyperlinked it at the end of this blog.

Actually, you might want to read his comment first as it would help you better make sense of this blog entry.

Hi Darry,

I am thinking of doing this (i.e. not doing VC to MA but simply doing VC to all 3 CPF accounts) when I turn 50 as the CPF Allocation Rates for members age 50 to 55 will place a bigger proportion of our contribution into the SA.

Just based on eye power, the increase in contribution to the SA looks like it will be a big jump of more than 40% once I turn 50 and this will last till I am 55.

I blogged about this big jump more than 3 years ago.

Read blog here:
CPF SA savings 10 years from now.

Reference provided at the end of this blog.

With the BHS increasing by $3K while the CPF Annual Contribution Limit remains unchanged in 2021, doing a $3K VC to MA in order to reach the new BHS would mean less of my VC to all 3 accounts going to my SA later on.

Easy to miss this detail if we are not diligent enough.

So, you are right that it makes sense for people of my age who, like me, do not pay income tax to forgo VC to MA and just do VC to 3 accounts in the new year.

This is for maximum benefit.

$10 is still money and I don't ever look down on money. ;)

Thank you for crunching the numbers and sharing with us here. :)

So, with this blog, AK is bringing forward his plan to stop VC to his CPF MA by one year.

Yes, AK is flipping prata and won't be doing VC to MA in 2021.

AK will only be doing VC to all 3 CPF accounts (OA, SA and MA) in 2021.

Hey, $10 is still good money.

Probably good for a few roti prata and with eggs too. ;p

I am not letting Darry's effort and kindness go to waste. 

This is also why I decided to publish my reply to Darry as a blog as not many readers go to the comments section.

Readers who are in the same boat as AK will probably find this sharing interesting.

Readers who are not in the same boat now might want to take note too as there is plenty of room in the boat.

Gambatte! 

Read Darry's comment here:
Voluntary Contribution to CPF MA in 2021. (Published on 28 Dec 20.)

Reference:
CPF Contribution and Allocation Rates.