14 October 2019

What are the ways to put money INTO your CPF?

Reader 'Adam' has been sharing a lot of information from his experience as a post-55er.  Here's another that he shared on ways to put money back into the CPF accounts, which I thought was worth reposting to share to a wider audience who might have missed his comments to another post.

Some people seek ways to extract money out of CPF, and certainly would not be looking at putting money into it!  So this might come across as being strange and would not resonate with that audience. Hah. So skip this if you fall into the above category.

But if you're not, read on!

[As shared by 'Adam' ... (with some edits) ...]

I thought it would be a fitting complement to your post on "How are the excess fund withdrawn after meeting the FRS?" with this one "What are the ways one can take to put money into their CPF accounts!"

There are a few ways one can put money into their CPF accounts besides the automatic monthly deductions from your salary and the employers' contribution.

But before I go into the above topic, I would like to highlight again this tip on the best time to make withdrawal from your CPF OA and SA if you wish to only withdraw the interests earned for the year and at the same time keep the principal amounts intact to earn further interest in the next year. This step is important especially if you have substantial money in your SA that you want to "preserve" to earn the yearly 4% interest. The best time to withdraw the interests is in Dec, and you can only withdraw 11 months' worth of interests! That is, 11 months of interest from your SA (for Jan to Nov), and likewise, 11 months of interests from your OA.

Here are the steps one can take to grow your CPF

1. Monthly deductions from your salary. The amount deducted from your salary will depend on your salary capped at $6,000 a month and a further cap of $102,000 per year. What this means is that if you earn $7,000 a month, the CPF deduction (contribution) is based on $6,000. Say, you have 5 months bonus, then the deductions from your full year of salary and the 5 months will be capped at $102,000, giving you the maximum contribution of $37,740 for the year.

2. Have more than one job. If you work two different jobs with two different employers, both employers are obliged to contribute your CPF via the employers' contribution. This way, you can exceed the limit of $37,740 per year contribution to your CPF.
[I was wondering if this is valid though? Thought the cap is an upper bound in totality?]

3. Make voluntary contributions to your CPF. Say you earn less than $6,000 a month and together with your bonus, your annual salary is less than $102,000. You can make voluntary contributions to your CPF any time to hit the yearly limit of $37,740. In my case, after I turned 55 years old, my CPF contribution was shifted to 26% instead of 37% of my salary [which was pre-55]. So I have been doing voluntary contributions to my CPF to hit the $37,740 limit each year.

4. Return money that was withdrawn for property purchase. If you have extra money, you can return the money into your CPF to redeem the amount that was withdrawn to purchase property, including the accrued interests. My wife and I have returned the full amount we withdrew from our CPF OA, including accrued interests, that we had used to purchase our properties.

5. Top up your RA. This one is only applicable to those 55 years old and above. I have topped up my RA to the ERS, and I continue to top up each year to meet the new RA ERS.

6. Invest through CPFIS. This one is a little controversial in that you could lose money through bad investment rather than build your CPF. There are investors who have successfully enlarged their CPF OA and SA through astute investment through CPFIS.

7. Inheritance. You can only receive inheritance into your MA, SA and RA up to the prevalent limit. The rest of the inheritance money will be paid to you in cash. Put another way, you cannot bequeath CPF money into your beneficiaries' OA, you can only bequeath to their SA, MA or RA, and only up to the limit prevailing.


Maximising CPF (post-55)
How will CPF retirement sums be formed (post-55)
How are excess CPF funds withdrawn after meeting FRS (post-55)


foolish chameleon said...

5. Top up your RA. This one is only applicable to those 55 years old and above. I have topped up my RA to the ERS, and I continue to top up each year to meet the new RA ERS.

bringing this logic to SA side, if its already full, doesnt the 4% interest sufficient to cover the yearly increase in the yearly limit?
or the interest earned doesnt count ?

Anonymous said...

For the SA, once the amount reaches the SA limit, you cannot top up any more money to it, except through the regular contribution from your salary. And the amount of interest earned in the SA is included in the computation for the limit.

Here is an example. For those below 55 yo, the SA limit for 2019 is $176,000. Supposing you had $170,000 in 2018 and the interest earned from your SA amount in 2018 was $6,800. Together they added up to $176,800 exceeding the 2019 SA limit. You are therefore unable to top up any more money to your SA. However, your SA will still be receiving contributions from your monthly salary portion.

The big difference between the RA limit and the SA limit is that the RA limit does not consider the interests earned each year. So for example, for those 55 yo and above, the RA ERS limit is $264,000 for 2019, while I already have close to $300,000 in my RA, including the interest earned since my RA was created when I turned 55. Next year, 2020, when the RA ERS is raised to $271,500, I am still able to top up another $7,500 into my RA!

I will also take this opportunity to correct a misconception about CPF Life. There was misconception that once you turn 55, your RA money will be taken away and put into the CPF Life annuity. The CPF policy was tweaked in 2016 to allow CPF members to defer till 65 to decide on which CPF Life plan to take up. So until they decide on the CPF Life plan (whether Basic, Standard or Escalating Plan), their RA money will remain in their RA.

If you chose the basic plan, they will deduct 10% of RA money to be placed into the CPF Life annuity and 100% of your RA if you decide on the standard plan and escalation plan.


Unknown said...

This formula won't work the man in the street, your formula only work for high end earner,about 70% of Singaporean are low and middle income earners,

Lizardo said...

Thanks to "Adam" as always for the prompt response! 8)

Lizardo said...


It's perhaps not about level of income, but about how much is saved? A high income earner who spends every single cent he makes wouldn't help.

But I don't disagree that this is generally more achievable for those with higher disposable income.

Not for everyone.

Anonymous said...

Hi Lizardo,

I missed this little query about the CPF contribution exceeding the $37,740 cap to my point #2 regarding the contribution from two different employers.

I raised this query to the CPF Board in January this year (2019) and below is an extract of the Board's response:

"Yes, employees who are concurrently employed by more than 1 employer, may receive mandatory CPF contributions of more than $37,740.

If a person is concurrently employed by more than 1 employer under contract of service, all his employers would be required to make CPF contributions based on his gross wages earned from each employment, up to the respective wage ceilings."

On a separate topic on the CPF, after covering the various ways to maximize / optimise CPF contribution and withdrawal, one of the logical follow on questions would be "What is maximum amount a person can grow his CPF to by age 55?"

Mathematically speaking, a person contributing the maximum of $37,740 a year to CPF from age 25 to 55 consistently without a break, he will have :

1. At least $1M in his OA
2. Reached the maximum amount for his MA (at $57,200)
3. Meet the ERS amount for the RA

This leads us to the unspoken and informal hierarchy of CPF members. At the very top achieved by people 55 and above, we have :

1. CPF OA millionaires. These members have $1M or more in their OA accounts. They also maxed out the RA to the ERS, and their MA to the prevailing BHS.

In-between this top level savers and the next level in the hierarchy, we have savers with $1M in their OA and perhaps only the FRS in the RA.

2. CPF millionaires. Members in this grouping would have $1M total in their combined CPF accounts. This level is slightly easier to attain than the CPF OA millionaire level and can be attained by members in their early 50s or even late 40s for high earning individuals.

And below this level, are the various permutations of CPF savings levels.

Given that most CPF members would have utilized their CPF OA monies for home purchases, it is thus no small feat for anyone to achieve OA millionaire "status". A rare breed.


Unknown said...

Never never put your hard saving into CPF they will not return you at all ....

Lizardo said...


How old are you?

I will experience the truth when I reach 55. 8)

Lizardo said...


That's pretty high end.

Clarifications with CPF Board keeps turning up new nuggets of information that are not common knowledge.

I guess our queries are increasingly in-depth.