CPF - FRS target

 As many are aware the cohort of current singapore generation will be require to have FRS amount or BRS (with property plegged). 

Given the vast amount of folks already covered the topic of FRS, I shall not focus on this particular topic. Instead the focus shall be whether should one topup and transfer OA to SA at the quickest possible time. 

On first glance it is logical that most will be advocating the pros of OA-SA transfer asap in order to reap the benefit of 4% p.a. interest of SA which on a compounded basis is surely one of the safest vehicle in the market (privilege of being a Singapore citizen or PR :) ). 

I am a strong advocate of SA top up for individual to reap the benefit of income tax however question always ponder upon whether should OA-SA transfer be executed. 

Example below will explain my thought or why I doubt it is the best method for all. 

The marginal interest rate differential between OA and SA is only 1.5% as such the additional benefit that one can achieve by transfer 20k across is only 300 for that year. 

However with the transfer it accelerate the SA amount closer to FRS which might appear as a great result which many are show casting the achievement in their 30s.. What is missing here is you are essentially giving up the tax benefit for SA top up (RSTU) as you are not able to do so once FRS is hit. 

Given the median income as published by the various statistics, i will presume that most peers in the 30s shall be within the income tax bracket of 7~11.5%. As such being able to RSTU 7k p.a. translate to tax saving of $490 at 7% rate which is a saving of $190 from the earlier example of $300 additional interest from SA relative to OA.