Bad idea: Always transfer OA to SA (OA=$0).

Depends on your end goal. if in ur 40, you want to cut ur taxes, you wont be able to do top up to SA if u reach FRS

Hi, use this to calculate: https://valuewarrior.blogspot.com/p/cpf-calcula...

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Based on this you will take about 25 years to hit FRS assuming no change in income.

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Personally I managed to do it in 6-7 years.

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You can hit BRS after working for about 31 years, if you earn 3k/month with no transfer/no top up of SA.

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There's a lot of advice against OA to SA which can roughly be summarised as:

1. Keep money in OA to pay for housing
2. Keep money in OA to invest in higher yielding investments

These are basically defeated by the basic argument of:

1. Stability

No other investment is AAA rated and gives a higher investment rate. The likelihood of the government changing CPF policy, is lower than the chances of any investment losing your money.

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2. Housing

As someone who has achieved FRS thru OA to SA transfer and is about to purchase a house, I can tell you that it's not a concern. There is absolutely no need to have a huge sum set aside.

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If you're earning 3K monthly, you will get a 3 room flat for around 300K. Downpayment of 20% is 60K (or 30K each for a married couple). This can be saved over 6 years (or 3 years for a married couple).

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As the 1st 20K of OA has an extra 1% of interest, just leave that there and transfer the excess to SA.

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That means if you decide to marry, you just need to wait a year to have enough in your OA to make the downpayment.

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After purchasing your flat, just continue transferring the excess OA after 20K, to SA and you'll be on your journey to hitting FRS by 55 =)

Transferring OA to SA is actually incurring opportunity cost, that's why the interest is higher. The opportunity cost of putting into SA is not able to touch it until 65 or beyond (depending on what the government of the day decides), and so many variables along the way to prevent your money being used (getting married, other investment opportunities via CPF Investment). Is it worth to trade the flexibility of 1.5% per year?

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If you fear of earning lesser CPF interest in OA, what about putting your excess OA in T-bills or other financial instruments that earn higher than 2.5%? You can then redeem it in future for other users.

Planning for your financial future is a commendable endeavor, and optimizing your CPF strategy is a key component. I've encountered situations similar to yours, where individuals contemplate the idea of consistently transferring their Ordinary Account (OA) to Special Account (SA). Let me share a client case study to shed light on this.

I recently worked with a client who, like you, questioned the conventional wisdom. Through a personalized approach, we assessed his long-term goals, risk tolerance, and the need for liquidity. While continuous OA to SA transfers can boost your retirement savings, it's crucial to strike a balance and consider future needs.

Now, let's address a common misconception: hitting the Full Retirement Sum (FRS) doesn't necessarily require topping up your SA every month. Your CPF contributions, coupled with prudent investment choices, can contribute significantly over time. However, this varies based on individual circumstances.

In terms of your salary, hitting the Basic Retirement Sum (BRS) without transfers or top-ups depends on factors like expenses and lifestyle choices. It's not solely about the income but also how you allocate and manage your finances.

For personalized insights aligned with your unique situation, I recommend consulting a financial advisor. In my practice, I specialize in providing tailored advice to navigate such decisions. Connect with me on Instagram (@ngooooied) to explore how you can optimize your CPF strategy without compromising your current needs.

Best regards,
Ngooi Zhi Cheng