CPF 4% interest is a pure compounding interest vehicle.
With goalpost shifting (FRS/BHS) every year, as long u hit the max of BHS FRS, the interest earned will cover for the shifting goalpost.
Upon achieving this, u haf secured yur retirement income aka a security net which u can fall back on at 65-70.
I will put a range of age becoz we nvr know if the goalpost shift again on which age can start withdrawing the CPF Life's payout.
4% is also reviewed every year. if the interest is lower, u also cant do nuts becoz whatever u top up is kinda locked from u (SA/MA).
But for MA u can still have a good interest generating annually which could pay your insurance premiums. Technically making it free except for the cash premium of your insurance.
Most ppl who reach this max also want to share that "anyone" can achieve the FRS/BHS. That is not impossible. I would say it is true for the "anyone" who earn a decent income. When your disposable income isnt high, cash is usually the priority. The present is more impt than the 20-40 years in the future.
I'm not very super familiar with CPF but I believe that you would reap the CPF benefits at 55 only apply on the portion that employer/employee contribute after u max FRS. Becoz if we assumed that the annual interest is covering the FRS goalpost shift, only the CPF contribution monthly +some interest will cause your CPF SA balance to be in excess of the FRS. This excess can be withdraw at 55.
Also the other benefit is tax saving for high tax brackets income earners. Kacang putih earners will just simi tax-saving haha
CPF 4% interest is a pure compounding interest vehicle.
With goalpost shifting (FRS/BHS) every year, as long u hit the max of BHS FRS, the interest earned will cover for the shifting goalpost.
Upon achieving this, u haf secured yur retirement income aka a security net which u can fall back on at 65-70.
I will put a range of age becoz we nvr know if the goalpost shift again on which age can start withdrawing the CPF Life's payout.
4% is also reviewed every year. if the interest is lower, u also cant do nuts becoz whatever u top up is kinda locked from u (SA/MA).
But for MA u can still have a good interest generating annually which could pay your insurance premiums. Technically making it free except for the cash premium of your insurance.
Most ppl who reach this max also want to share that "anyone" can achieve the FRS/BHS. That is not impossible. I would say it is true for the "anyone" who earn a decent income. When your disposable income isnt high, cash is usually the priority. The present is more impt than the 20-40 years in the future.
I'm not very super familiar with CPF but I believe that you would reap the CPF benefits at 55 only apply on the portion that employer/employee contribute after u max FRS. Becoz if we assumed that the annual interest is covering the FRS goalpost shift, only the CPF contribution monthly +some interest will cause your CPF SA balance to be in excess of the FRS. This excess can be withdraw at 55.
Also the other benefit is tax saving for high tax brackets income earners. Kacang putih earners will just simi tax-saving haha