Is 1M65 really that desirable? I would rather have $1M cash than have the government give $5k~ monthly payouts till I die (in which I may not even receive the full sum). What are your thoughts?

Like u I avoid putting $ into CPF due to it’s illiquidity. Except for the min amount into MA.

BUT the accrued interest (AI) is still your money... so even if you use your CPF to buy a property, it’s fine when the incoming funds from the sale covers the outstanding loan and AI ie +ve sale

It goes into your OA and can be reused to purchase your new property.

Only sucks when you don’t have enough to buy the replacement property due to inflation or price increases.

Or sell 1 buy 2 (2nd being an investment which gives you a passive income) or live in one and pass the 2nd to your child(ren) when the time comes and if you have 2 kids.

Each can inherited 1 as it would get harder for them to buy their own if not for your help

and yeah, you can’t touch it otherwise, maybe except children’s education etc​​​

The answer is super simple. If you are able to consistently produce higher % returns than what CPF is giving you, then 1M in hand is better.

However, do note that the common man on the street will find it hard to beat 4% a year growth in stocks/property.

I would begin by saying that the comparison is fundamentally flawed.

Even lottery winners in countries like USA are given the choice of smaller lump sum or regular payment over time albeit, a bigger lump sum in totality.

A $1M cash now with tax versus a $1.5M tax-free CPF might be a better fit. I would choose the latter.

For clarity:

1. Principal (same even with bank) + Al (not paying but refund own $ back to its rightful place). Acrrued need not be refunded if you never sell your property or if it's transacted at market value (even at a loss).

2. It can be withdrawn once RA meets the statutory retirement requirements and it is still your $ end of the day.

For the 1st point, you can withdraw the amount in your CPF above FRS.

E.g. 1mil - FRS 181K, you can withdraw 800+k at age 55. But most people choose to leave it inside to compound further at an interest of 4% p.a. with SA Shielding.

2nd point, if you dont sell the house, you will never need to 'pay back' the money. Even if you sell the house and upgrade, when you buy the new house, the amount you returned can be used again for the new house. Thats the whole point of CPF scheme to ensure you have a roof over your head.

But yes, I agree with you on the illiquid part as you cant toucg the money till age 55. Even if you get retrench now due to COVID pandemic, you cant withdraw the money for basic needs. Thus the importance of holding cash for emergency is still preferred.

I would say that if you have excess cash after investing and savings, can consider topping up and treat it as an endowment/retirement plan till age 55.