What financial products should I recommend to my 49 y/o mum to aid in her retirement, and how can she adjust her CPF to maximise her returns for retirement?

My mum is 49 this year and has only 7.5k in OA, 12.1k in SA. My dad and my mum are paying our hdb installment of 700 a month thru cash. She is working as a blue collared worker earning around 1.8k. What product would be recommended for her to buy and how can she adjust her Cpf contribution for retirement?

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Frankie Rappaport

17 Feb 2020

-inform yourself well and broadly (attention: pros often have conflicts of interest and nobody can predict the 'real' future)

-ask your Ma about her risk tolerance (with very different probabilities ALL assets can be lost)

-when you come to investing, make sure that your whole family supports the decisions 100%! coinvolve. important.

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Elijah Lee

13 Feb 2020

Senior Financial Services Manager at Phillip Securities (Jurong East)

Hi anon,

The most fundamental tool in retirement is CPF Life. Your mom is working for an income now, when retirement is here, income needs to come without her working. CPF Life is provides a life long payout which allows her to have peace of mind that money is coming in.

Thus, the best thing for her to do is to ensure that she has sufficient monies in her SA. This may be a bit of a bitter pill for some to swallow since some people don't have a favourable view of CPF. If you are working, contributing to her SA via RSTU may help to boost her SA monies, and save you some tax. Else, she will have to rely on her work contributions, and hopefully some top ups straight to SA with her spare cash will work as well.

Without confirming that she is able to reachthe full retirement sum, she really shouldn't be looking at any other products.

Also, don't do CPF OA to SA transfer. If she loses her job, her OA savings are her only method to sustain the housing repayments. She'll need that as a buffer.

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