Financial advice for family? Stocks & bonds or CPF?

i have answered a similar question in this series of AMA, go check it out. Key is to note my sequence of portfolio investment. It is probably not well written by investment experts but I firmly believe that if you dont follow a right sequence of forming a financial safety net, you can’t invest well in risky investments.

I really depends on what are your financial goals and risk appetite. The CPF SA is actually what i advocate, but you do not need to pour all your funds into it at once.
For the first $60k in your CPF combined balance (with only up to $20k max from OA), the monies will earn an extra 1%. Since you are still young, u will not be near the limit yet. Thus it is worthwhile to topup to earn effective 5% return. Risk-free, regardless of market conditions.

In additional u will receive tax relief for the topped up amount. Eg, your taxable income is $40k, for every dollar u earn above 40k is taxed at 7%. Therefore, if u topped up $1000 into your special account, u get $1000 tax relief, u saved 7% of $1000 = $70 tax money. Effectively have gotten 7% return on your money, in additional u will earn 4%-5% interest yearly guaranteed. If you earn more than $80k, u will be in the 11.5% tax bracket, thus saving more.

Topup $7k into your special account every year, to enjoy the maximum $7k tax relief per tax year. You can also decide to topup CPF of your mother, to earn another $7k tax relief. This will be very beneficial if your mum's CPF had no money, as the first $30k earns 6% interest (assuming she is 55yo above). But doing this way you might also want to consider the legacy issue of your mum (are u the only child?).

Therefore, a year you can topup $14k, resulting in savings of almost $1k or more tax money a year. At the same time, you can have a smaller stock portfolio, that u can take on a higher risk level to attempt to achieve a much higher returns. The CPF will act as a strong base (riskfree), while your stocks will add the icing if it does well.

Bear in mind CPF is consistent, while the stock market might give a higher return over the long term. The timing of your retirement might not coincide with the right market timing. Eg. If the market goes into a multi year bear market when u retire.

Do chat me up on my fb if you want to discuss further or planning.