Asked on 24 Feb 2020
What investments should I be looking at for my age? What is the best usage of my CPF now?
When u say saved enough means you do not need to rely on CPF money for retirement.
If I were you, I would like to debt free when I retire. If I can afford, I will pay it off with cash as the CPF money providing guaranteed return.
For investment, I always prefer to use cash rather using CPF OA.
Firstly, you need to have a complete understanding of your finances. Some of the important information include:
Bank account balance, and its rate of return
CPF Ordinary Account balance, and its rate of return
Current Mortgage loan, payable term, and rate of interest
With these information, we need to answer one question,
"How confident are you that the non-guaranteed returns from the dividend will consistently be higher than the guaranteed rate of interest for your mortgage?"
As a result, are you willing and able to take the risk for potentially higher return that you may not need? This is because you have mentioned that you have saved enough and has just retired.
To help you, it will be important to have a detailed calculation on your cashflow, especially on the projected expenses during your retirement. Here is a guide to help you: https://www.blog.pzl.sg/understanding-your-personal-cash-flow/
Having mentioned that, you may choose to invest your money if you are able to create a well-diversified portfolio that is capable to help you handle your mortgage through its repayment term. All these require comprehensive financial planning to avoid pitfall.
You can either do this on your own or speak with a professional who is capable of helping you do the required calculations.
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1 more comments
24 Feb 2020
Since you have enough savings, you should use your bank savings, not your CPF savings, to pay off your outstanding mortgage so that you are totally debt free. Grow your CPF savings through compounding effects at 4% in your retirement account so that you could have more retirement funds at age 65. Just my humble opinion.
I believe in having a fully paid house when you retire, so that you have a peace of mind and not have to worry about the monthly mortgages. Even if you pay off your outstanding mortgage, you still have the option to redeem your CPF plus accrued interest used if you still have excess funds. Consider your priorities and go with the decision that you're most comfortable with.