Asked by Anonymous
It's an unpopular opinion/decision. Any advice or 'better' ways to use that $5k?
Interesting that you are planning to do that, in fact you can read this article I wrote about. The pros and cons are highlighted below.
Essentially this act of topping up the SA account is about your retirement funds compounding at a faster rate of 4%+ risk-free rate.
By doing this action:
If you plan to withdraw it in the next 10 years, maybe a SSB at around 2.4% would work better? no fees to withdraw also.
It depends on your objective. Money that goes into CPF cannot be taken out in the short term.
1) Do you have a 6 months emergency fund? 2) Do you have any plans for any cash use that is foreseeable in the next 5 years? (hint wedding, house, travel) 3) When I was 25 years old, I was already planning to spend $30,000 for wedding and $20,000 for basic renovation. Hence I only put my money in high interest saving account (OCBC 360 that time). I didn't touch or invest because pretty much foreseeable expenses.