Asked by Ng Kwok Fei

I would like to put 20k into my 23 yr old son CPF. Will I be able to get better returns in other investment over 30 plus years than CPF?

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    • Hariz Arthur Maloy, Independent Financial Advisor at Promiseland Independent

      Top Contributor (Nov)

      229 Answers, 393 Upvotes
      Answered 2w ago

      Definitely. In fact you're locking up that 20k for 32 years and is irreversible.

      A balanced portfolio over 30 years can give you a 5-6% compounded return, a moderately aggressive portfolio can give you 7-8% returns plus gives you full liquidity.

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    • Teo See Hwa, MArketing Associate at Propnex
      39 Answers, 44 Upvotes
      Answered 3d ago

      Nobody know which is better only Time know.

      I put 20% deposit $108,000 in 2006 and 4 years later property appreciate by 1 million.

      If I use your question what will be your answer.

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    Yixiong Chang

    Top Contributor (Nov)

    146 Answers, 186 Upvotes
    06 Dec 2018

    Why don't you topup your own CPF special account instead. Yes, u might not earn the extra 1% but u are able to receive tax relief. 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. If u are earning more than $80k, u will be in the 11.5% tax bracket.

    Topping up your son's CPF although is able to earn the extra 1%, u will not be able to use the funds for yourself.

    There are definitely plenty of investments that can potentially produce better returns, but it comes with higher risk as well. CPF provides superior risk adjusted return.

    It really depends what purpose u intend your 20k for. You cannot use CPF monies except for its allowed purposes only. Not to mention it is your son's CPF.

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