Asked by Anonymous

Is it the best choice to top up my CPF for the compound interest starting from now or is waiting out for other benefits (if any) the better choice?

Currently 21, serving NS.

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    • HC Tang
      HC Tang, Financial Enthusiast, Budgeting at The Society

      Top Contributor (Jan)

      360 Answers, 869 Upvotes
      Answered on 15 Sep 2018

      As you are only 21 serving NS, suggest you save enough for emergency funds (6months expenses), save some for investment and put about 5 to 10% monthly and top up into CPF SA for the compound interest and as part of your investment portfolio. Once you start work and continue to top up this will becomes your compulsory savings that gets 4% compounding interest for retirement and helps to get tax rebate.

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    • Charmaine Ng
      Charmaine Ng, The Code Breaker at @ Every Chye Peng Stall.
      57 Answers, 146 Upvotes
      Answered on 14 Sep 2018

      Hi, if you can afford to topup your CPF and with a healthy emergency fund I'd encourage you to start right away. The interest rates for CPF has stayed for the longest time and it is pretty much reliable in my opinion; but to invest all into it without an emergency fund is a no-no because you never know when rules might change and turn the table on you.

      Let the compound interest works for you but keep yourself buffered too. In the event that other investment comes up you will still be able to take part with your cash (optional!) If you have specific ideas about what other benefits you're referring to; maybe it would be better to put it here so we can speculate. hahah. Hope to be of help!

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    Nicholes Wong
    Nicholes Wong

    Top Contributor (Jan)

    278 Answers, 395 Upvotes
    14 Sep 2018

    There is no really a need to wait for other benefits cause no one really know are there going to be other benefits that is worth losing the compound interest so just top up. BUT if you are willing to take more risk buying stocks and ETF, at your age might be better. Because you are young can take more risk and also not much liabilities

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