Asked by Anonymous
Asked on 07 Nov 2018
In short, the key is there is no such thing as 0% risk in any investment. Hence, let’s talk about probability. The probability of this happening in Singapore is very low, compared to the alternative out there. I would and have taken my chances with the CPF and it has proven to be very lucrative.
Unlikely the government will just take your money; too much push back for that to happen.
However, if you are doing long term planning based on rules now; do note they could be adjusted - eg you might be thinking no problem to meet FRS until recently announced increase and so you would need to change your plans to suit.
Nothing is certain in investment. The political parties or climate may change. The interest rate of 2.5% for OA, 4% for MA and SA could also drop. Anything could happen and there is why you need to diversify your risk. Nonetheless, it is still better to build up your CPF because the risk is lower compared to other investment instruments. Just my humble opinion.
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I took a loan of $200,000 from CPF for my 5 room HDB in 1995 for 25 years after I sold my 4 room HDB for a profit of $180,000.
Use the cash to buy a 2 Bedroom in 2006 with the cash 20%.
You can take the CPF out by selling your HDB and buying another but now you need to give back 50% of the profit before they loan you.
This way you reduce your CPF holding too much of your Money.