CPF

Every Singaporean's contribution till 55 and beyond

ASK A QUESTION
CPF
  • Asked by Anonymous

    Gabriel Tham
    Gabriel Tham, Kenichi Tag Team Member at Tag Team

    Top Contributor (Jan)

    415 Answers, 742 Upvotes
    Answered 15h ago
    It is very hard to say. We have been in a super low interest rate environment globally, with more money printing than ever. However, I do think that for Singapore's growth it has already peaked and will not be able to sustain the same level of economic growth as past generations. This means that the ability of our state investment funds to grow is very limited. There must be a sustainable rate of growth to give out guaranteed CPF interests and in the current state, even a guaranteed 4% is extremely extremely rare.
  • Asked by Anonymous

    Hariz Arthur Maloy
    Hariz Arthur Maloy, Independent Financial Advisor at Promiseland Independent

    Top Contributor (Jan)

    277 Answers, 468 Upvotes
    Answered 10h ago
    You can purchase stocks, gold, Unit Trusts, ILPs. My recommendation would be to invest in a globally diversified portfolio with asset allocation according to your age and investment horizon using funds. You can speak to an FA like myself to set one up. It's cheaper now to invest using CPF then ever before and it's still quite possible to achieve a projected 6-8% returns per annum over a 10-20 year horizon from the approved fund list provided by CPF themselves. I've selected 6 of them to create such a global portfolio for my clients. The best part about investing your CPF is that, if at any time, there is a worry for an impending recession, you can always exit your positions and go back to earning a 2.5% interest on your OA.
  • Asked by Anonymous

    Hariz Arthur Maloy
    Hariz Arthur Maloy, Independent Financial Advisor at Promiseland Independent

    Top Contributor (Jan)

    277 Answers, 468 Upvotes
    Answered 15h ago
    At least 100k more. But expect it to be closer to 300k.
  • Asked by Anonymous

    Christopher Tan
    Christopher Tan, Executive Director at MoneyOwl Private limited

    Top Contributor (Jan)

    48 Answers, 93 Upvotes
    Answered 3d ago
    Dear Anonymous, thank you for your question and so sorry for replying late. It is difficult to answer this question in full accuracy as I do not have the full context. So let me provide a general guide towards planning for retirement as well as make some assumptions. 1. You might want to decide how much money you need per month for retirement. And from the amount that you need, what portion of it is the "die die must have portion". This portion can be taken care of by CPF LIFE. The good thing about CPF LIFE is that it pays out a monthly amount regardless of market condition and it hedges against longevity risk as it is an annuity. Your funds in CPF LIFE is also currently guranteed at 4% p.a 2. So as a guide, if you need say $1400 per month in today's money at age 65, you will need to have about $176,000 (known as the Full Retirement Sum or "FRS) in your RA today at age 55. Currently, the FRS increases by 3% p.a. Assuming that remains the same, in 15 years time, your FRS requirement would be about $274,000. By then, with an FRS of $274,000, the monthly payout can be conservatively estimated to be about $1800 p.m. 3. So if your SA currently has not reach $176,000, you can consider topping up from OA to SA to build your FRS for the future. However, please be mindful that this transfer is irreversible and you need to be certain that you do not transfer so much that there is not enough money in your OA for other purposes such as your mortgage. 4. Nothing is stopping you from doing both the OA to SA transfer and investing in ETFs at the same time. However, I alway find that the STI ETF is too narrowly focused and as Singapore is a very small market, it might be better for you to consider investing in the S&P500. 5. Depending on your risk appetite, you might also want some bonds in your portfolio to moderate the volatility of your portfolio so that you can remain invested even during extreme market volatility. Hope this helps.
  • Asked by Casey Choo

    JayJay Lin
    JayJay Lin, Millenial at Memes
    3 Answers, 11 Upvotes
    Answered 4w ago
    Because it is your money. While not immediately necessary to know, it is still a good idea to know what is being done with essentially, your money. Many seem to brush it off as CPF is more or less untouchable until you apply for a BTO/resale flat. While I do recommend reading up on CPF contributions and employer contributions, OA,SA,MA, CPF LIFE, and using OA to pay for housing, considering that individuals don't have much control over where the money goes, it is objectively not important for undergrads/fresh grads to understand CPF. The next hurdle IMO would be when applying for a BTO/resale. At that point one would most likely have sufficient amounts in their CPF accounts but still would be good to understand what is happening with their monies.
  • Asked by Kkel Viin

    Christopher Tan
    Christopher Tan, Executive Director at MoneyOwl Private limited

    Top Contributor (Jan)

    48 Answers, 93 Upvotes
    Answered 2w ago
    Hi Kkel Viin, thank you for your question and so sorry for the late reply. In every financial decision, there are different perspectives you can look from, so it is really not a straightforward answer. From the investment perspective, it is really simple. If your loan interest rate is lower than your OA interest of 2.5% p.a., then it make sense to drag the loan. If you have cash sitting in the bank account doing nothing and earning less than your mortgage rate, you might want to use your cash to pay off your loan. But things get more complicated when you start to also consider the financial planning aspect of the equation. How is your total debt servicing ratio (defined as your total monthly debt repayment/Grossincome)? Is it higher than 40% of your gross income? How is your debt to asset ratio (defined as your total liabilities/total asset)? Is it higher than 50%? These are some of the ratios you can use (there are of course more). What I mean is that if you are too much heavy laden with debt, you might want to pay down your debts even if it does not make investment sense because if you are financially unhealthy, your ability to invest drops. Things get even more complicated when you overlay your financial decisions with your relationship with money, your history with money. One way to look at this is, what is your feelings about debt? Do you feel comfortable? does having debt make you worried and cause you to lose sleep. Does it go against your values? Do you have a situation in your life or in your family life that debt was a major cause of a family breakdown? You get my drfit. Sometimes, there are things in life that cannot be explained away by investment and financial principles. My conviction is that money is not a goal, It is an enabler. As such, even though following solid investment/financial planning principles make sense logically, but if it does not make you comfotable, if it goes against your value system. If it causes you to lose your health, then perhaps you need to reconsider how to better balance your decisions. It is about managing the tension between investments, financial planning and your relationship with money. I hope this helps.
  • Asked by Sau Yee Fong

    Christopher Tan
    Christopher Tan

    Top Contributor (Jan)

    48 Answers, 93 Upvotes
    Answered 2w ago
    Hi Yee Fong, thank you so much for your question. So sorry it came so late as I had a busy 2 weeks. It is an interesting question that you have asked. There are possibly a few reasons why CPF Board first take our monies from CPF SA to form the FRS first. 1. First of all, we need to understand that the primary purpose of CPF is to help us retire. When deciding on CPF policies, CPF Board often focus on the lower income group and not the wealthier ones. Therefore, when one reaches age 55, because CPF is mainly for retirement, our monies from SA (which is meant for retirement and attracting a higher interest rate) is first transferred to the RA to form the FRS. If it is insufficient, then CPF Board will take from OA. 2. For a near risk-free "instrument" like CPF (risk-free in a sense that it is default-free, free from volatility risk and also guranteed interest rates), 4% p.a. is considered very high and it is not easy to fulfill this obligation. By allowing the transfer to happen first from OA and then SA, there is a possibility that you have now "more money" attracting a higher 4% p.a. This is just my opinion. 3. By allowing one to first use the OA to form the FRS, we are likely to benefit the higher income group. This is not the intent of our CPF Schemes. I have heard of advisers asking their clients to invest their SA just before age 55 so that the FRS is formed by taking monies from their OA first. After 55, thei sell away their investments and the monies are then transferred back to the SA. While this is a loophole and seemingly a viable option, depending on what one invest in, one must be preapred to lose capital after the divestment. Hope this helps!
  • Asked by Anonymous

    Luke Ho
    Luke Ho, Money Maverick at Money Maverick
    153 Answers, 256 Upvotes
    Answered 2w ago
    If you're the safe type, it's better to keep making those contributions. You can also consider a private retirement plan, where you can customize when you want to get paid, how much you want to get paid and the rest without CPF changing the terms and conditions every time. https://www.moneymaverickofficial.com/posts/are-n-t-all-private-retirement-plans-terrible If you want more money, you should just invest it in a diversified portfolio aiming to make between 6 and 9% annualized net of fees, compared to the paltry amount that CPF is giving. I'm self employed, so I don't get CPF either and this strategy is working extremely well for me and will continue to do so. You can drop me a message either way, and I'll design something specifically tailored for your preference that makes you happier and wealthier. https://www.facebook.com/luke.ho.54
  • Asked by Anonymous

    Loh Tat Tian
    Loh Tat Tian, Ex-Financial Advisor, Founder at Singapore Insurance Value Finding

    Top Contributor (Jan)

    228 Answers, 327 Upvotes
    Answered 3w ago
    I second Yixiong suggestion. It's best to have $60,000 combined CPF for the 5% interest (the additional 1% goes into your SA). Other than that, it really depends on your investment appetite, whether you are savvy in investment or you wish to gain the guaranteed 4% from SA / MA (special and medisave account) And the Tax Relief for some of the following: 1) Voluntary contribution (for self-employed, tax relief) 2) Retirement Sum top up of 7k max (for money not above Full retirement sum (FRS).) Do Consider index investing (though always invest in what you know to minimise risk).
  • Asked by Anonymous

    Jacob Chong
    Jacob Chong, Executive Financial Advisor at PIAS
    11 Answers, 20 Upvotes
    Answered 3w ago
    No 1. on the list is do check with the banks and see if the loan quatum is the amount that they are willing to take. No 2. If i am not wrong there isnt many FD linked rates now. OCBC, UOB and Maybank have taken that down. No. 3. Dont take Sibor if you are someone who is worried about interest movement. 3months SIBOR has you to jump out of bed every 3 month because the rate changes and in current climax definetly not SIBOR. Leaving you with Fixed and Variable rates. Fixed Rates across all banks are about 2.3- 2.48 some higher. For that minimal saving of 0.2% off from HDB loan rates why bother. Variable are different across all banks. Some have Mortage Rate with a markup (ie. MR+0.75= 2.25 therefore you MR is 1.5 ), Some uses preferred rate (currently about 5.5%) then gives you a discount (Ie Preferred Rate -3% = 2.5%). Ranging about 2.18- 2.3 there about so there is still risk in the interest rate movement ya... Above are some of the examples and rates that I have gotten for my clients. Not for actual reference or quotation I hope what i mentioned will help you. CHeers
See more questions

Download Seedly’s free

Expense Tracking App
Download on the App StoreGet it on Google Play
  • Sync all your banks in one place
    Sync all your banks in one place
  • Quickly add transactions and view reports
    Quickly add transactions and view reports
  • Community Q&A and blog integration
    Community Q&A and blog integration