Paying off CPF OA HDB loan near 55yo

[dpsk3000]

I am asking this on behalf of an old friend who used his CPF Ordinary Account (OA) to pay for his HDB flat. As he is reaching 55, he is wondering if it makes sense to pay off the entire HDB loan using his CPF OA. The reason he mentioned is that by 55, he can withdraw all the money from his CPF OA. Even if he doesn't withdraw it, the CPF OA provides a decent 2.5% return. Does this make sense?

 

[coyote]

I am asking this on behalf of an old friend who used his CPF Ordinary Account (OA) to pay for his HDB flat. As he is reaching 55, he is wondering if it makes sense to pay off the entire HDB loan using his CPF OA. The reason he mentioned is that by 55, he can withdraw all the money from his CPF OA. Even if he doesn't withdraw it, the CPF OA provides a decent 2.5% return. Does this make sense?

Thought there's no point in doing so unless your friend is taking loan from commercial bank at much higher interest.

 

[EDMW-Hates-Me]

Take loan as much as you can. Invest the money can get more than 2.6%. If you have enough in OA, pap doesn't even give you the option of taking CPF loan.

 

[dpsk3000]

Thought there's no point in doing so unless your friend is taking loan from commercial bank at much higher interest.

I think he mentioned that his HDB loan is fully paid off, and there is no remaining loan. He was saying that if he doesn't pay off the accrued interest, it will continue to accumulate after he turns 55 and retires. To clear the accrued interest, he is considering using cash at hand to settle the amount borrowed from his CPF OA and stop the interest from continuing to accrue into his retirement. Does that make sense?

 

[dpsk3000]

Take loan as much as you can. Invest the OA can get more than 2.6%. If you have enough in OA, pap doesn't even give you the option of taking CPF loan.

reaching 55, where he can take out all cpf after FRS.

 

[MoeLanYong]

Why you anyhowly call people nearing 55 old?

 

[celong27]

Am also in a dilemma whether to wipe out as much OA so possible and put in as much as possible cash to clear my hdb loan any one has any thoughts please? Thanks...

 

[celong27]

It's it possible to semi retire with fully paid hdb flat but with little to zero OA and around 60K SA? Am 43 currently

 

[eatingtunic]

1. Can manage cash, wont get kiap by mistress ? Keep cash !
2. Cannot manage cash ? Keep in cpf, reach 65 will get steady monthly cash flow.

 

[MoeLanYong]

CPF OA receive 2.5%
HDB loan pay 2.6%

Financially, how much difference can 0.1% be??

At most a few thousand. That's all. Need to huan lo?

I think it just boils down to individual preference. For me, I dun like to owe. I'd just pay off the loan.

 

[doratch]

It's it possible to semi retire with fully paid hdb flat but with little to zero OA and around 60K SA? Am 43 currently

Depends on your expenses.

You can rent out some rooms.

 

[eatingtunic]

Am also in a dilemma whether to wipe out as much OA so possible and put in as much as possible cash to clear my hdb loan any one has any thoughts please? Thanks...

Never use cash for hdb. Keep cash in bank & cut the atm card.
Let the cash sleep in bank, never invest in those ILP bullsheet.

 

[televisione]

Since he is reaching 55, there is little runway left... avoid investing in the US market or S&P500

 

[semiret]

I am asking this on behalf of an old friend who used his CPF Ordinary Account (OA) to pay for his HDB flat. As he is reaching 55, he is wondering if it makes sense to pay off the entire HDB loan using his CPF OA. The reason he mentioned is that by 55, he can withdraw all the money from his CPF OA. Even if he doesn't withdraw it, the CPF OA provides a decent 2.5% return. Does this make sense?

Am also in a dilemma whether to wipe out as much OA so possible and put in as much as possible cash to clear my hdb loan any one has any thoughts please? Thanks...

Use your CPF/cash to buy T-bills which give you more than 3.6% currently. If the yields drops below CPF interest rates then consider whether to pay off your loans. Just my thought.

 

[celong27]

If before 50 clear off hdb it's it really advisable cos my current unit is really not my ideal one 2005 unit but face main road that's the only problem

 

[EDMW-Hates-Me]

Use your CPF/cash to buy T-bills which give you more than 3.6% currently. If the yields drops below CPF interest rates then consider whether to pay off your loans. Just my thought.

Really bizarre why some people got the privilege to take CPF loan don't want to milk it gaogao. Some people play games to qualify. Some people want to play games also no games to play liao, only can suck thumb see HDB makan 6 digits away in one go.

 

[VTEC3100]

at 55, after deduct to RA, balance in cpf wd in cash.
use cash repay cpf for money loan on HDB n AI on cpf. this will end hdb loan n cpf AI.
after repay, money go back to cpf OA.
n already after 55, can wd out all cpf balance (except RA) as cash to oun bank acct.
remaining will be RA with cpf, cash in bank, n no more AI.
does this work?

 

[dpsk3000]

at 55, after deduct to RA, balance in cpf wd in cash.
use cash repay cpf for money loan on HDB n AI on cpf. this will end hdb loan n cpf AI.
after repay, money go back to cpf OA.
n already after 55, can wd out all cpf balance (except RA) as cash to oun bank acct.
remaining will be RA with cpf, cash in bank, n no more AI.
does this work?

that is what I am asking. after 55, the paid back cash in cpf oa can take all out again. isn't it correct way to stop the accrued interest?

 

[maikichai]

I think he mentioned that his HDB loan is fully paid off, and there is no remaining loan. He was saying that if he doesn't pay off the accrued interest, it will continue to accumulate after he turns 55 and retires. To clear the accrued interest, he is considering using cash at hand to settle the amount borrowed from his CPF OA and stop the interest from continuing to accrue into his retirement. Does that make sense?

If he intends to stay at his HDB and not sell, there is no need to pay off the interest ever. If he intends to sell in the future, then just pay off that time with the sales proceed. Keep the present cash to do other things and enjoy retirement. If the sales proceed does not cover the interest accured, there is no force you to pay it also (i think), so don't care lah.

 

[rizhal]

that is what I am asking. after 55, the paid back cash in cpf oa can take all out again. isn't it correct way to stop the accrued interest?

To be accurate, you can only withdraw any amount in excess of FRS amount (or in excess of BRS if pledged property)(or $5000 if cannot meet BRS) after 55.