Thats the only feasible option to explore in order to opt out CPFL what other than renounce citizenship.You can only see "One Route To Rome!"
Meaning u would rather give up small tree for a forest?
I was replying to post #633. You are digressing too far.
What rubbish lifetime payout is that? 3.15% is not guaranteed. Even if 3.15% is guaranteed, you are receiving less than the annual interest for life with terminal payout comprising of non-guaranteed sum. Definitely inferior to CPFL whichever plan. Definitely not acceptable as a substitute for CPFL.
But in this low interest in Bank environment, assuming one is above 55 and hit FRS already, why shouldnt one explore doing VHR leh? Whats the logic on the no practical meaning part? Dont mind can share to enlighten?
First of all, there are other ways to increase your CPF savings besides a voluntary housing refund. If at least one of those other ways works, do that first. For example, if you’re age 55+, have reached at least the Full Retirement Sum in your RA (or at least the Basic Retirement Sum with property pledge/charge), and your MA is at the Basic Healthcare Sum, an “all 3 account” voluntary contribution (“VC3A”) will all land in your OA. Practically everyone age 55+ currently has some room below the CPF Annual Limit to make a VC3A. There’s even tax relief potentially available if you’re self-employed. (And what’s wrong with RA and 4.0+% interest? Adding funds to RA doesn’t reduce existing RA lump sum withdrawal options if you should ever need them. Higher interest is higher interest, and higher income for life is higher income for life. Weird that some seem allergic to higher interest, higher retirement income, and/or higher residuals.
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This is the part I dont get. What future opportunity are you talking about?First of all, there are other ways to increase your CPF savings besides a voluntary housing refund. If at least one of those other ways works, do that first. For example, if you’re age 55+, have reached at least the Full Retirement Sum in your RA (or at least the Basic Retirement Sum with property pledge/charge), and your MA is at the Basic Healthcare Sum, an “all 3 account” voluntary contribution (“VC3A”) will all land in your OA. Practically everyone age 55+ currently has some room below the CPF Annual Limit to make a VC3A. There’s even tax relief potentially available if you’re self-employed. (And what’s wrong with RA and 4.0+% interest? Adding funds to RA doesn’t reduce existing RA lump sum withdrawal options if you should ever need them. Higher interest is higher interest, and higher income for life is higher income for life. Weird that some seem allergic to higher interest, higher retirement income, and/or higher residuals.
If you‘re going to keep dollars in OA for a nontrivial period of time earning 2.5% p.a. interest, a voluntary housing refund may make sense. If you aren’t (as with the poster upthread) — if you’re just going to repay OA then quickly pull some or all of it right back out to save/invest/spend elsewhere — a voluntary housing refund doesn’t make any sense at all. All you’d be doing is reducing or destroying your future opportunity to deposit dollars in OA with no upside benefit.
Why would you reduce or eliminate the future choices you have unless there’s some benefit in doing so? If you’re age 55+ and have met the Full Retirement Sum (or Basic Retirement Sum with property pledge/charge), there’s no benefit in repaying OA if you don’t keep funds in OA for some meaningful period of time. All you’re doing if you just repay then quickly withdraw is reducing your future deposit option(s).
Maybe then it makes sense. You look first at whether a 2.5% interest earning account is more attractive than other options. If it is, then you look at whether there’s a better way to get funds into OA.
Sure, but repaying OA dollars used for housing isn’t necessarily the only way to get dollars into OA. If as a notable example you’re self-employed and can get dollars into OA with tax relief, that’s far better.
Thats why i been saying the CPF 4% may not be sustainable in future with our aging population.
CPF's 4.0% "floor" interest rate for RA/SA/MA (and bonus interest rate) is (are) not strictly guaranteed. But rates have been stable in practice, including through financial crises, ultra low market interest rate periods, and a global pandemic.
Central Provident Fund Act states a minimum of 2.5% interest p.a. To drop OA rate, they have to amend it.CPF's 4.0% "floor" interest rate for RA/SA/MA (and bonus interest rate) is (are) not strictly guaranteed. But rates have been stable in practice, including through financial crises, ultra low market interest rate periods, and a global pandemic.
It's hard to see how Singapore's well-known aging population will have much impact on CPF's interest rate schedule. The long-term ability to pay 4.0+% interest will really depend on how well GIC does over long periods of time. Although a substantial fraction of GIC's investment portfolio is centered in Singapore and thus potentially indirectly subject to unique demographic factors in Singapore, GIC invests globally. Moreover, having greater numbers of elderly Singaporeans isn't as much of a challenge if the country is open to immigration, attractive to immigrants, and offers viable pathways to citizenship.
Also, in a hypothetical future world when CPF interest rates must drop they don't necessarily have to drop for RA/SA/MA. They could drop only for OA, for example. There are a variety of ways to manage interest costs. And the government has done so already in several different ways.
In short, let's root for GIC's success.
Yes, that's correct.
Where do you keep your spare cash to get more than 2.5%?
Singapore Savings Bonds purchased in the fairly recent past, as one example. SSBs are reasonably liquid. The April 2025 SSB (available for purchase in March, 2025) had/has a higher interest rate across all years than CPF OA offers.
You have been saying the CPF 4% may not be sustainable ... how aging population will affect the rate?
