Child CPF SA account

[kellogs]

Hi Guys,

What do you thinnk about putting an amount to child CPF SA account?

Lets share your opinion.

Assuming the amount is not needed for anytime.

 

[henrylbh]

Unless you are writing off the amount and your child will also never need it till 65 or beyond, it's the most dumb idea.

 

[chienwei]

does children have cpf account?

Sent from Xiaomi REDMI NOTE 5 using GAGT

 

[Thoreldan]

Your child doesn't need your help for their retirement.

Tertiary education expenses would be something better

 

[romeo88]

You've stated very clearly the assumption - that's a good start.

Another assumption should be CPF rules are the way they are when your kids turn 55. Contributing to their SA is a good proposition, especially compared to buying endowment policies, with guaranteed return (usually 1%) no where near the 4-5% SA is offering. While there are other instruments that can generate greater than 4-5%, however, sustaining that kind of return for the entire same amount of money in question over the long-term is something people can only dream of.

If I'm going down the track, I'd make sure the incremental amount in their SA is able to get the additional 1% as well for as long as possible, which I did.

Hi Guys,

What do you thinnk about putting an amount to child CPF SA account?

Lets share your opinion.

Assuming the amount is not needed for anytime.

 

[loonglow]

There was a thread discussion this topic:
https://forums.hardwarezone.com.sg/money-mind-210/how-many-here-top-up-your-childrens-cpf-accounts-5560933.html

 

[yoongf]

Top up MA acct first, ideally the amt’s 4% int can cover the annual medishield premiums. MA acct can also used to cover family members.

After that, top up OA acct. this will help kid to get their first 5rm BTO when the time comes. The old concept of upgrading from 4rm to 5Rm is proving to be a costly exercise.

I see no point in preparing for kid retirement which is 50-60yrs away. But i guess we cant top up OA without some going to SA.

Just my opinion. We all hv different strategies.

 

[dork32]

would you put money in a 60-year fixed deposit even if the interest is 4% compounded annually?

 

[BBCWatcher]

After that, top up OA acct. this will help kid to get their first 5rm BTO when the time comes. The old concept of upgrading from 4rm to 5Rm is proving to be a costly exercise.

No, I disagree at least to the extent you're generalizing. The sort of family (and family wealth) that would even be thinking of topping up a child's Special Account isn't likely to find Ordinary Account deposits (2.5% interest, restricted funds, already well addressed from compulsory contributions) attractive enough. Besides, it's not possible to top up a child's OA in directed fashion. There's only an "all three" top up, and that's limited to $37,740 per year of inflow.

OA is really not all that interesting to genuinely well-to-do families.

 

[testerjp]

I find it hard to fathom that the cpf and pap will still exist for another 50 years.

 

[BBCWatcher]

I find it hard to fathom that the cpf and pap will still exist for another 50 years.

For the record, the Central Provident Fund (CPF) is a decade older than Singapore is as an independent nation (1955 v. 1965). The People's Action Party (PAP) is only a very few months older than CPF (1954 v. 1955), but the PAP had no governmental power when CPF was founded. The PAP didn't assume control until the general election of 1959.

Nearly 65 years (at this writing) is not particularly old for a political party. The Democratic Party in the United States is at least 191 years old, for example -- "at least" because there's a particularly strong historical argument it's really about 227 years old. As another example, the British Conservative Party is at least 185 years old.

 

[havetheveryfun]

I find it hard to fathom that the cpf and pap will still exist for another 50 years.

just go to favorite foreigners' gathering spots on weekends like Paya lebar, Penisular Plaza, Golden Mile and Lucky Plaza and you will not find it hard to fathom anymore.

Jollibee has now just opened a new branch at Woodlands and another Filipino brand Max's Restaurant is coming too, what do you think ?

 

[iamveryguailan]

If 175k is so insignificant to me (maybe I earn that amount on a hourly basis), I totally wouldn’t mind putting that into my newborn CPF as a small gift, on TOP of whatever trust fund, property, stocks and other assets I am preparing to will him or to gift him

 

[ocs_woodlands]

Hi Guys,

What do you thinnk about putting an amount to child CPF SA account?

Lets share your opinion.

Assuming the amount is not needed for anytime.

I have put in money into CPF for both my children. Both has money in MA. Noth have had their OA emptied into SA. I am aiming for up to 60k in their accounts each.

my only regret is that I started late for them. But hope to hit at least 30k at 21yo.

 

[Merg91]

And edmw kia believes this is called an 'invasion'.
Lol

just go to favorite foreigners' gathering spots on weekends like Paya lebar, Penisular Plaza, Golden Mile and Lucky Plaza and you will not find it hard to fathom anymore.

Jollibee has now just opened a new branch at Woodlands and another Filipino brand Max's Restaurant is coming too, what do you think ?

 

[Merg91]

I put $30k in my boy's SA.
I am okay.

 

[Anarchy]

Doesn’t make sense to me to put into Special Account for 70 years period. Not even for that 5%.

Before thinking of topping up child Special Account, its more important to reach FRS, SRS for both at 400k each and refund of CPF housing loan before thinking of contributing to child CPF. When we pass on, it’s their cash anyway.

All these above I will assume both parent is high earner else topping up child CPF again doesn’t make sense.

 

[BBCWatcher]

Doesn’t make sense to me to put into Special Account for 70 years period. Not even for that 5%.

It's not a 70 year lock. It's a maximum 55 year lock for a Singaporean newborn, under reasonable assumptions, specifically that these dollars will add to other, future dollars flowing into the SA.

I don't know too many parents who expect their children never to live beyond age 55. It's a bit silly to pretend that your children won't have their own retirement needs, with rare exceptions. (Many of those rare exceptions would still be SA supportable calamities, with hardship withdrawals.) If your children's retirements were financially secure from birth or youth, would that be a "problem"? I'd vote no.

Before thinking of topping up child Special Account, its more important to reach FRS, SRS for both at 400k each and refund of CPF housing loan before thinking of contributing to child CPF. When we pass on, it’s their cash anyway.

I disagree about the refund of a housing loan. The circumstances when you would do that are relatively narrow. (A good time to do that is just before age 55 if you could use more OA dollars to fund your Retirement Account, and assuming you're going to "shield" SA dollars.) Refunding your housing loan (plus accrued interest) is paying yourself back into a 2.5% interest bearing account. 2.5% interest isn't bad, but it's not 5% either.

All these above I will assume both parent is high earner else topping up child CPF again doesn’t make sense.

Actually there's a stronger case for topping up a child's CPF MA and/or SA among wealther/higher income parents. I'm not arguing that it's the best idea in general, but it's not a bad idea either.

 

[henrylbh]

It's not a 70 year lock. It's a maximum 55 year lock for a Singaporean newborn, under reasonable assumptions, specifically that these dollars will add to other, future dollars flowing into the SA.

55 is minimum, not maximum for newborn. Possibly 70 or more if child's SA does reach FRS by then

 

[henrylbh]

I put $30k in my boy's SA.
I am okay.

You and your wife have reached FRS in SA and BHS in MA and CPF annual limit? Otherwise, a dumb thing to top up