CPF Account Value Thread 2025

[Ahboy069]

I have a friend strategy is he is 45 now take housing loan for 20 years till 65…
As it is a freehold he will pledge his property at 55 to pay the balance of 10 years home loan (if necessary)
Then downgrade to smaller hdb
At least he saves on the loan interest part as it may take a while to sell the fh

 

[Shion]

Too little info to comment:
- Age?
- Salary? Got stable job?
- How much cash savings?
- Going to get married or own flat? How big the flat you thinking of?

Generally, not wise to transfer if need for housing (that's what the OA is mostly used for), but if you're cash rich, it's another story...

Early 30s. Stable job and stable salary. Overall cash savings can see the $100k mark.

I am still single, likely will remain so for a long time, if not, for eternity.

based on what I know of you, think you should

just keep enough for the time you need to paying for your BTO flat when you are closer to 40

I guess so. Likely single for life.

 

[Shion]

If you need OA as OA (for housing), a few points:

• You only need to converge to a target OA figure. For example, if you have $30K in OA, need $40K for your down payment 3 years (36 months) from now, and your compulsory OA contributions are $1K per month, you’ll have $66K (plus some interest) when you need your $40K down payment if you do nothing. You could transfer some OA dollars to your SA (and/or to a family member’s SA or RA) now without missing your OA target. And if you want to assume 6 months of unemployment within those 36 months and keep a 9 month mortgage buffer thereafter (see below), OK, but that still probably means you’ll overshoot if you do nothing.
• The CPF Investment Scheme (OA) is also a potential option for some dollars. Many people feel like they want to keep some OA dollars around just in case they have some mortgage payments to make during a period of unemployment. But that doesn’t mean you need to drag ”too many” OA dollars along at 2.5%, currently a low rate. In many cases (not all, due to fees and badly timed maturities) even 6 month T-bills are yielding better. However, if you were to invest some dollars in (low cost, prudent) long-term investments and (for example) keep 9 months of mortgage payments behind in OA, that seems just fine to me, in many cases anyway. In the unlikely event you ever need an emergency 10th month you’ve got the long-term investments you can tap.
• If your mortgage is or will be the 2.6% HDB loan then you know your OA will always earn only 0.1 percentage points less. That is, you have much less interest rate risk. Take that risk factor into account in managing cash, OA, and long-term investments.
• Once your MA reaches the Basic Healthcare Sum and your SA reaches the Full Retirement Sum the portion of your compulsory contributions earmarked for MA will spill over into your OA. Take that factor into account, too.
• If you or your spouse/partner still haven’t maxed out CPF bonus interest then you’ve got an extra incentive to raise your (or his/her) MA or SA balance if you reasonably can.

Thanks for the information. Looks like will need to do quite a bit of calculation beforehand.

Oh, another thing: if you’re taking a HDB loan then you can’t keep more than $20,000 in your OA anyway. When you pick up the keys anything over $20,000 is swept into (your) leasehold equity. So in the example above if you’re going to end up with $66K (plus interest) for a $40K down payment, you can avoid that future sweep of thousands of OA dollars by moving some OA dollars into SA. And since you know that sweep is coming, why not move those particular OA dollars now? You’ll earn 36 months more of higher SA interest on those dollars, plus potentially bonus interest if you haven’t maxed that out yet.

Hmm...So the possible strategy here is to keep exactly what is required for the downpayment in OA, everything excess sweep to SA

 

[Shion]

Random question. I came across again this old thread - https://forums.hardwarezone.com.sg/threads/cpf-calculator.5589081/

Do you guys have any excel calculators or any other type of complex formula to calculate the estimated CPF interest on monthly balance, after accounting for any deductions or additions (on top of salary contrbution) into your balances during the month ?

 

[highsulphur]

Random question. I came across again this old thread - https://forums.hardwarezone.com.sg/threads/cpf-calculator.5589081/

Do you guys have any excel calculators or any other type of complex formula to calculate the estimated CPF interest on monthly balance, after accounting for any deductions or additions (on top of salary contrbution) into your balances during the month ?

Just take the monthly lowest balance and you get a rough estimate of the interest

 

[Lss]

Not helpful at all, you guys got to stop worrying about accrued interest.

It impacts cash on hand after the sale doesn't it?

 

[BBCWatcher]

Hmm...So the possible strategy here is to keep exactly what is required for the downpayment in OA, everything excess sweep to SA

Or converge to the down payment, plus a few or several months worth of HDB loan payments. But the latter cannot exceed $20,000. And if it makes sense to invest OA dollars (for higher returns than 2.5% p.a.) in something like a Singapore Government Security that matures before your down payment date, that also works.

It impacts cash on hand after the sale doesn't it?

Not if you're 55+ and have already met the Full Retirement Sum.

....But using cash before the sale to repay OA certainly impacts cash on hand, too! Especially if you're repaying OA dollars using cash that could be earning ~3.0% in T-bills right now, as an example.

 

[hwmook]

It impacts cash on hand after the sale doesn't it?

So you are telling people it's ok to die early because you are going to die eventually. Get the logic? Why pay back early if you care about cash on hand? If you don't care about liquidity or cash on hand then why are you worried about accured interest because you are not going to pay more to anybody but your own self. Further it doesn't matter after you meet FRS, it also doesn't matter because 99% will buy another property after selling away your property.

Just need to keep 1 thing in mind, get more returns than the mortgage interest with your cash and you will end up better. Accured interest is not something the government charge you but is trying to teach you the time value of money, you buy a 1M property in 2014 and sell it for 1,25M in 2024 doesn't mean you earn money, you didn't even break even. That is what accured interest is all about, telling the common people don't be naive, you could have done better by just leaving the money in CPF. Buy a house for own stay, just pump all your OA to pay for mortgage and invest your cash. If you don't know what to do with your cash, you can pay back to OA anytime. Today the money go out from your OA for mortgage repayment, today you can put it back with cash. Even until today, SSB is better than OA interest rate, you can put into SSB and top up OA 10 years later and still be better off. I cannot emphasize enough, do not throw away liquidity, think it over thoroughly and do the maths.

 

[hwmook]

So many kao peh when their SA got shut down and cannot earn that 4%

You go and invest your SA

Even with my hands tie by the strict CPFIA-SA rules, I also choose to go my way. Numbers don't lie, I just need to beat the 4% returns.

 

[8zaoyu]

Someone here doesn't understand peace of mind. There are times when things don't make sense mathematically but gives a sense of peace.

Peace is priceless. You might not get peace if you leverage.

Don't need to use math to counter.

There is more than 1 way to do things. Optimize returns is only 1 such method.

Well, last time, our peace of mind was paying off our 1st property, with the profit already paid off the 2nd property without Housing Protection Insurance! We asked at 55 yo, can save 1 million in CPF, was not accepted, regretted the SA not gotten out for side-line investments. Govt saw such group of investors, closed it now. Anyway, you all are mostly younger than 65/55/35 ? and I observe my younger colleagues are mostly PRs earning so high salary scales now.

 

[LWZ]

I am still single, likely will remain so for a long time, if not, for eternity.

I guess so. Likely single for life.

#foreveralone

after you get your keys to your BTO in your late 30s, can consider to rent out if you are fine living with parents and vice versa

assuming you will use OA to cover loan instalments, having that rental income means you can then transfer more from OA to SA

 

[8zaoyu]

So you are telling people it's ok to die early because you are going to die eventually. Get the logic? Why pay back early if you care about cash on hand? If you don't care about liquidity or cash on hand then why are you worried about accured interest because you are not going to pay more to anybody but your own self. Further it doesn't matter after you meet FRS, it also doesn't matter because 99% will buy another property after selling away your property.

Just need to keep 1 thing in mind, get more returns than the mortgage interest with your cash and you will end up better. Accured interest is not something the government charge you but is trying to teach you the time value of money, you buy a 1M property in 2014 and sell it for 1,25M in 2024 doesn't mean you earn money, you didn't even break even. That is what accured interest is all about, telling the common people don't be naive, you could have done better by just leaving the money in CPF. Buy a house for own stay, just pump all your OA to pay for mortgage and invest your cash. If you don't know what to do with your cash, you can pay back to OA anytime. Today the money go out from your OA for mortgage repayment, today you can put it back with cash. Even until today, SSB is better than OA interest rate, you can put into SSB and top up OA 10 years later and still be better off. I cannot emphasize enough, do not throw away liquidity, think it over thoroughly and do the maths.

I agree only about keeping your earnings either in FDs/dividend generating but if we are going for wars, of no use! Keep tmmr healthy and alive to work/ enjoy living under an affordable roofs most important! CPFB is old school liao if people starts to learn to buy SSB, Tbills, own medical insurance above company or group insurance. I not you may not agree to buy/pay insurance to take care of others not similar genes, risky lifestyles, etc

 

[Lss]

Or converge to the down payment, plus a few or several months worth of HDB loan payments. But the latter cannot exceed $20,000. And if it makes sense to invest OA dollars (for higher returns than 2.5% p.a.) in something like a Singapore Government Security that matures before your down payment date, that also works.

Not if you're 55+ and have already met the Full Retirement Sum.

....But using cash before the sale to repay OA certainly impacts cash on hand, too! Especially if you're repaying OA dollars using cash that could be earning ~3.0% in T-bills right now, as an example.

I'm at my first BTO and 40s so it would impact me right

 

[Lss]

So you are telling people it's ok to die early because you are going to die eventually. Get the logic? Why pay back early if you care about cash on hand? If you don't care about liquidity or cash on hand then why are you worried about accured interest because you are not going to pay more to anybody but your own self. Further it doesn't matter after you meet FRS, it also doesn't matter because 99% will buy another property after selling away your property.

Just need to keep 1 thing in mind, get more returns than the mortgage interest with your cash and you will end up better. Accured interest is not something the government charge you but is trying to teach you the time value of money, you buy a 1M property in 2014 and sell it for 1,25M in 2024 doesn't mean you earn money, you didn't even break even. That is what accured interest is all about, telling the common people don't be naive, you could have done better by just leaving the money in CPF. Buy a house for own stay, just pump all your OA to pay for mortgage and invest your cash. If you don't know what to do with your cash, you can pay back to OA anytime. Today the money go out from your OA for mortgage repayment, today you can put it back with cash. Even until today, SSB is better than OA interest rate, you can put into SSB and top up OA 10 years later and still be better off. I cannot emphasize enough, do not throw away liquidity, think it over thoroughly and do the maths.

Eh. I thought can only put back if you fully redeemed the loan?

 

[Mephist0pheLes]

As I have yet to buy a HDB flat, advisable to transfer OA to SA at this stage ?

set aside the downpayment if need to, transfer the rest. That's what i did before i bought my flat.

 

[sglandscape]

set aside the downpayment if need to, transfer the rest. That's what i did before i bought my flat.

Need to add, this only makes sense if you plan to "shield" and would be taking a hdb loan.

 

[sglandscape]

So you are telling people it's ok to die early because you are going to die eventually. Get the logic? Why pay back early if you care about cash on hand? If you don't care about liquidity or cash on hand then why are you worried about accured interest because you are not going to pay more to anybody but your own self. Further it doesn't matter after you meet FRS, it also doesn't matter because 99% will buy another property after selling away your property.

Just need to keep 1 thing in mind, get more returns than the mortgage interest with your cash and you will end up better. Accured interest is not something the government charge you but is trying to teach you the time value of money, you buy a 1M property in 2014 and sell it for 1,25M in 2024 doesn't mean you earn money, you didn't even break even. That is what accured interest is all about, telling the common people don't be naive, you could have done better by just leaving the money in CPF. Buy a house for own stay, just pump all your OA to pay for mortgage and invest your cash. If you don't know what to do with your cash, you can pay back to OA anytime. Today the money go out from your OA for mortgage repayment, today you can put it back with cash. Even until today, SSB is better than OA interest rate, you can put into SSB and top up OA 10 years later and still be better off. I cannot emphasize enough, do not throw away liquidity, think it over thoroughly and do the maths.

If only everyone was as rational as you this is correct in assessing the trade off and the pros and cons.

Using OA to pay for a house, even partly often makes sense even if the mortgage rate is slightly less than 2.5% because it gives you cash liquidity.

Accrued interest if often not relevant a consideration unless you're planning to cash out from the property and downsize close to retirement, and have not met the FRS. Otherwise, it's just a temporal funding shortfall.

 

[Mephist0pheLes]

Need to add, this only makes sense if you plan to "shield" and would be taking a hdb loan.

dont get what u mean. based on his post, i tot he want to transfer OA to SA eventually, jus not sure if he want to do it now.

shielding to protect his OA from being wipe out by hdb is a different question. if he want to shield and use OA for other purposes like investing, then he sldnt even be considering to transfer to SA.

 

[boringLife-]

Slightly off topic. But if I quit my job 1 or 2 months before 35 year old, will I still be eligible for singles scheme BTO at standard priority, or high chance won't get allocate. If I continue working, my salary by 35 probably above 7k then cannot apply liao. I don't mind quit my job just to get a bto. Can treat it as a break also

Once successful liao then go find a new job

 

[hwmook]

Eh. I thought can only put back if you fully redeemed the loan?

You can do CPF housing refund anytime, it's really anytime. The amount you withdraw including accured interest is shown to you and you can choose to use cash to make the refund anytime you like. Paynow and it will reflect immediately. I have done it a number of times before while changing house, even the legal assistant doesn't know and was surprised when I mentioned I will do the refund and get it to the amount needed for my property purchase.