CPF Accounts Value Thread 2020

[Tiger9119]

Yeah u are right. Interest is a powerful thing
Just run thru financial calculator. Assuming u earn 6k per month at 25 and ignoring all spill over from MA and 1% on first 60k

At age 35, $53,009
At age 45, $140,873
At age 50, $203,830
At age 55, $294,622

Thanks. I was shocked with the figures u mentioned that I went ahead to compute. U are right..need to work more than 20yrs to reach frs

But you don't know what is the FRS amount when you reach 55. Currently, the increase is $5000 a year.

 

[highsulphur]

Yeah u are right. Interest is a powerful thing
Just run thru financial calculator. Assuming u earn 6k per month at 25 and ignoring all spill over from MA and 1% on first 60k
At age 35, $53,009
At age 45, $140,873
At age 50, $203,830
At age 55, $294,622
Thanks. I was shocked with the figures u mentioned that I went ahead to compute. U are right..need to work more than 20yrs to reach frs

By topping up SA and transferring OA to SA, you can have a sizeable SA by 45. Above ERS even

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[decibel.]

By topping up SA and transferring OA to SA, you can have a sizeable SA by 45. Above ERS even

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Yes this. At least you secure a retirement nest, and every cash ROI is like a bonus instead.

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[Kaypohji]

Yes... I’m estimating it to be 300k plus around 25 years later

But you don't know what is the FRS amount when you reach 55. Currently, the increase is $5000 a year.

 

[Tiger9119]

Yes... I’m estimating it to be 300k plus around 25 years later

In future, the increment may be more than $5000 as this amount may not be enough to offset inflation in 10, 20 or 30 yrs time. Fortunately, I don't have to worry about this.

 

[Kaypohji]

Do you mean you have other means to cover the inflation ?

In future, the increment may be more than $5000 as this amount may not be enough to offset inflation in 10, 20 or 30 yrs time. Fortunately, I don't have to worry about this.

 

[Tiger9119]

Do you mean you have other means to cover the inflation ?

My RA is already created. And the interest from my OA should be able or more than enough to cover the inflation.

 

[Kaypohji]

I see that’s good for u

I still have a long way to go

My RA is already created. And the interest from my OA should be able or more than enough to cover the inflation.

 

[crimsontactics]

In future, the increment may be more than $5000 as this amount may not be enough to offset inflation in 10, 20 or 30 yrs time. Fortunately, I don't have to worry about this.

Actually this year should have no increment as Gov predict 0% to -1% inflation...

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[pcmdan]

Actually this year should have no increment as Gov predict 0% to -1% inflation...

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Govt now is thinking of reducing the cpf contribution rates as well

 

[starlight318]

I expect FRS to be 280K when I turn 55 in 2034. Planning to retire early at 47-48 yo and if the cpf contribution rates and interest rates remain unchanged, I should have about 240k in OA and 130k in SA after setting aside 280k for RA and will be able to withdraw interest of about 1k per month without touching the capital.

Lower contribution rates or interest rates would directly impact my target FIRE age.

 

[madtari]

With such tiny amount you also dare to FIRE ah? Are you a BBFA with minimal expenses? I should be 1yr younger than you, by the time I'm 55, FRS should be around 290k. For comparison, at 55 my OA & SA ending balance inclusive of interest, after formation of RA should be 323k & 492k. This is assuming SA shield is still around and 250k from OA & 40k from SA is used for RA. I intend to continue working until end of re-employment age at 67. By then, my OA & SA amount should have around 600k & 800k. After 67, I can withdraw 46k per Yr without touching the capital. I don't really understand the need to FIRE if one is healthy and able to work. Why cut short your own greatest asset in cash generation?

BTW not sure how u derived at 280k SA and 130k SA after RA is formed. If you are using SA shield, why not shield everything?

I expect FRS to be 280K when I turn 55 in 2034. Planning to retire early at 47-48 yo and if the cpf contribution rates and interest rates remain unchanged, I should have about 240k in OA and 130k in SA after setting aside 280k for RA and will be able to withdraw interest of about 1k per month without touching the capital.

Lower contribution rates or interest rates would directly impact my target FIRE age.

 

[BBCWatcher]

Govt now is thinking of reducing the cpf contribution rates as well

The government probably is thinking about it, but the last time it happened (the Asian Financial Crisis) it didn’t work out so well since the government ended up with a citizenry that has more retirement income inadequacy to some extent.

There might be other ways to handle this, though. For example, how about allowing adult CPF members to borrow up to $6,000 from their CPF Ordinary Accounts in 2020? The amount borrowed must be repaid with interest, so it’s a 2.5% interest personal loan — the cheapest personal loan available in Singapore! IRAS can administer repayment via the income tax payment system, so you can either repay the loan next year in a lump sum with your tax bill or via GIRO installments stretched across the months. ($6,000 is equivalent to $500/month for 12 months.) Or how about allowing HDB leaseholders to borrow up to $12,000 of equity from their homes in 2020 via the HDB loan program, with repayment over 36 months at 2.6% interest? Repayment must be in cash, and assuming a $12,000 loan the monthly payment would be $346.86. The equivalent of HPS for this loan would be paid by the government, i.e. if a borrower dies the rest of the loan is forgiven (subject to a couple of anti-abuse caveats).

 

[madtari]

I guess the key is to be able to hit OW + AW ceiling early in your career. It helps a lot. I should be able to hit FRS with 15yrs of working (inclusive of 14k top up)...

I calculated need 18 years of working for me to reach FRS so you are not alone.

 

[maple96]

Govt now is thinking of reducing the cpf contribution rates as well

U are outdated! Someone suggested this in parliament, JT rejected it in parliament yesterday!

 

[highsulphur]

U are outdated! Someone raised in parliament, JT rejected it in parliament!

I agree with her on this. Personally I rather they don't any adjustments to CPF

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[zoneguard]

With such tiny amount you also dare to FIRE ah? Are you a BBFA with minimal expenses? I should be 1yr younger than you, by the time I'm 55, FRS should be around 290k. For comparison, at 55 my OA & SA ending balance inclusive of interest, after formation of RA should be 323k & 492k.

Congratulations to achieving CPF millionaire by 55 but don't need to belittle others with FIRE aspirations with lower CPF than you. You are also assuming starlight318 don't have other sources of wealth to support expenses.

 

[kehyi4]

Govt now is thinking of reducing the cpf contribution rates as well

https://www.channelnewsasia.com/news/singapore/cpf-contribution-rates-no-change-covid-19-economy-12802992
CPF contribution rates to stay the same despite COVID-19 economic downturn
Updated: 04 Jun 2020 02:10PM

SINGAPORE: The Government will not be lowering Central Provident Fund (CPF) contribution rates temporarily despite the economic fallout caused by the COVID-19 pandemic, Manpower Minister Josephine Teo said in Parliament on Thursday (Jun 4).

She was responding to Member of Parliament Seah Kian Peng’s question on whether the authorities will consider reducing CPF contributions by both employees and employers for the time being, until the economy recovers from the COVID-19 crisis.

Mrs Teo said that the Jobs Support Scheme (JSS) has helped to reduce the cost burden to employers “with fewer drawbacks” compared to if CPF contributions were to be trimmed.
...
Nonetheless, Mrs Teo said that the Government will monitor the situation and consider if CPF contributions need to be adjusted in future, along with other forms of support.
...
While she acknowledges that an interim cut to CPF contribution rates could help employers keep their workers, Mrs Teo said this could cause permanent losses to workers' ability to save for their retirement.

“Once that savings opportunity is forgone, it cannot easily be reclaimed and it usually takes a very long time to eventually restore whatever rates that have been cut,” she added.

The decision has to be taken “very carefully” in light of people living longer and managing healthcare expenditures.

Source: CNA/rp(gs)

 

[pcmdan]

U are outdated! Someone suggested this in parliament, JT rejected it in parliament yesterday!

Yup i know she rejected. But at least someone thought of it in Govt

Nonetheless, Mrs Teo said that the Government will monitor the situation and consider if CPF contributions need to be adjusted in future, along with other forms of support.

I stand correct in this

 

[madtari]

Hi, I'm not belittling him... Just that I really feel 1k is insufficient and in 15yrs time, the 1k is going to worth much less. You are right that I wrongly assumed he has to solely depends on CPF for retirement. Its my oversight.

Congratulations to achieving CPF millionaire by 55 but don't need to belittle others with FIRE aspirations with lower CPF than you. You are also assuming starlight318 don't have other sources of wealth to support expenses.