CPF Accounts Value Thread 2020

[BBCWatcher]

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.

Yes, and that’s exactly what happened when contribution rates were cut during the Asian Financial Crisis.

Also bear in mind that a lot of people are seeing lower wages and lower or zero bonuses. That too is reducing their CPF inflows. So a contribution rate cut on top of wage and bonus cuts really whacks workers’ CPF balances.

“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.

A very long time is never, quite often.

However, I think it’d be OK to allow small personal loans from CPF OA and/or HDB leasehold equity. If we’re going to borrow from our future selves, that seems like a more sensible way to do it (2.5%/2.6%) versus 6.4+% personal loans and 20+% credit card debt.

 

[RedsYWNA]

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.

CPF inadequacy is a failure on MOM's part, and is again, a reflection of Josephine Teo's capability.

Despite a high-level committee's recommendations, we still dont have a gd, low cost passive globally diversified fund to invest excess CPF OA money. That's why people like me are considering letting Endowus earn 0.4% for my CPF OA.

NTUC Fairprice is earning good money from Covid-19, so its quite shocking to hear a suggestion on cutting CPF from Sean Kian Peng's mouth. Somemore, their property tax/rent rebates and JSS support must be huge.

 

[starlight318]

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.

280k SA is just based on estimation of 3.5% increase per annum. I have my reasons for wanting to FIRE and yes of course I have other sources of income. 1K from cpf interest is only one of my passive income streams. Yes you are right I'm single bbfa with a fully paid Hdb. I'm not including the SA shield because it may not be around by the time I'm 55, the govt may close this loophole. Of course if I were to work till 55 or even 67, I will have a much bigger pot in cpf but in my view, there's no point accumulating too much if one already has enough.

 

[hwmook]

CPF inadequacy is a failure on MOM's part, and is again, a reflection of Josephine Teo's capability.

Despite a high-level committee's recommendations, we still dont have a gd, low cost passive globally diversified fund to invest excess CPF OA money. That's why people like me are considering letting Endowus earn 0.4% for my CPF OA.

NTUC Fairprice is earning good money from Covid-19, so its quite shocking to hear a suggestion on cutting CPF from Sean Kian Peng's mouth. Somemore, their property tax/rent rebates and JSS support must be huge.

Greed known no limits. The support package is already doing the same thing, no need to cut CPF and affect everybody.

 

[BBCWatcher]

NTUC Fairprice is earning good money from Covid-19, so its quite shocking to hear a suggestion on cutting CPF from Sean Kian Peng's mouth. Somemore, their property tax/rent rebates and JSS support must be huge.

A question in Parliament doesn’t require belief in the question’s premise. It’s quite common for parties in government to use their parliamentary time to explain their policy decisions in this way....

And I happen to agree with the answer, that it’s not a good idea for Singaporean workers to endure more financial difficulty in retirement (which is already often quite difficult) to solve today’s household financial problems. I’ve suggested a couple other ideas that could help, and I think they’re at least better.

On edit: It might even be fine to allow OA balances to go negative to some degree with “COVID-19 OA loans” at 2.5%. I’d have to think through the full ramifications of a negative OA balance, but in principle it seems OK, and it’d broaden availability and avoid penalizing those who transferred OA to SA/RA, which seems like a good idea, too. It’s certainly better than 6.4+% personal loans, 20+% credit card debt, and loan sharks.

 

[hwmook]

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?

You are depending on CPF to retire? If you have enough then why continue to work? You need to bring the money into your coffin?

 

[Gitaro]

Show your CPF Accounts Value.

No picture, no talk.

Here. GPGT. Finally reached the milestone.

https://postimg.cc/7JSnysJ1

 

[highsulphur]

Here. GPGT. Finally reached the milestone.

https://postimg.cc/7JSnysJ1

Gxgx how old are you?

 

[Gitaro]

Gxgx how old are you?

I got RA set up already, hence, I am >55.

I paid back my housing amount + accrued interests.

 

[BBCWatcher]

OK, someone has to ask: why is your Retirement Account so low?

 

[Prof. Utonium]

Recently just flushed my OA to SA again. Stopped for nearly 2 years after rationalizing that it should be deemed enough to hit the FRS in 27 years time. Provided contribution rate, salary and interest rate do not have any changes.

But since, I do not see myself buying a house within the next 5 years, I thought it was pointless keeping it in OA.

Seeking inputs, how much would be need in OA to purchase a HDB with 25 years mortgage repayment?

Assuming HDB cost price of $300-500k and 10% down payment, I would need $30-$50k. Would it be feasible, if I only let my OA accumulate once I planned to purchase a HDB? Let's say $10k/year contribution so I will need 3-5 years. Or is it too risky?

I got RA set up already, hence, I am >55.

I paid back my housing amount + accrued interests.

Awesome. Did you do any voluntary top ups, transfer or used it to invest in funds? Or this is purely from normal contributions?

 

[Gitaro]

I got RA set up already, hence, I am >55.

I paid back my housing amount + accrued interests.

OK, someone has to ask: why is your Retirement Account so low?

I go for FRS only.

 

[Gitaro]

Recently just flushed my OA to SA again. Stopped for nearly 2 years after rationalizing that it should be deemed enough to hit the FRS in 27 years time. Provided contribution rate, salary and interest rate do not have any changes.

But since, I do not see myself buying a house within the next 5 years, I thought it was pointless keeping it in OA.

Seeking inputs, how much would be need in OA to purchase a HDB with 25 years mortgage repayment?

Assuming HDB cost price of $300-500k and 10% down payment, I would need $30-$50k. Would it be feasible, if I only let my OA accumulate once I planned to purchase a HDB? Let's say $10k/year contribution so I will need 3-5 years. Or is it too risky?


Awesome. Did you do any voluntary top ups, transfer or used it to invest in funds? Or this is purely from normal contributions?

Normal contribution. Recent years repaid back to my own account via housing refund using money liquidated from other investments. Wanna just earn 2.5% risk free for this amount with other sums placed under more risky instruments.

 

[andyhtc]

Recently just flushed my OA to SA again. Stopped for nearly 2 years after rationalizing that it should be deemed enough to hit the FRS in 27 years time. Provided contribution rate, salary and interest rate do not have any changes.

But since, I do not see myself buying a house within the next 5 years, I thought it was pointless keeping it in OA.

Seeking inputs, how much would be need in OA to purchase a HDB with 25 years mortgage repayment?

Assuming HDB cost price of $300-500k and 10% down payment, I would need $30-$50k. Would it be feasible, if I only let my OA accumulate once I planned to purchase a HDB? Let's say $10k/year contribution so I will need 3-5 years. Or is it too risky?


Awesome. Did you do any voluntary top ups, transfer or used it to invest in funds? Or this is purely from normal contributions?

Nowadays BTO from application to getting the key could hit 8 years if your criteria is quite narrow (e.g. a certain location, floor level and facing), unless you are looking at resale HDB. Hence, it is better to lock down a BTO first rather than transferring from OA to SA. Moreover, my gut feel is HDB could start raising the price due to higher contractors' labour and land costs.

 

[andyhtc]

Here. GPGT. Finally reached the milestone.

https://postimg.cc/7JSnysJ1

Congratulations! This is the first time I see a 7-digit CPF account

 

[Okenba]

Recently just flushed my OA to SA again. Stopped for nearly 2 years after rationalizing that it should be deemed enough to hit the FRS in 27 years time. Provided contribution rate, salary and interest rate do not have any changes.

But since, I do not see myself buying a house within the next 5 years, I thought it was pointless keeping it in OA.

Seeking inputs, how much would be need in OA to purchase a HDB with 25 years mortgage repayment?

Assuming HDB cost price of $300-500k and 10% down payment, I would need $30-$50k. Would it be feasible, if I only let my OA accumulate once I planned to purchase a HDB? Let's say $10k/year contribution so I will need 3-5 years. Or is it too risky?

I see it this way. If you're getting one as a single, it's unlikely to be time sensitive so you can wait however long you need to build up the 10%.
If you're getting married, your spouse may have some set aside. Even if your spouse is like you, combined income means a shorter time to build up the 10%. So overall, I would not worry too much about it...
Of course this assumes you have a stable job and you're very sure you can build up your OA again quickly.

 

[BBCWatcher]

I go for FRS only.

You found 2.5% interest via OA repayment appealing -- even though you cannot tap as cash it without drawing down 4.0% interest earning SA first -- but not ~3.X% yielding RA? That's...interesting.

 

[Nesplex]

You found 2.5% interest via OA repayment appealing -- even though you cannot tap as cash it without drawing down 4.0% interest earning SA first -- but not ~3.X% yielding RA? That's...interesting.

Can explain why you said RA yield is ~3.X% instead of 4%?

 

[Prof. Utonium]

Nowadays BTO from application to getting the key could hit 8 years if your criteria is quite narrow (e.g. a certain location, floor level and facing), unless you are looking at resale HDB. Hence, it is better to lock down a BTO first rather than transferring from OA to SA. Moreover, my gut feel is HDB could start raising the price due to higher contractors' labour and land costs.

Frankly, I wish I can get a BTO now but not yet eligible. In the event I am still single at 35 and not married, I would have to apply a resale flat with my relative under Joint Single Scheme. Singles are only allowed 2 room BTO which would be too small for me and my older relative. In this case, burden of mortgage would be under me, hence I will have to build up my OA more to lessen the monthly repayments.

On an another note, my peers have been applying for resale flats. They seem to have given up on BTO application. Just like you mentioned, the process is so long that it will just push back their family planning. With covid, costs are increasing so I am expecting the costs to be reflected in the sales price in the near future. Damn. Guess I should start accumulating my OA in 2022 to ensure more buffer.

I see it this way. If you're getting one as a single, it's unlikely to be time sensitive so you can wait however long you need to build up the 10%.
If you're getting married, your spouse may have some set aside. Even if your spouse is like you, combined income means a shorter time to build up the 10%. So overall, I would not worry too much about it...
Of course this assumes you have a stable job and you're very sure you can build up your OA again quickly.

Ditto. More assuring that way.

Just did a recalculation. Since I am not exactly time sensitive and single, if I continue transferring my OA to SA till end of 2021, should hit $405k which is more than my estimated FRS of $390K at 55 (3% increase PA). I think I would have to take this risks in the younger age to ensure my retirement days are assured.

 

[dork32]

Congratulations! This is the first time I see a 7-digit CPF account

you have not been here long enuf. our resident cpf millionaire is skenny. he has 1 mil in the oa. unfortunately some stupid mod go and ban him