if the refund is done every quarter, then maybe not worth the effort. but if the refund is yearly refund, then we can gain that interest on the 37k that we pump in jan.
Yes you get my point! that 37k will generate above $1k interest as MA and SA will have 4%, while OA which is 2.5%, all 3 well above OCBC 360 or any other bank's promo rates
I have asked CPF board about this, and elnewbie is right. You get no interest whatsoever from the amount topped up. The interest is only calculated after they refund your excess VC at the end of the year, using the minimum monthly balances (except in case of OA -> SA transfer I think).
Actually I disagree.
With VC, some of your money is place into MA.
This is something I don't like as you can't withdraw MA for retirement.
I prefer to focus my attention on RSTU to hit FRS, then use VC on all 3 accounts to increase my SA.
I will let MA increase naturally.
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I think that's the wrong approach. IF your MA can already reach BHS naturally, you should always choose to do VC-MA first before RSTU and normal VC. It has the tax advantage of RSTU without the same restrictions in the long run.
For my own money, I count year by year...
For FRS, I assume 3% inflation. Using P(1.03^30) where P = 166k
You forgot to account for your salary till the retirement age?
Jus finished readingthis thread but there may still be things im unclear
Im alrdy doing the oa>sa every year
Should i also start doing cash top ups?
30 this year mthly salary is high 5
If you are transfering all your OA to SA, do it monthly. If you are doing partial transfer, transfer 1 year worth in January. Top ups are a subjective matter. You need to provide more context.
To be frank, by the time your SA balance hits FRS, your salary would have probably reached a level where you are no longer eligible to do VC. Unless you're those buay kan types at work.
I expect my SA to hit FRS at 32/33 (this is not a big deal as I do OA->SA transfers, I am already slower than others that do this), and while my salary probably would hit the 6k limit, my company will never give a 5 months bonus. I don't consider myself to be buay kan at work.
