CPF SA

[iceblendedchoc]

i also mentioned this before. this is a very valid point.

but we are tokking up topping up. if you top up sa or ma, after a few years, you will realized both accounts will have the same amount of money, regardless of the options chosen.

Yup they have the same amount when they are both due to the interest rate for sa and oa. Although I like the cpf scheme, I would still like to leave as little money in it at 55 unless I cannot find anything better to park the withdrawal amount. For me MA is something I won’t be able to take out and say book a $60k tour package. (Can certainly use for Hospital stay though)

 

[Andrew833]

To me got difference. Balance of SA can still withdraw after meeting FRS at 55 But MA can only bequests after you died

"But MA can only bequests after you died"
I disagree with this.
Nowadays, MA can be use for many medical sickness in polyclinic and hospital. If you live to 85-90, MA will have not much left. If serious illness, MA may be not enough.
Bequests should be coming from RA.

 

[dork32]

Of course you can do both, but I'm explaining the logic after you've decided you have at least one dollar available to put into CPF with tax relief, and you have a choice between MA and SA. Which should you prioritize? I lean a little bit in favor of MA for all the reasons I've described.

i alredy mentioned. no difference.

reddevil, why dont you quote your round plate and square plate example to him

 

[Andrew833]

Yup they have the same amount when they are both due to the interest rate for sa and oa. Although I like the cpf scheme, I would still like to leave as little money in it at 55 unless I cannot find anything better to park the withdrawal amount. For me MA is something I won’t be able to take out and say book a $60k tour package. (Can certainly use for Hospital stay though)

"Although I like the cpf scheme, I would still like to leave as little money in it at 55 unless I cannot find anything better to park the withdrawal amount. "

This is why saving in SA after 55, SA can be withdraw anytime. If you don't withdraw, the interest will compound.
This is what I planning to do.
OA can withdraw, spend on long holiday, keep the rest in any where you like.

 

[dork32]

Yup they have the same amount when they are both due to the interest rate for sa and oa. Although I like the cpf scheme, I would still like to leave as little money in it at 55 unless I cannot find anything better to park the withdrawal amount. For me MA is something I won’t be able to take out and say book a $60k tour package. (Can certainly use for Hospital stay though)

yes i agree with you. as to whether to keep your money in cpf or not, it is up to the individual.

i just want to add to your point that ma can be use for hospitalization. after 55, your sa can also be used for hospitalization if you have brs. your sa can be also used for holiday. your ma cannot

 

[dork32]

"Although I like the cpf scheme, I would still like to leave as little money in it at 55 unless I cannot find anything better to park the withdrawal amount. "

This is why saving in SA after 55, SA can be withdraw anytime. If you don't withdraw, the interest will compound.
This is what I planning to do.
OA can withdraw, spend on long holiday, keep the rest in any where you like.

you smart, garmen smarter. you want to withdraw your oa and keep your sa. you better know how to shield well.

 

[dork32]

OA can withdraw, spend on long holiday, keep the rest in any where you like.

keep where? it it is posb savings, then it is better off leaving it in the oa

 

[dork32]

"But MA can only bequests after you died"
I disagree with this.
Nowadays, MA can be use for many medical sickness in polyclinic and hospital. If you live to 85-90, MA will have not much left. If serious illness, MA may be not enough.
Bequests should be coming from RA.

if you are at 85, what is stopping your from using your sa to pay for your medical bills?

 

[Andrew833]

you smart, garmen smarter. you want to withdraw your oa and keep your sa. you better know how to shield well.

Yup, shield sa 1 mth before 55.
My oa got about 160k invested, this is the amt I aiming to take out
Then invest using cash

 

[Andrew833]

if you are at 85, what is stopping your from using your sa to pay for your medical bills?

SA is cash, can use when needed.

 

[dork32]

Yup, shield sa 1 mth before 55.
My oa got about 160k invested, this is the amt I aiming to take out
Then invest using cash

if you feel that your investments can give you more than 2.5% then it is a good choice to take it out from the oa at 55.

 

[dork32]

SA is cash, can use when needed.

which brings to the point that iceblend is saying: sa is better than ma after 55.

 

[Andrew833]

which brings to the point that iceblend is saying: sa is better than ma after 55.

What I mean is for "But MA can only bequests after you died"

If you just compare sa with ma, there is nothing to compare lol. The usage is different.

 

[Andrew833]

if you feel that your investments can give you more than 2.5% then it is a good choice to take it out from the oa at 55.

It's not hard to get 2.5%, the question is how much risk you can take.

 

[Thoreldan]

It's not hard to get 2.5%, the question is how much risk you can take.

Very true, at this age not many can take another drop like the recent 23 march.

 

[Andrew833]

Very true, at this age not many can take another drop like the recent 23 march.

Actually for long term investment, this drop is nothing. There are so many big drop over the years, every time after the drop, market will recover.
Just pull out a 10 years chart, you will understand better.

 

[polyglob]

It's not hard to get 2.5%, the question is how much risk you can take.

It has to be better than 2.5% per annum consistently year after year, otherwise might as well keep in CPF.

 

[peppermint7]

Actually for long term investment, this drop is nothing. There are so many big drop over the years, every time after the drop, market will recover.
Just pull out a 10 years chart, you will understand better.

Nowadays businesses are more volatile than ever! Just look at wirecard. One day 2 billion reported disappear. Next day bankrupt
Risk is very real. At times really not worth to take such risk

 

[Thoreldan]

Actually for long term investment, this drop is nothing. There are so many big drop over the years, every time after the drop, market will recover.
Just pull out a 10 years chart, you will understand better.

What i mean is 55 onwards and near retirement or already retired, you certainly want to move towards a more stable portfolio.

 

[Andrew833]

It has to be better than 2.5% per annum consistently year after year, otherwise might as well keep in CPF.

At 4% interest (SA/MA), it's take 20 years to double.
If you invest for long term say 20 years, if you can get near double, why not. Lower risk may take more years to double (still more than 2.5%).