CPF Top up questions

[SBC]

Trust that the CPF top up for this year will be a record high.

 

[henrylbh]

It will almost certainly be called, so I'm seeing a YTW of 2.2%...

If called, the yield is about what I am getting from esaver or issavy promotion.

If not called, it will be better than yield from CPF SA/RA.

I think it will not be called unless the bank is issuing new securities to replace this perpetual securities. Else the bank's CAR is will a little affected.

I noted that those under placement are trading at 109.xx while I bought between 102.77 and 102.80.

 

[JetStorm]

For someone with a current hdb loan using cpf to pay... Does it make sense to keep 20k in oa to keep as loan buffer and earn that extra 1% while dumping the rest to SA? Assuming FRS not hit yet.

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[Thoreldan]

For someone with a current hdb loan using cpf to pay... Does it make sense to keep 20k in oa to keep as loan buffer and earn that extra 1% while dumping the rest to SA? Assuming FRS not hit yet.

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I would keep a buffer but more for an unfortunate job loss, that you can continue to service the loan.

How much the buffer depends on your monthly payment amt + how long u expected to be out of job if it hits.

Anything extras goes to sa if not already at frs

 

[terence2112]

For someone with a current hdb loan using cpf to pay... Does it make sense to keep 20k in oa to keep as loan buffer and earn that extra 1% while dumping the rest to SA? Assuming FRS not hit yet.

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I buffer 5k in my OA, while the rest i transfer to SA in an attempt to reach the FRS asap. Just transferred 35k from OA to SA though.

 

[JetStorm]

I would keep a buffer but more for an unfortunate job loss, that you can continue to service the loan.

How much the buffer depends on your monthly payment amt + how long u expected to be out of job if it hits.

Anything extras goes to sa if not already at frs

Thanks for the feedback and insights. Maybe will keep 30k in OA then.

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[dork32]

For someone with a current hdb loan using cpf to pay... Does it make sense to keep 20k in oa to keep as loan buffer and earn that extra 1% while dumping the rest to SA? Assuming FRS not hit yet.

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you will earn that extra 1% regardless you dumping your oa into the sa or not

 

[Thoreldan]

Thanks for the feedback and insights. Maybe will keep 30k in OA then.

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Care to share how much is your monthly mortgage ?

 

[Ang Moh Dua Ki]

Trust that the CPF top up for this year will be a record high.

Yes, and I also believe (speculate) that CPF interest rates will inevitably fall in the future. It would be disappointing but not unsurprising.

 

[crimsontactics]

Yes, and I also believe (speculate) that CPF interest rates will inevitably fall in the future. It would be disappointing but not unsurprising.

Yeap. SG is known for low i/r.

But can be a good thing as it means lower i/r for other purchases.

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[JetStorm]

you will earn that extra 1% regardless you dumping your oa into the sa or not

Erm... I tot the extra 1% comes from oa 20k? If my oa kosong how?

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[JetStorm]

Care to share how much is your monthly mortgage ?

Abt 1.6k. me and wife hdb loan payment ratio is abt 60/40 every month
Left abt 280k loan left for another 19 years

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[Okenba]

Erm... I tot the extra 1% comes from oa 20k? If my oa kosong how?

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1% extra on 60k, of which up to 20k can be from OA.

If OA 20k, SA 40k, all get extra 1%
If OA 40k, SA 20k, only 20k from OA and 20k from SA get extra 1%

 

[dork32]

If OA 20k, SA 40k, all get extra 1%
If OA 40k, SA 20k, only 20k from OA and 20k from SA get extra 1%

If OA 0, SA 60k, all get extra 1%

 

[dork32]

Erm... I tot the extra 1% comes from oa 20k? If my oa kosong how?

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i dont blame you. cpf is really poor at explaining.

 

[JetStorm]

If OA 0, SA 60k, all get extra 1%

Thanks for the clarification. 60k in sa sounds attractive but not possible since i need money in oa for my housing loan... Slowly accumulate my sa then.

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[BBCWatcher]

60k in sa sounds attractive but not possible since i need money in oa for my housing loan... Slowly accumulate my sa then.

Many people get to S$60K fairly quickly, in due course, through a combination of compulsory contributions, OA to SA transfers (of OA dollars above/beyond their mortgage servicing buffer), SA top ups with tax relief, and annually compounded interest (including bonus interest). It is fairly important to max out your bonus interest opportunity as soon as reasonably practical since double tax advantaged 5% interest compounded annually is quite attractive, especially nowadays.

Please note that MediSave Account dollars count fully toward attaining and maintaining maximum bonus interest. You can top up your MediSave Account with tax relief as long as your top up fits within both the CPF Annual Limit and Basic Healthcare Sum. Of course MediSave dollars can be useful at any age since you can use them to pay for qualified medical expenses in Singapore, including MediShield Life and base Integrated Shield plan premiums. And not just for yourself but also for your loved ones. In other words, it's fair to count these dollars as part of your extended family's "medical reserve buffer," to a reasonable degree anyway. Starting this year (2020) it's now possible, on your own, to qualify for maximum bonus interest solely with MediSave dollars since the Basic Healthcare Sum has reached $60,000 in 2020.

As one other point, "don't forget about your spouse/partner." Even if you qualify for maximum bonus interest, perhaps your spouse/partner doesn't. Fix that as soon as practical.

 

[JetStorm]

Many people get to S$60K fairly quickly, in due course, through a combination of compulsory contributions, OA to SA transfers (of OA dollars above/beyond their mortgage servicing buffer), SA top ups with tax relief, and annually compounded interest (including bonus interest). It is fairly important to max out your bonus interest opportunity as soon as reasonably practical since double tax advantaged 5% interest compounded annually is quite attractive, especially nowadays.

Please note that MediSave Account dollars count fully toward attaining and maintaining maximum bonus interest. You can top up your MediSave Account with tax relief as long as your top up fits within both the CPF Annual Limit and Basic Healthcare Sum. Of course MediSave dollars can be useful at any age since you can use them to pay for qualified medical expenses in Singapore, including MediShield Life and base Integrated Shield plan premiums. And not just for yourself but also for your loved ones. In other words, it's fair to count these dollars as part of your extended family's "medical reserve buffer," to a reasonable degree anyway. Starting this year (2020) it's now possible, on your own, to qualify for maximum bonus interest solely with MediSave dollars since the Basic Healthcare Sum has reached $60,000 in 2020.

As one other point, "don't forget about your spouse/partner." Even if you qualify for maximum bonus interest, perhaps your spouse/partner doesn't. Fix that as soon as practical.

I do understand where u are coming from... However, my view is that i will not dump cash to my cpf coz it may be a potential black hole.

Cpf life with ers sounds great but i am content to just let the sa current balance work itself while i try to optimize the extra 1% while i pay off my hdb loan and also build up my 3 fund portfolio

If i take cpf to be my bond portion, i will be seriously lacking in the equity portion which the bulk of my cash will be going to.

If i want to reduce my tax, there is always topping up to srs for local equities etf.

I dont want to mix more investment talk in this cpf thread so i shall not go on further but thank you BBCW for the detailed recommendation.

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[fr33d0m]

I do understand where u are coming from... However, my view is that i will not dump cash to my cpf coz it may be a potential black hole.

Cpf life with ers sounds great but i am content to just let the sa current balance work itself while i try to optimize the extra 1% while i pay off my hdb loan and also build up my 3 fund portfolio

If i take cpf to be my bond portion, i will be seriously lacking in the equity portion which the bulk of my cash will be going to.

If i want to reduce my tax, there is always topping up to srs for local equities etf.

I dont want to mix more investment talk in this cpf thread so i shall not go on further but thank you BBCW for the detailed recommendation.

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I am always amazed by the logic of some people.

SRS has higher risk and lower yield than CPF and similar lock on fund as CPF, yet people feel safer to put money into SRS.

I challenge anyone with at least a degree to tell me why CPF is a blackhole with valid reasons. Why can't Singapore government pay for CPF? The government has more than enough...

 

[crimsontactics]

I am always amazed by the logic of some people.

SRS has higher risk and lower yield than CPF and similar lock on fund as CPF, yet people feel safer to put money into SRS.

I challenge anyone with at least a degree to tell me why CPF is a blackhole with valid reasons. Why can't Singapore government pay for CPF? The government has more than enough...

Becos many ppl think the FRS cannot be withdrawn at 55 without also considering the fact that there will be a monthly payout from 65 no matter how little RA there is.

Also CPF is more sustainable than Social Security or Pension as the Gov only have to pay what you have in the account rather than a minimum amount each month.

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