Sorry for hijacking thread. I intend to transfer majority of my OA to SA this month and would like to check with the gurus here if I'm missing out on any considerations before doing so.
Current situation:
OA ~120k, SA ~50k, MA ~60k
Housing loan(starting on 2022) ~1.8k/mth repayment
Age: 29
If I have plans to sell my house after MOP, should I consider keeping funds in my OA for loan repayment?
That'll be in 2027 or later, presumably. It depends on what you expect to be doing after you sell your BTO in terms of replacement housing (which could be housing with about the same capex, higher capex, lower capex, or no capex), how much other wealth your household (and perhaps wider family including inlaws) have, and the contribution flows into CPF over the next 7+ years.
Is keeping ~20k in OA sufficient if I want to have enough to tide over 12 months of loan repayment in case of income loss?
Yes, that math is quite straightforward. Take your combined
household OA balances (your spouse counts too!), divide by your monthly mortgage payment, and you have the minimum number of months that your OA balances can service your mortgage at current interest rates.
What other considerations should I have to keep my OA balance up?
It seems like you've got the basics down. I would also point out that if your Special Account is bigger sooner, more of your future money is working harder, longer. That means you can slightly reduce your current non-CPF retirement savings flow and still arrive at the same desired retirement outcome....
....What, you're not saving and prudently investing for retirement beyond CPF (you might say)? OK, it'd probably be a good idea to fix that, but more dollars working harder, longer in SA means it's a little easier to fix.
The only point I would like to raise is the job security for you and your partner. If you are unsure, you can always transfer a lower amount and do regular transfers as and when your OA balance increases.
Yes, but factor into the equation the expected CPF inflows over the next couple years. The OA balance keeps increasing with every paycheck, and there's 2.5% interest credited every December 31st.
But take note SA account will be converted to RA when you reach age 55.
The 55th birthday creation and funding of the Retirement Account is:
1. A good thing, because that's what funds your future foundational lifetime retirement income (CPF LIFE). The better funded your RA, the higher your monthly retirement income will be.
2. Not peculiar to the Special Account. Dollars are drawn first from the Special Account but, if the Special Account is not sufficient to fund the RA to the then current Full Retirement Sum, dollars will be drawn from the Ordinary Account. (Special Account "shielding" is at least currently possible.)
3. Easier to fund if you have more dollars in your Special and Ordinary Accounts, and you will definitely have more dollars if your Special Account is bigger sooner, earning the higher annually compounded interest that the Special Account enjoys.
