Should I transfer OA to SA ?

[camholicx]

37 yrs old this year, and i am single.

I have a HDB loan of $330K, monthly paying at $1500.
My contribution to OA is only $900. The remaining $600 will be deducted from my OA.

OA current balance is $90k.

Should I transfer $30k into SA instead?

I do not intend to buy another flat in future. Pls advise.

 

[starlight318]

37 yrs old this year, and i am single.

I have a HDB loan of $330K, monthly paying at $1500.
My contribution to OA is only $900. The remaining $600 will be deducted from my OA.

OA current balance is $90k.

Should I transfer $30k into SA instead?

I do not intend to buy another flat in future. Pls advise.

If I were you,I would just keep an amount enough for one year's instalments and trasnfer the rest to SA to earn extra interest. Of course you have to assess your own situation and how long it will take to secure another job should you lose your current job one day.

 

[camholicx]

just to check, the first 60k in OA is earning extra 1%?

 

[starlight318]

just to check, the first 60k in OA is earning extra 1%?

It is the first 60k in oa and sa combined balances, of which only up to 20k comes from OA. That means if your SA only has 30k, you are only getting 1% extra interest for the 30k in SA nd 1% extra for first 20k in your OA. In this scenario, you should transfer at least 10k from oa to sa to make full use of the extra 1%

 

[camholicx]

thanks for the advise. If my medisave account already ma at 52k.

The interest from medisave account will be pump into SA?

 

[JuniorLion]

thanks for the advise. If my medisave account already ma at 52k.

The interest from medisave account will be pump into SA?

Yes. On 3rd Jan 2018 (or thereabouts), the interest will be credited to your SA.

From Year 2018 onwards, the BHS is $54500. Then any more MA contribution in 2018 will continue to be credited in your MA account, until it hits the $54500 cap.

 

[kehyi4]

Don't count on the extra 1% interest in OA because it is paid into SA, not OA

 

[henrylbh]

It is the first 60k in oa and sa combined balances, of which only up to 20k comes from OA. That means if your SA only has 30k, you are only getting 1% extra interest for the 30k in SA nd 1% extra for first 20k in your OA. In this scenario, you should transfer at least 10k from oa to sa to make full use of the extra 1%

That's provided you have at least 30k in OA. Note MA also count in the first 60k.

 

[edwinttt1978]

37 yrs old this year, and i am single.

I have a HDB loan of $330K, monthly paying at $1500.
My contribution to OA is only $900. The remaining $600 will be deducted from my OA.

OA current balance is $90k.

Should I transfer $30k into SA instead?

I do not intend to buy another flat in future. Pls advise.

Yes, you should. And you should do it as soon as possible.

 

[dork32]

60k, withdrawing 600 a month with 2.5% interest last you 112 months.

also, you may get bonus and ot. this will add to your cpf contribution. you may get annual increment which will add to the 900 you are contributing.

even with 30k less in your oa, you will have more than enough to cover your home loan for a long time, provided your job is safe.

for me, i am brs guy. i will not transfer anything into the sa.

 

[chiusa]

The problem is not now but 10 years later on the road. OA is emptied on the HDB. No more job security at that age.

 

[Wood41]

OA is for mostly housing & earns less.
SA is for retirement & higher interest.

Can you be sure that you will not upgrade /
new home using OA later since you are quite young ?

I transfered all my wifey’s OA to SA as we are almost certain it will not be used for housing &
for her retirement.

 

[Wood41]

Some jobs are always in high demand even at older age.
Some much older retired I know got recalled & restarted working .

The problem is not now but 10 years later on the road. OA is emptied on the HDB. No more job security at that age.

 

[BBCWatcher]

for me, i am brs guy. i will not transfer anything into the sa.

OA to SA conversions (transfers) have zero impact on your choice of CPF LIFE participation level, except that you will attain that level that much faster due to the higher interest. It's only top-ups that sometimes have that impact.

 

[babyrobo]

Some jobs are always in high demand even at older age.
Some much older retired I know got recalled & restarted working .

can share some of these jobs? i might want to look into switching fields. have been out of job for some time and quite a few times kena the axe

 

[babyrobo]

60k, withdrawing 600 a month with 2.5% interest last you 112 months.

also, you may get bonus and ot. this will add to your cpf contribution. you may get annual increment which will add to the 900 you are contributing.

even with 30k less in your oa, you will have more than enough to cover your home loan for a long time, provided your job is safe.

for me, i am brs guy. i will not transfer anything into the sa.

what to do to manage the funds at brs? there has been many posts abt gunning for FRS so am keen to know how to keep the $ at brs.. can share?

 

[BBCWatcher]

what to do to manage the funds at brs?

That's a strange goal (in and of itself), but if that's your goal, just boost SA as fast as you can without SA top-ups, that's all. Compulsory contributions, "spillover" from MA into SA (once your MA reaches the Basic Healthcare Sum), and OA to SA conversions (transfers) are all perfectly lovely and boost your SA (and age 55+ funds eligible for withdrawal above the BRS) that much faster.

If you don't top-up your SA then you miss out on $7,000/year in tax relief (and $7,000/year more for an eligible recipient). And that's a loss, but it's your call.