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A note on the CPF and a break from blogging.

Monday, January 11, 2016


Regular readers know that I only want to be a happy peasant. I was never royalty or an aristocrat. I am of the masses. 

DPM Tharman said before that the CPF is meant to help the working masses. That is why there is a limit to doing OA to SA transfer, to doing MS Top Ups to the SA and also to doing Voluntary Contributions to the MA.

For many people, it is easy to miss the big picture. A fixation on theoretical opportunity cost could turn out to be costly. 

In our investment portfolio, the CPF should be considered an investment grade bond component that gives us peace of mind (and relatively good coupons). It is not, however, the be all and end all in a sound retirement funding plan. 




We cannot build a house on just a cornerstone but to give up a cornerstone in a house, we must have a high level of certainty that whatever takes its place is going to be just as strong or stronger. 

If the alternatives have a higher level of risk or a greater degree of volatility, then, we would need a helping hand from Lady Luck to ensure the house remains standing in the years to come.

Be careful who we listen to when we build a house of our own.

I will be taking a break from blogging etc. for a few days. It is probably a good idea to get away from things familiar for a bit. 

Don't worry. I will be back. :)

In the meantime, keep building your house carefully. ;)

Related posts:
1. AK is showing off his CPF-OA and MA.

2. AK's SA outperformed in 2015.
3. Building a cornerstone in retirement funding.

10 comments:

starlight said...

Hi AK
Enjoy your break and looking forward to reading your posts.
Thank you.

AK71 said...

Hi starlight,

Thank you very much. :)

Tiger said...

Thanks for the story.
Funnily enough, I was accidentally copied the article in an email distribution by your host to the company directors. She sounded appreciative and positive about the visit. Why was my email accidentally in the list? Previously, she replied to a simple query that I had on another matter. I guess somehow my email got mixed up in the list.

By the way, what are your thoughts about Keppel Reit?

AK71 said...

Hi Tiger,

I am confused. Who is 'she'? What directors? CPF Board's?

Keppel REIT? I had a very dim opinion of their acquisitions in recent years. Rental support etc. I haven't really looked for a while.

LKH said...

AK, did you buy any stocks during recent meltdown? You used to share what you have bought :)

AK71 said...

Hi LKH,

Most recently, I bought some DBS at close to $14.00 a share.

I stop sharing my purchases in my blog at the advice of a couple of close friends. I think I should listen to them. :)

Tiger said...

Hi AK47, I posted in the wrong article.
I was referring to your tour of AA Reit properties.
She is Joanne Loh.

Tiger said...

AK, DBS bank has quite a large exposure to the oil and gas sector. Oil prices are plunging. Concerns?

http://sbr.com.sg/energy-offshore/news/chart-day-which-bank-most-exposed-struggling-oil-and-gas-sector

AK71 said...

Hi Tiger,

Ah, I see. Makes sense now. Haha. :)

I didn't get a copy of that email distribution. Care to share with me?
ak71@sillypore.com

;p

As for DBS Bank's exposure to O&G, I don't have all the details but it would depend on the strength of the borrowers. If DBS Bank has been prudent and only extended loans to O&G companies with stronger balance sheets, it should be OK.

AK71 said...


Blogger Unknown said...
Hi AK,

Like you, i've always max out my annual CPF limit.
But i'm lucky. company pay out bonus/aws at beginning of the year.
Thus i do not VC in excess of limit

if @ age 55, combined(OA & SA) already over FRS.
do you think its a great idea to continue VC to CPF?
since @ 55, contribution dropped to 26%
----------------------------------------

Blogger AK71 said...
Hi Unknown,

Although I have much more than the FRS in my CPF account, I continue to make voluntary contributions and I am probably going to keep doing this till I am 65 or maybe even older. This is because I believe it is the best investment grade bond I can get for my money and I believe in the stabilizing effect of having such bonds in my investment portfolio. :)

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