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AK is showing off his CPF numbers graphically.

Friday, February 12, 2016

This is probably something that quite a handful of CPF members struggle with. 

Although I cannot say that what has worked for me would definitely work for them, I can say, if we believe in having some investment grade bonds in our portfolio, that it is something worth considering.



Hello AK,

I have been a follower of your blog and I have one question to ask.


I like to take the low risk style to invest, and that's why I have been investing in unit trusts and shares like Singapore Airlines and Singtel.


However, I realised that we can do self top ups to Special Account, which will earn a guranteed 4% per annum interest. 

Considering that is risk-free, I think it is a worthy decision to transfer my investments to this special account. 

Do you think I should transfer to the special account? 

I do know that I can only withdraw from it at 55 years old, but I'm planning for the future :0

Kind Regards,J




My reply:

Hi J,

OA to SA transfer was something I did consistently in my early years. ;)

It has turned out very well for me. :)

Best wishes,
AK



It is also worth reminding ourselves that it is not only risk free, it is also volatility free which is good for my heart.



This isn't Quantum Physics. 

It is simple math.


Related posts:
1. AK's CPF SA outperformed in 2015.
2. AK is showing off his CPF OA and MA.
3. Building a cornerstone in retirement funding.
4. Some people say AK "how lian".
5. A note on the CPF and a break from blogging.

10 comments:

coconut said...

wah piank AK, your CPF....

got a question AK, my son is a musician so he has no CPF contribution. i thought of contribute for him so that his CPF can be like yours in due course, no, i think can have 20% is good enough.

question is can i do that, and whats the limit amount? can use it to buy house later?

thank you eh.

AK71 said...

Hi coconut,

You are a good father. Of course, you could deposit money in your son's CPF account. :)

The annual limit for 2015 was $31,450. I am not sure what is it for 2016. Should be a bit higher.

Fill out a Voluntary Contribution form and send it to CPF with a cheque and you are done.

The contribution will be split between the OA, SA and MA. Money in the OA can be used to fund the purchase of a flat in future, of course.

coconut said...

thanks AK, will try and fund his CPF after finding more facts from CPF board. yes sir i worry about him cos he cannot save money and sometime i have to give him allowance even he is now working.

putting in CPF at least he can't touch it for now haha...

AK71 said...

Hi coconut,

He reminds me of a cousin who is also a musician. He has a very easy attitude towards money. Makes $2,000, spends $2,000. Very little savings but he is happy with his life.

I cannot live life like this.

I guess we are all different and, in a way, I envy him.

kehyi said...

Current CPF Annual Limit is:

$6000 x 17 mths x 37% = $37,740

EW said...

My wife is not working ever since we were married 12 years ago. I have been topping up her SA for the last few years after maxing my own SA. I get tax reduction, 4-5% interest rate, why not... I top up using cash + transfer my monthly OA contribution to her SA account to clock higher interest rate ;-)

My wife is the type of person who cannot "see" money in her bank account, so SA is good for her - can see, but cannot "touch". She always say you don't know when you will die, keep so much $$ also no use. My reply to her is - what happen if you can live till 80 years old ? Life will be very miserable when you are old and without $$. I don't want to be a burden to my kid. I want to live with pride even after i retire.

She has 60K in her SA now, my target is to top up till 160K in the next 5 years. By 55 years old, she will have a quite a good some of retirement $$ even if i am not around.

Rgds
EW

AK71 said...

Hi kehyi,

Thanks for the update. :)

AK71 said...

Hi EW,

You are a good husband and your wife is very lucky. :)

I know many people ask me the same thing: "Save so much money for what?"

YOLO...

I always reply:

"If you are rich and already have a lot of money, then, no problem. If you are not rich and you ask that question, you need help."

Sebastian Low said...

Hi
Mr J account has 54k contribution.isint there a limit of 31k contribution?

AK71 said...

Hi Seb,

Good question. I guess interest earned is included. Also, there could be some excess voluntary contributions in the year to be refunded in the following year. Just guessing...

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