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Why CPF only cares how much to take from our OA and SA?

Tuesday, September 20, 2016

The CPF is a tool which we should make good use of in planning retirement funding. How we make use of the tool depends on our circumstances.

Just do what we feel comfortable with. As long as we are approximately right, we will do OK.



Hey AK,

Thanks for sharing your thoughts although it can be very ambiguous and cryptic most of the time! I know how you are trying to not be made liable in case of anything here :)
In between our mails, I did actually drop by CPF Board to check with one of the counter people on my same ask.

So the long story short (correct as of today's goalposts) is that CPF only cares about how much to take from our OA + SA to setup our RA, in accordance to our choice of BRS, FRS or ERS, once we reach 55.  How we get to that amount is none of their concern.
Yes, you may have addressed this previously or even known about it yourself but I must say, it's really assuring to hear it on my own from the horse's mouth.

Now, I'm even more motivated to get to my targeted amount I shared in my earlier mails by tapping on CPF's risk-free 4% p.a. rate. Of course, "downside" is that I can only enjoy at age 55 lah. Well, slowly lah hor... take care of my lowest hanging fruits first.
Like you said, as long as we're doing approximately right, we'll do OK :)
Have a good afternoon, AK!
Sincerely,
F

AK agrees with F, of course. So does my niece.
A present from my niece.
I think she is approximately right. ;)
Related posts:
1. Get the most out of ASSI.
2. A chat on CPF Top Ups etc.
"In investments, we go for low hanging fruits first. Why should it be different when it comes to planning for retirement adequacy?" - AK

2 comments:

Adam said...

Hi AK

I'd like to tap on your knowledge on CPF. If I have met my basic healthcare sum and FRS, where will my monthly MA contribution go to? SA or OA?

If it goes into SA, the extra interest over the years will be substantial. If OA.. not so much

AK71 said...

“Medisave contributions above Medisave Contribution Ceiling (MCC) will flow to a member’s Special or Retirement Account to help improve his retirement adequacy. This will help to increase the monthly cash payouts from CPF LIFE, which can be used to supplement his Medisave monies for his healthcare needs if necessary,” Associate Professor Faishal said in response to a question filed by MP Baey Yam Keng.

Source:
http://www.channelnewsasia.com/news/singapore/1-in-5-cpf-members-aged/2057788.html

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