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CPF SA time and income lost due to peer pressure.

Sunday, August 26, 2018

Definition of "peer pressure":

A feeling that one must do the same things as other people of one's age and social group in order to be liked or respected by them.

(Source: Merriam Webster Dictionary)







Reader says...
In my 20s, I already had the intention of transferring the monies from my OA to SA.

I also intended to make voluntary contribution to my CPF accounts at that point of time.

I told my friends about my intention and they criticised my plan and called it a "stupid" idea.

As a result, I did not execute my plan.

I finally took action when was 38 years old two years ago. 

I transferred the maximum allowed from OA to hit FRS in SA without telling anyone then.






Of course, my OA was significantly reduced after the transfer.

Going forward two years, my OA balance surpassed my SA once again due to mandatory contribution from my active employment.

I have no regrets doing the OA to SA transfer.

I only regret succumbing to peer pressure and not doing this in my 20s.






AK says...
Yes, doing OA to SA transfer in our 20s would make the government work a lot harder in building our CPF savings to meet the FRS much faster.

People sometimes say that 4% interest in the SA is only 1.5% more than 2.5% in the OA.

I always tell them that it is not 1.5% but 60% more!


Add the magic of compounding, it becomes much, much more. ;)






Peer pressure can be a terrible thing.

Some things we should never do despite what our peers tell us.

Some things we should go ahead and do despite what our peers tell us.

If our facts are right and if our reasoning is sound, stick to our plan and ignore the noise.





AK anyhow talking to himself only lah.

I am not peering at you.

I am not giving you pressure.

No peering and no pressure hor.








Related post:
1. Bigger retirement fund with CPF-SA.
2. Much money in SA from the government.
3. Hit FRS in SA by age 32!
4. FRS in CPF SA at age 30?

19 comments:

Ben said...

Hi AK,

Thank for posting my comment.

I have since gained additional insight. I will not lament on the decisions which were made in the past. It cannot be undone. It will be more fruitful focusing on the present and look on how to make the best possible decision which will benefit the future me. I believe that this should be made applicable by others as well.

The peer pressure is everywhere. I am also single like you. The peer pressure from my friends/associates also probes on the circumstance in which I am single and it is a taboo remaining single and despised by all in Singapore, I have since ignored such perceptions and comments which are totally irrelevant to me.

I will also get married when I find the suitable significant partner. Even if I get married, there is bound to have more pressure in having the children, property purchase etc. The peer pressure never gets ending. That is the reason why I no longer see the point in keeping with the peer pressure. It is totally unhealthy and mentality stress to ownself.

Ben

Laurence said...

Haha, AK is referring to Sleepydevil.

Devan Z said...

hi AK,

would topping up cpf still make sense if frs increases at a rate higher than sa interest eg, frs increase at 5% per year? this means more money locked in until u reach 65. =.=

WGM said...

Hi AK,

There's always two sides of a coin. How can we use peer pressure to improve ourselves? I think it depends a lot on the 'peer'(s).

'Fire isn't good or bad. It just burns.' - Karen Marie Moning

WGM

sleepydevil said...

Hi AK,

I share the same sentiments with this reader. I'm pretty badly bashed too for my actions :(

AK71 said...

Jimmy Ng says...
Like me, he woke up nd took action.
Come 65, lets see who has the winning ๐Ÿ˜ when the 1st cpf life payout arrives


AK71 said...

Raymond Ng says...
I like this...
Similarly when I told others that GST increase from 5 to 7% is 40% increment in our expenses on GST. ;)

AK71 said...

Hi Ben,

Peer pressure is a terrible thing, isn't it?

From the things I do and say, I think it is evident that I have cultivated a peerless ability to disregard peer pressure over the years.

AK pai giah! :p

AK71 said...

Hi Laurence,

Aiyoh. BYHW. -.-"

AK71 said...

Hi Devan Z,

That is a hypothetical situation.

Too many "what ifs".

I would make decisions based on what I know. ;)

AK71 said...

Hi WGM,

Oh, yes, we cannot choose our family but we can choose our friends.

Choose our friends carefully. ;)

AK71 said...

Koh Kai Xiang says...
I’m on the luckier side as I discover AK blog earlier this year (late 20s) and did a bulk transfer last few months ๐Ÿ™‚

AK71 said...

Jieren Azrael Zheng says...
I think it is ok to do the transfer (I did as well) but one must understand each circumstances before doing. The OA might be required.
But how come your picture is talking about Temasek and GIC.

AK says...
I anyhow blog de lah.
Video also anyhow share lor. ;p

AK71 said...

Hi SD,

If we care very much about how our peers look at us, it could be difficult to move forward.

Your destiny is in your hands, not theirs. :)

Devan Z said...

hi Ak,

Minimum sum in year 2008 was $106,000. FRS in year 2018 is $171,000. If my math is correct (im quite bad at it), then that is about 4.9% increase per annum which is higher than the return rate for SA which is 4%.

The "hypothetical" situation had happened before, and nobody can confirm it will not happens again. Is it still wise to top up cpf? Or would it feels like a never ending chase to reach the shifting goal post of FRS and eligible payout age.

Perhaps it might work for some people (those approaching 55) but might not work for all (those in their 20s or 30s)? Just trying to get a balance view on things.

AK71 said...

Hi Devan Z,

What I know is that we have to plan for a financially secure retirement.

What I know is that the CPF is risk free and volatility free.

What I know is that with inflation, we will need more money in future to retire more comfortably.

I am comfortable with having a bigger annuity (i.e. money locked up in the CPF-RA) to help ensure retirement adequacy.

This is what I meant by working with what I know.

Those who save more in their CPF earlier will, no doubt, make the government work harder to help them meet the FRS.

Those who don't do it will have to work harder later on in life.

There should be no debate on this. ;)

AK71 said...

See also:
Are we worried about retirement adequacy the right way?

AK71 said...

Jackson Yang says...
My eye fixed at $350k FRS liao... because that's what math told me when I include 3% annual


Jack James says...
You are 19 years old now ?
Year 2054 will have S$351,000 ๐Ÿคฃ๐Ÿคฃ


Jackson Yang says...
Nope. For those who is 19 YO now, they will need $495k FRS when they reach age 55, consider 3% annual increment....


Jack James
๐Ÿ˜ฑ๐Ÿ˜ฑ

Ben said...

Hi

I am not sure whether the FRS will increase 3% per annum as things stand. It's the matter on how to react to the circumstance. It will be more prudent to adopt the flexible approach and adopt the appropriate changing approach to handle the unpredictable increment.

Ben

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