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2018 CPF savings in a pie chart. (Growing CPF savings.)

Monday, January 28, 2019

There is always some risk when it comes to investing in stocks and there will always be some degree of price volatility.

Not everyone is able or willing to take risk when it comes to their money and not everyone is able to stomach price volatility well.

Some get sick from the volatility and some even die from it.

This is why we are fortunate in Singapore to have the CPF.

CPF members should take full advantage of this risk free and volatility free instrument that pays reasonably attractive coupons.

Yes, I say coupons because I look at my CPF savings as the risk free and volatility free investment grade bond component of my investment portfolio.

Having a meaningful amount of CPF savings will give most of us peace of mind as we cannot reasonably expect every year to be a good year for our investments.

In my retirement, lacking mandatory contributions to my CPF account, I have been voluntarily contributing to my CPF account and here is what it looks like at the end of 2018:

$845,373 at the end of 2018 and that was at the ripe old age of 47 too.

By age 55, more likely than not, my CPF savings will be in excess of $1 million.

To the very rich, $1 million might not be a lot of money but to the vast majority of us, I am sure it will make a meaningful difference in funding our retirement.

This is why I share my CPF story.

Unless we are handicapped in some way, I believe that if we put in enough effort, we can become CPF millionaires.

If you are a CPF member and have yet to max out the benefits of your membership (think FRS and BHS), read this blog:

CPF is all we need unless we are very rich.

Many or most Singaporeans do not realise what a good thing the CPF is.

Haven't reached the prevailing Full Retirement Sum (FRS) in your CPF account and thinking of buying a bond fund?

If you have yet to hit the Full Retirement Sum, why bother with bond funds?

Want a financially more secure retirement?

It is really as easy as ABC, er, I mean as easy as CPF.

Believe me when I say:

If AK can do it, so can you!

If you haven't listened to the song, listen, there is a hidden message.

Related posts:
1. Voluntary contribution to CPF MA (2019).
2. CPF interest earned in 2018.
3. Financial security plain and simple.


AK71 said...

Sim On says...

I think like this as I am going to do VC for 10years until 55yrs old.

I hope to live another 10years from 65 taking around more than 850 per month.

Anything more is extra.

It's just another force saving for retirement.

Don't think too much.

AK71 said...

Loo Cheng Chuan says...
Amazing! You could be 1M50 !

AK says...
Lucky not RM50 :p

WK888 said...

AK, all these from topping up $7k year in & out without fail? How many years to reach that figure?

Jacky said...

Hi AK - might have missed the post somewhere but for your CPF, it is all based on employment contribution and voluntary contribution? Noticed that your OA is quite high - meaning you didnt transfer your OA to SA? Means your contribution must be quite high!

AK71 said...

Hi WK Yap,

I wasn't always as financially comfortable as I have been in recent years.

I didn't have the extra money to do Top Ups and all I did was to transfer all my OA savings to my SA in the first 4 years of my working life.

Top Ups require cash out of pocket.

OA to SA transfer is just moving money that is already in my CPF. :)

That really made a big difference as the magic of compounding needs time and a bigger base to be more magical. ;)

I shared this before in one of my earlier blogs on the subject:
How to upsize $100K to $225K?

AK71 said...

Hi Jacky,

Please see my reply to WK Yap above. ;)

As for how did I amass so much money in my OA, the answer is in this blog:

How did AK amass so much money in CPF-OA"

AK71 said...

Sau Yee Fong says...
Actually, I think if someone don't spend too much of their CPF OA in buying a home, religiously do VC to annual limit of $37,740, one can comfortably retire at 55 without having the need to buy endowment plan or private annuity. I don't think any of these can guarantee an annual return of 2.5%.

AK71 said...

Yew Khim says...
In the article, You put in green
“CPF is all we need unless we are very rich”.
Can you clarify what do you mean by this statement?

AK says...
It is hyperlinked.
Please click on it to read the blog on the topic.
All will be revealed then. ;)

AK71 said...

Reader says...
I have not had income for long & now feeling extremely stress.
Plus my ignorance on CPF hacks had caused me to lose 20 years of Compound Interest.
Nonetheless, I am happy with the additional $1000 interest from CPF this year.
Just by transferring from OA to SA.
Many thanks to u.

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