CPF Full or Enhanced Retirement Sum for AK?

It has been a while since I blogged.

So, I decided to share this reply to a reader's comment as a blog since it is a little more substantial. 

If you are interested in the reader's comment, you can read the comment: HERE. 

Hi Staerfeldt, 

I am glad that my blog has been inspirational. :D 

The CPF has definitely been gaining popularity compared to the reception it used to get in my early days as a blogger. 

The very low interest rate environment in recent years probably made it even more popular. :) 

It is important to remember what is the primary purpose of the CPF which is to help fund our retirement. 

So, we should not use our CPF savings in a careless manner in so many ways just because we are allowed to. 

Many who invested with their CPF savings would have been better off just leaving the money in their CPF accounts. 

The CPF is really designed to help the masses and not the rich amongst us: 

Unfair FRS and ERS' CPF LIFE payouts? 

CPF LIFE is an annuity that pays for life. 

So, ERS is a pretty good way of ensuring we get more monthly pocket money in our old age. 

However, this only really pays off if we live a very long life. 

Beyond the first $60K in CPF savings, the RA pays 4% per annum just like the SA. 

So, it really isn't a big loss if we choose to have FRS instead of ERS, leaving some money in the SA untouched which gives us options on withdrawal too. 

Personally, I think the FRS is good enough as I like to keep my options open. 

Of course, I could change my mind later on. :) 

You might be interested in this blog from 2015: 

Choose your own CPF adventure! 

References:
1. CPF can be our best friend. 

2. How to grow our CPF savings? 

3. 4 ways to boost our CPF savings.

4. A cornerstone in retirement funding.

From CPFB:

What are the Basic Retirement Sum (BRS), Full Retirement Sum (FRS) and Enhanced Retirement Sum (ERS)?

1Q 2021 passive income: Sabana and IREIT to the rescue.

It has been a few weeks since my last blog and I hope everyone is doing well.

I have not done anything to my portfolio in 1Q 2021 apart from adding a bit more to my investment in Sabana REIT in early January.

Of course, from my blog title, you would be able to tell that my decision to significantly increase my investment in Sabana REIT late last year and early this year turned out pretty well.

Total dividends received in 1Q 2021 was some 48% higher compared to 1Q 2020 and my bigger investment in Sabana REIT is one reason for this.

The biggest contributor to the increase in dividends in dollar terms, year on year, is IREIT Global, as I took part in the rights issue and even bought more after the rights issue.

Total passive income from my investments in 1Q 2021:

$36,551.14

Reference: 1Q 2020 passive income.

This will help to pick up some slack which I am expecting in 2Q 2021.

2Q 2020 saw a strong passive income number of $57,395.95 but that included distributions from two big investments in my portfolio: 

Centurion Corporation

and 

Accordia Golf Trust.

Reference: 2Q 2020 passive income.

Of course, Accordia Golf Trust is no more while Centurion Corporation has suspended dividends.

Although I have increased my investments in DBS, OCBC and UOB, they are still paying lower dividends for the time being.

Expecting decent enough dividends but nothing very impressive.

ST Engineering, VICOM and Wilmar should help to bring home much of the bacon in 2Q 2021 while ComfortDelgro might take a bit more time to recover.

Time will tell.

I will just wait to see how things turn out and probably share my 2Q 2021 numbers in early July.

At the moment, I am somewhat optimistic that my portfolio should be able to generate at least $120,000 in passive income this year.

Reference: Dividends and interest income reduced.

I cannot be absolutely sure since the COVID-19 pandemic is still very much alive.

So, although vaccines are available now and a global vaccination drive is underway, we should remain cautious.

Things should get better from here if we are more cautious and we should see some semblance of the old normal returning in another couple of years if nothing goes wrong.

The fear is complacency and, worse, a mutation of the virus which the vaccines are ineffective against.

Having said this, if you can, register for vaccination and get people around you to do the same.

Till the next blog, stay safe and keep all of us safe.

COVID-19 Vaccination.

Related post:
4Q 2020 passive income.