2022 CPF Top Up and Voluntary Contribution done.

How time flies and it has been more than 5 years since I became a retiree, just a few months before I turned 45. 

In my case, financially, the biggest negative aspect of being a retiree is probably the lack of mandatory CPF contributions. 

I mean my passive income is large enough to replace my past earned income and then some. 

So, I suppose my cash flow is healthy enough. 

However, as I believe in growing my CPF savings so that it continues to act as a meaningful bond component of my investment portfolio, I would do Voluntary Contribution every year to the maximum allowed. 

Yes, I have been growing my CPF savings without any help from mandatory CPF contributions which those who are employed receive. 

Makes me wonder if I should return to the workforce? 

Exchange my time for money again? 

Lazy me working again? 

PTSD!


Of course, even in my retirement, I was not able to do any Top Up to my CPF account as my CPF SA has exceeded the prevailing FRS. 

Year after year, the interest earned by money in my SA would exceed any increase in the prevailing FRS. 

Yes, without me having to do anything, my SA stays above the prevailing FRS. 

See: 

CPF SA is not a myth. 

This year, however, I am allowed to do a Top Up but to my MA, not my SA. 

If you missed my blog in November last year on the topic, please read: 

CPF Amendement Bill 2021 and AK talks to himself.


What did I do this year?

In my case, I am interested in pumping as much cash as possible into my CPF account. 

So, for maximum cash injection into my CPF account, I first did a $3,000 Top Up to my MA to hit the new BHS of $66,000. 

Then, I did a Voluntary Contribution or VC3 (i.e. VC to 3 accounts) that is equivalent to the CPF Annual Contribution Limit of $37,740. 

The order is important because if I had done the Voluntary Contribution first, then, the money would have flowed into my OA, SA and MA, leaving less room to Top Up my MA. 

As I did the Top Up to my MA first, I could inject more funds in total to my CPF account and money from the Voluntary Contribution or VC3 flowed only into my OA and SA, effectively becoming VC2.

AK so witty.

Compared to the last few years, total voluntary cash injection into my CPF account this year is higher at:

S$ 40,740.

Those of you who complain that AK has not been giving 4D might see a potential 4074 here.

Kidding!


I have said it countless times but CPF members are a fortunate bunch. 

Albert Einstein said compound interest was the 8th wonder of the world. 

He who understands it, earns it. 

It is the same with the CPF. 

Happy New Year! 

Recently published: 

Should I enroll in Careshield Life?

Related post:
CPF interest income in 2020.

Should I enroll in Careshield Life?

Some time back, a reader asked me about Careshield Life and being the lazy person that I am, I didn't want to blog about it.

I simply said that my attitude towards Careshield Life is the same as my attitude towards Eldershield which is the truth.

They are both disability insurance products and if we have the best insurance in life, we don't really need these.

See:

Eldershield: Is it really necessary?

and

Best insurance to have in life.

However, as many people do not have passive income that is sufficient for them to stop working, it is a good idea for them to have disability insurance.

For this group of people, Careshield Life is a better product than Eldershield for the following reasons:

1. Lifetime coverage.

We only need to pay till we are 67 years old or for 10 years after joining, whichever is later, and we are covered for life.

2. Lifetime cash payouts.

We get monthly payouts for as long as we are severely disabled while Eldershield only pays for up to 6 years.

3. Payouts increase over time.

Eldershield pays a fixed amount of $400 a month while Careshield Life pays $612 a month and it will increase at 2% per year.

Low income families probably need Careshield Life the most and they will receive significant subsidies. 

For those of us who are older, we will get incentives for joining Careshield Life by 31 Dec 2023.

I received a letter from the Ministry of Health to automatically enroll in Careshield Life last month. 

Based on my age, I will get a small incentive to do so too.

Since I was already enrolled in Eldershield to help lower the cost of collective risk sharing at the suggestion of a friend, I went with the automatic enrollment.

Careshield Life is a low cost disability insurance product. 

For me, the premium is $200+ in the first year after subsidy and incentive. 

I also like the idea that I am doing some good for society with my enrollment.

For anyone who is interested in finding out more, do a login with your Singpass at:

careshieldlife.gov.sg/cshl-premium-checker 

to check on the premiums.

To be fair, although self insurance is probably the best form of insurance, we can never tell if our passive income could be impacted negatively at any point in time.

So, having some disability insurance is probably not a bad thing even for those of us who have the best insurance in life.

Related post:
Total and Permanent Disability Insurance.