My plan for CPF as SSB 3.32% p.a. oversubscribed.

I blogged about my interest in buying some Singapore Savings Bond which offered 3.32% p.a. in 10 year average yield.

It seems that many more people have the same idea.

The results are out.

The SSB was oversubscribed.

Fortunately, for smaller applications like mine, we had 100% of our applications filled.

This SSB partially replaces planned voluntary contributions to my CPF account in 2024, the year I turn 54 years of age.

If this continues, it looks like I won't be making further voluntary contributions to my CPF account.

The plan was, of course, to continue making voluntary contributions till I turn 55.

With interest rates being so low for so long, the plan was to continue making voluntary contributions to my CPF account even after I turn 55.

The idea was to use the CPF as a high interest rate savings account beyond age 55.

However, with interest rates likely to stay higher for longer now, that plan has become less attractive.

Some might even say the plan is now obsolete.

I could get higher interest rates simply by putting money in fixed deposits, for example.

The only drawback of the SSB is that it does not compound interest earned.

Still, at my age, with the resources that I have and the kind of financial obligations that I have, I think that is almost a non-issue.

This is just me talking to myself, of course.

We have to do what makes sense for us.

If AK can do it, so can you!

Topping up my CPF Medisave Account. Again?

So, I did a top up to my CPF Medisave Account. 

Wait a minute.

Didn't AK say his CPF MA already hit the Basic Healthcare Sum which means no top up is allowed?

Yes, I did.

However, NTUC Income does a deduction yearly to pay for my private shield plan.

I try to remember to top up my CPF MA whenever this happens.

Still, I would forget sometimes.

The CPF MA pays 4% p.a.

Risk free and volatility free, it is too good to miss.

Don't have to do the top up immediately.

Just have to do the top up a few days before the end of the month since CPF only considers the lowest balance in the month when calculating interest to be paid for the month.

Of course, by doing this, it ensures we earn more interest in the CPF MA. 

And interest earned in the CPF MA will overflow into the SA in the new year for those who have yet to hit the Full Retirement Sum.

The CPF SA also pays 4% p.a.

This will help grow our CPF savings faster.

Oops. I should have said 4.04% p.a.

Huat ah!

I am looking forward to topping up my CPF MA again in the new year if they increase the Basic Healthcare Sum.

This is probably going to be $3,000 or so, if it happens.

Don't look down on 4% or 4.04% p.a.

Even if we have yet to hit the Basic Healthcare Sum, with $50,000 in the CPF MA, we are still getting $2,000 in interest income per year, for example.

That would be enough to pay for most people's  yearly medical insurance policies.

Of course, I first blogged about this in 2013, and I have talked to myself about this from time to time since then.

If AK can do it, so can you!

References:
1. Do you want free medical insurance?
2. Free medical insurance in our old age?