Voluntary contributions to CPF in January 2020.

Remember the blog I published two years ago in January 2018?

Which blog?

This blog:

8 years AAA bond with 2.5% and 4% coupon!

I was referring to a AAA rated sovereign bond.

Know where to find such a bond?

Pause.

Pause.

Pause.

Regular readers will know that I was talking about the CPF, of course.

Guess what?

This "bond" is even more attractive to me now!

Why?

It is more attractive to me now because the tenor has shortened by 2 years and the coupons are still 2.5% and 4%!






Get the same coupons from the same bond but for a shorter tenor?

What an attractive deal!

You know what people say about Singaporeans loving to queue for deals?

Willing to join long queues to spend money on things like stuffed toys (think Hello Kitty) or mobile phones (think Huawei Y6 Pro)?

OMG!

These people are crazy!

Overnight queue for BTS Singapore concert merchandise?


Madness!







So, is AK saying we should queue to do voluntary contributions to our CPF instead?

Alamak, you don't know?

We don't even have to queue!

Just do everything online!

Amazing or what?

OK, I know.

I say you crazy.

You say I crazy.

Now, why not ask if you would rather be 

crazy and poor 

or would you rather be 

crazy and rich?


See:
Do online contribution to CPF?

Wait.

What?

You don't know why it is a more attractive deal for me now?

Basically, the closer we are to 55 years old, the more attractive the "coupons" become as the waiting time is shorter.

Chop, chop!

M.T.L.

Yes, I have made voluntary contributions (VC) to my CPF accounts (OA, SA and MA) this month.

The CPF Annual Limit for 2020 remains at:

$37,740.

So, a $2,800 VC to my MA.

Then, a $34,940 VC to my OA and SA.

Yes, AK bought a 

"6 years AAA rated sovereign bond with coupons of 2.5% and 4%" 

this month!






Why make maximum VC this month?

The idea is pretty simple to the economically inactive AK.

Hit the CPF annual contribution limit in January each year to get the most interest income possible.

Remind myself again to think of it as having bought AAA investment grade sovereign bonds that pay 2.5% (OA) and 4% (SA and MA) coupons!

"Spend less than you make; always be saving something.

"Put it into a tax-deferred account.

"Over time, it will begin to amount to something.

"This is such a no-brainer."

- Charlie Munger






I plan to keep doing what I have been doing with my CPF because I want it to "amount to something" by the time I am 55.

I know some readers want me to show my CPF numbers.

Patience.

Look out for an upcoming blog on what my CPF savings has amounted to so far.

This will happen probably before the end of this month.

Yes, soon, it will be time to see our pies. ;)

If you are absolutely clueless, please read the blog I hyperlinked at the intro of this blog for a more detailed reasoning as I do not want to repeat myself (too often) lah.








Related posts:
1. How to grow our CPF savings!
2. 4 ways to boost our CPF savings.
3. VC to CPF-MA in 2020.