Extra 1% interest for CPF savings and MSTU.

The following is contributed by a reader:

 

The CPF Board's response is appended below. I've edited the questions and part of the response to mask personal information hence, the flow of CPFB's reply may not make sense but I trust that the key points of interest are in there. Feel free to reproduce it:
 

Question: How would the extra 1% interest earned on OA + SMRA be earned? 

 

The extra 1% interest per year is currently paid on the first $60,000 of a member’s combined CPF balances.

 

The priority of the accounts that make up the $60,000 is as follows: 

 

1. Retirement Account (RA), including balances used to pay for the annuity premium under CPF LIFE

2. Ordinary Account (OA), up to $20,000

3. Special Account (SA)

4. Medisave Account (MA)

 

In general, CPF interest is computed monthly, and will be credited and compounded to your respective accounts yearly.

 

Any excess of the FRS will remain in the OA/SA which the member can apply to withdraw.  

 

There are no restrictions on when a member, age 55 and above, can make the withdrawals throughout the year. Now, they can apply for withdrawal at any time as long as they have the withdrawable monies and the Board will assess their applications.

 

 

 

 

 

 

 

Question: Assuming FRS of $X and MSTU of $(X + Y) including interests. At age 55, can $Y be withdrawn? 

 

No, the top-up monies of $Y cannot be withdrawn as these are meant for recipient’s retirement needs. Hence, the member cannot apply to withdraw the top-up monies:

(a) for payment of education, investments, insurance, housing, etc;

(b) by pledging his property in lieu of the Full FRS; and

(c) via exemption from the Retirement Sum Scheme.

 

Related posts:

1. Retire with a bond and an annuity.

2. CPF MS Top Up and interest computation.

Investing or gardening, be ready to go to war!

Several years ago, I tried to grow cherry tomatoes on my balcony. 

I had three pots and they were all growing well. 

They flowered and eventually I had some fresh cherry tomatoes. 




Unfortunately, the good times didn't last very long because the plants were infested by white flies and eventually died. 

White flies are nasty insects and usually cling to the undersides of leaves in large numbers. 

Once infested by white flies, the fruits from the plants are not safe to eat either. 

Well, the important thing is that I had a lesson in gardening which I remember. 




So, when I decided to renew my efforts at gardening in the last one year, I decided not to grow cherry tomatoes despite suggestions by some people to do so. 

Instead, I decided to grow plants that would ward off all sorts of nasty insects. 

I have a pot of Basil, a pot of Rosemary, a pot of Lemon Balm and two troughs of Catnip. 

These ward off mosquitoes, house flies and other nasties. 

Rosemary.

Basil.

Lemon Balm.

Catnip.

I am also trying to grow Rosemary from seeds. 


Here is a photo taken today:

The one on the right is ahead in the race.

I am also pleased to share that my Alliums have flowered today:

Waiting for them to bloom fully.

Alliums (the onion family) repel many insects, apparently.

I also recently tried to grow some Nasturtiums which are originally from South America. 

The whole plant including the flowers are edible, apparently. 

Peppery in taste or so I read. 

Got the seeds from NTUC Fairprice Xtra.

The main reason for planting Nasturtiums is not for eating although I could try. 

What I really want is their ability to ward off those cherry tomato plant murderers, those white flies!

Today, I see the first Nasturtium seedling emerging from the soil:

Hope the rest of the seedlings follow soon.




Once the Nasturtiums are fully grown, if I should try my hand at growing some cherry tomatoes again, I wouldn't have to fear those nasty white flies!

Whether investors or gardeners, our chances of success would be higher if we are ready for war!

Related posts:
1. Be prepared for war!
2. Life is about many things.

Healthy yogurt costs less than Yami, Yoguru & llaollao.

I have been trying to cut down on sugar but one of the things I like to eat is yogurt which apparently has lots of sugar. You know the type with bits of fruit? I particularly like those with bits of mango.

Although I have been told that natural yogurt is sour, I have not tried it before, well, until today.

On my first attempt a few days ago to get natural yogurt in the neighbourhood supermarket, I could not find any. 

All the yogurt I found had more than 10 grams of sugar per 100g. Most had between 12 grams to 15 grams of sugar. 

If you cannot imagine what that means, Vitagen Less Sugar has about 9 grams of sugar per 100g. Jia Jia Liang Teh Less Sugar has about 5.5 grams of sugar per 100g. 

So, most of the yummy yogurt on the shelves in the supermarkets have relatively more sugar.

Anyway, today, I found this:

4 grams of sugar per 100g. Great!

So, what does it taste like?

OMG! 

It is sour! Sour! SOUR!

Anyway, if you want to try this, I got this from NTUC Fairprice Xtra. It was on special offer. 

Two servings for $2.95 instead of $3.95.

Yup. It costs more than the usual Low Fat or Non Fat yogurt with bits of fruit which I like so much.

Well, I guess this is healthy yogurt and it still isn't as pricey as those frozen yogurt from brands like Yami Yogurt, Yoguru or llaollao which probably have tons of sugar.

(Confession: 
I used to enjoy Yami Yogurt and Yoguru from time to time. I never did try llaollao because it is so expensive.)

My food bill is growing in size! 

That will be another blog post.


Related post:
Life is about many things.

Life is about many things and my time is in short supply (Some of the things I do in retirement).

I have been spending less time blogging and it will probably stay like this for a while more.

The primary reason is that I have become more introspective lately. I have been spending more time meditating, gardening and going back to doing some yoga. I have also been eating differently, following a diet which is very different from what I was used to.

Gardening is a good and inexpensive hobby. Growing plants also means that I am doing my bit for the environment. I fancy myself to be a bit of an environmentalist and recycle whatever I can. 

As with all new hobbies, learning about gardening takes up quite a bit of my time. I am learning new things all the time about plants.
I enjoy spending time in my little outdoor space with my plants. 

In the evening, it is rather calming, especially this time of the year. There is always a cool breeze and with soft lighting, it is a perfect spot for meditation. Before I knew it, I had lost an hour just sitting there. 

Rosemary seedlings.

My planter must be enchanted.

Catnip grows really well from seeds.
Seen here with a solar powered LED light from IKEA.
See: Saving $384 on solar powered LED lights.

As for my new diet, it demands much more attention from me. It is not as convenient as what I was used to. 

So, I end up having to spend more time preparing my own meals, more than before. The selection process is really a learning experience. 

It is hard to have no carbohydrate and no sugar in my diet. The best I can do is to try to have as little carbohydrate and as little sugar as possible. It is about being more careful. 

The results have been encouraging so far and I will probably blog about the initial success of my diet a bit more in a separate blog post.

Tuna, eggs and lettuce.

Oh, I should mention that I have been spending more time visiting doctors, doing check ups and stuff. It is only prudent since I am past 40. 

Frankly, there are certain health issues which probably should have been addressed years ago but I had swept them under the carpet as they were not life threatening (and I didn't want to spend the money, ahem).

For exercise, I continue to take long walks which I do usually in the evenings. I like taking in the sights on such walks. 

Today, I decided to go for a morning walk instead and there were reminders everywhere that Christmas is just round the corner.

As we count our blessings, let us not forget to bring some cheer to the less fortunate. 

Be charitable and remember that true charity does not discriminate amongst the needy.

Related posts:
1. Consider making a donation.
2. Grow a money tree.
3. Something I want to lose.

Use CPF savings or cash to pay for our home?

I remember telling a friend who was disgruntled with the CPF that we don't really have a choice. 

It is like being married and not liking our mother-in-law.

We can kick our mother-in-law in the butt if we divorce our spouse. 

We can kick the CPF in the butt if we give up our citizenship.

Fortunately, I rather like my mother-in-law, er, I mean, the CPF. 

Some might not have mandatory contributions to the CPF for various reasons and might wonder how the CPF fits in their lives?



Here is one example:

Reader:
I accidentally came across your blog only this year, find it very sensible & rational. So, I took few weeks to read all your past articles since Day 1 (I think).

Need your advice or please to talk to yourselves J

I’m a self-employed & have been doing max voluntary contribution to CPF some of the years to service our HDB mortgage through our CPF…

We have no intention to fully pay maybe until when we buy our 2nd property

My question is what is the downside to continue doing VC with the ultimate aim to buy 2nd property using CPF (I’ve set aside the Basic Retirement Sum needed in SA)?

I’m confused on paying back CPF & accrued interests part when & if I were to sell the property

Am I worst off when compare those who bought using Cash???

Awaiting your enlightenment

Thank you J

 

AK:

Welcome to my blog. I am glad you enjoy my muttering and mumbling. ;)

With regards to the CPF, people must remember that it is really meant to help Singaporeans fund our retirement.

For people who do not have sufficient cash on hand or other means, they could use their CPF savings in the OA to help pay for their homes but that is not the primary purpose of the CPF.

However, for people with sufficient cash on hand or other means, especially in an environment of low interest rates, they don't really have to use their CPF savings to purchase their homes. 




They should look at their CPF savings as a back up only to be utilised in case they have to. Well, at least that is how I look at it.

There is an opportunity cost to using our CPF money meant for our retirement to purchase real estate whether for own stay or investment.

I would do VCs to my CPF account if I were self employed because I want some sense of financial security in retirement down the road and not really for anything else.




It is very often a matter of perspective.

How we look at something would determine the way we treat it.

Related posts:

1. Stop interest we owe (CPF) from growing?
2. Proposed changes to the CPF system.
3. Buy the biggest/most expensive home?

Withdrawn CPF money in excess of the Minimum Sum.

If we have planned well, we should be able to meet and even exceed the CPF Minimum Sum when we reach age 55.

If we should exceed the CPF Minimum Sum at age 55, we would be able to withdraw probably much more than a token $5,000 then.

Hi AK

 

Where is the best place to keep the “untouchable” portion of our retirement money (ex-CPF money)

 

Would be delighted to hear you “talk to yourself”

 

Thanks for a great blog

 

R

Hi R,

It would depend on whether it is our only source of retirement funding. If it is our only source of retirement funding, then, we should not take much risk with it. Fixed deposits with promotional interest rates (e.g. 1.8% interest per annum) are safe options.

If we have other sources of retirement funding, then, this could be seen as extra money. Then, it might not be that "untouchable". We could take a bit of risk investing in REITs and dividend paying blue chips then.

We could always opt to buy annuities too, of course.

You might want to search ASSI for the blog post "Is it too late to plan for retirement at age 57?" which was published recently.

I am glad you like my blog. :)

Best wishes,
AK

Related posts:
1. Proposed changes to the CPF system.
2. A lot of money in my CPF-SA...
3. How to upsize $100K to $225K?

Are you new to investing and would like to chat with AK?

• 
  

  
  

  
  

  C: Hi Ak! I previous posted a qns in your blog. 
• Just wonder whether you conduct any fundamental of investment seminar?
• 

  4:03pm
  

  Assi AK
  

  
  

  
  

  Nope but I have had a few chit chat sessions with readers this year. I might organise a few again next year. wink emoticon

  
  
• 4:05p

  
  

  
  

  C: Orh sure keep me in loop. Need your advise is it good to invest in unit trust?

  
  
• 

  4:21pm
  

  Assi AK
  

  
  

  
  

  I will usually blog about such chit chat sessions if I do organise them. So, keep a look out. wink emoticon

  I have avoided unit trusts for a long, long time.

  
  

  
  

  If you do not wish to pick stocks but would like to invest in a basket of stocks, you could consider ETFs.

  
  
• 

  4:22pm
  

  Assi AK
  

  
  

  
  

  http://singaporeanstocksinvestor.blogspot.sg/2013/07/tea-with-matthew-seah-posb-invest-saver.html

  
  

  
  

  

  Tea with Matthew Seah: POSB Invest-Saver Account. | A Singaporean Stocks Investor (ASSI)

  Have a more secure financial future in an uncertain world by creating a stream of reliable passive income with high yields.

  singaporeanstocksinvestor.blogspot.com
• 

  4:22pm
  

  Assi AK
  

  
  

  
  

  http://singaporeanstocksinvestor.blogspot.sg/2013/07/tea-with-matthew-seah-ocbc-blue-chip.html

  
  

  
  

  

  Tea with Matthew Seah: OCBC Blue Chip Investment Plan. | A Singaporean Stocks Investor (ASSI)

  Have a more secure financial future in an uncertain world by creating a stream of reliable passive income with high yields.

  singaporeanstocksinvestor.blogspot.com
• 11/12, 4:24pm
  

  
  
  

  
  

  
  

  C: I have to read up more on ETF. Recently i bought some gold bar hahaha i dont know whether is it a good choice or not

  
  
• 

  4:24pm
  

  Assi AK
  

  
  

  
  

  http://singaporeanstocksinvestor.blogspot.sg/2013/08/tea-with-solace-common-sense-investing.html

  
  

  
  

  

  Tea with Solace: Common Sense Investing. | A Singaporean Stocks Investor (ASSI)

  Have a more secure financial future in an uncertain world by creating a stream of reliable passive income with high yields.

  singaporeanstocksinvestor.blogspot.com
• 

  4:24pm
  

  Assi AK
  

  
  

  
  

  Well, buying physical gold is not an investment per se.

  
  
• 11/12, 4:25pm
  

  
  
  

  
  

  
  

  C: And i so open up account with sgx got the intention to buy saving saving bond. But interest is quite low for 10 years

  
  

  
  

  Hahahaha im waiting for gold price to raise than sell. But however price dropped.

  
  
• 

  4:26pm
  

  Assi AK
  

  
  

  
  

  Well, that is speculation.

  
  

  
  

  I buy physical gold as an insurance.

  
  
• 11/12, 4:27pm
  

  
  
  

  
  

  
  

  C: My friend is a insurance agent introduce me investment link product. Pay 750 for 1 month for 10years.

  
  
• 

  4:27pm
  

  Assi AK
  

  
  

  
  

  http://singaporeanstocksinvestor.blogspot.sg/2012/12/buy-gold-and-silver-as-insurance.html

  
  

  
  

  

  Buy gold and silver as insurance. | A Singaporean Stocks Investor (ASSI)

  Have a more secure financial future in an uncertain world by creating a stream of reliable passive income with high yields.

  singaporeanstocksinvestor.blogspot.com
• 

  4:27pm
  

  Assi AK
  

  
  

  
  

  ILPs? gasp emoticon

  
  

  
  
• 11/12, 4:27pm
  

  
  
  

  
  

  
  

  C: What is that?

  
  

  
  

  paying 750 everymonth than mercier will pick 5 better share to trade something like that

  
  
• 

  4:28pm
  

  Assi AK
  

  
  

  
  

  What your insurance friend is trying to sell to you lor

  
  
• 

  4:28pm
  

  Assi AK
  

  
  

  
  

  http://singaporeanstocksinvestor.blogspot.sg/2014/09/free-investment-linked-policies-or-term.html

  
  

  
  

  

  FREE Investment Linked Policies or Term Life Policies? | A Singaporean Stocks Investor (ASSI)

  Have a more secure financial future in an uncertain world by creating a stream of reliable passive income with high yields.

  singaporeanstocksinvestor.blogspot.com
• 

  4:29pm
  

  Assi AK
  

  
  

  
  

  http://singaporeanstocksinvestor.blogspot.sg/2015/01/should-i-terminate-expensive-ilp-bought.html

  
  

  
  

  

  Should I terminate an expensive ILP bought from a friend? | A Singaporean Stocks Investor (ASSI)

  Have a more secure financial future in an uncertain world by creating a stream of reliable passive income with high yields.

  singaporeanstocksinvestor.blogspot.com
• 

  4:29pm
  

  Assi AK
  

  
  

  
  

  I wouldn't touch ILPs with a 5 feet pole...

  
  
• 11/12, 4:30pm
  

  
  
  

  
  

  
  

  C: Orh. that why i would like to ask for your advise what is the best to invest. Sorry i didt read alot on ur blog because im busy with hospital and home and work

  
  
• 

  4:30pm
  

  Assi AK
  

  
  

  
  

  http://singaporeanstocksinvestor.blogspot.sg/2015/08/real-life-lessons-in-matters-regarding.html

  
  

  
  

  

  Real life lessons in matters regarding insurance. | A Singaporean Stocks Investor (ASSI)

  Have a more secure financial future in an uncertain world by creating a stream of reliable passive income with high yields.

  singaporeanstocksinvestor.blogspot.com
• 4:32pm

  
  

  
  

  C: I have a fix d with uob. Cos interest rate high haha.. matured next year.

  
  
• 

  4:32pm
  

  Assi AK
  

  
  

  
  

  Well, you might want to take full advantage of my blog. Use the "Search" function and it is free of charge. smile emoticon

  
  
• 

  4:33pm
  

  Assi AK
  

  
  

  
  

  http://singaporeanstocksinvestor.blogspot.sg/2015/08/get-most-out-of-assi-as-we-embrace.html

  
  

  
  

  

  Get the most out of ASSI as we embrace financial security. | A Singaporean Stocks Investor (ASSI)

  Have a more secure financial future in an uncertain world by creating a stream of reliable passive income with high yields.

  singaporeanstocksinvestor.blogspot.com
• 

  4:33pm
  

  Assi AK
  

  
  

  
  

  Finally, I don't give advice.

  
  

  
  

  I am just talking to myself.

  
  

  
  

  You have to decide what is best for you. smile emoticon

  
  
• 11/12, 4:34pm
  

  
  
  

  
  

  
  

  C: That is why im rather confuse

  
  

  
  

  Unless i take the risk to invest share than i see the return.

  
  
• 

  4:37pm
  

  Assi AK
  

  
  

  
  

  No rush. Take your time to get educated first. smile emoticon

  
  
• 4:37pm
  

  
  
• 11/12, 4:37pm

  
  

  
  

  C: Is it good to invest bond?

  
  
• 

  4:37pm
  

  Assi AK
  

  
  

  
  

  I have a reading list in my blog. Right side bar near the top.

  
  
• 
  

  
  
• 

  4:40pm
  

  Assi AK
  

  
  

  
  

  OK, I am going to give you some work to do. Go to my blog, go to the top, use the 'SEARCH ASSI' box and type "bonds". wink emoticon

  
  

  
  

  It is a big topic.

  
  
• 
  

  
  
• 

  4:44pm
  

  Assi AK
  

  
  

  
  

  If you want to do what I am doing, you have to remember that it took me 20 years to get to where I am today.

  
  

  
  

  It was a long journey.

  
  

  
  

  I did some trading along the way. I consistently invested for income along the way.

  
  
• 
  
  

  
  
• 

  4:47pm
  

  Assi AK
  

  
  

  
  

  You need to decide how much of your money is definitely untouchable.

  
  

  
  

  You should not use money you might need in short notice for investing

  
  

  
  

  Then, whatever money you feel you might not need in the next 5 years, you can invest

  
  

  
  

  Don't be too adventurous. Invest in strong companies.

  
  

  
  

  They must also pay regular dividends.

  
  

  
  

  Since you want some income from your investment.

  
  
• 11/12, 4:51pm
  

  
  
  

  
  

  
  

  C: 5 years too long i might not be able to live that long 2-3years can or not?

  
  
• 

  4:51pm
  

  Assi AK
  

  
  

  
  

  Then, frankly, you are a poor candidate for an investor. 5 years is very short already.

  
  
• 11/12, 4:52pm
  

  
  
  

  
  

  
  

  C: .. ok something new to me.

  
  
• 

  4:53pm
  

  Assi AK
  

  
  

  
  

  Investing is a long term process.

  
  

  
  

  5 years is short. My journey has been 20 years so far.

  
  
• 
  
• 

  4:55pm
  

  Assi AK
  

  
  

  
  

  http://singaporeanstocksinvestor.blogspot.sg/2015/06/how-did-ste-who-is-married-with.html

  
  

  
  

  

  How did STE who is married with children retire at age 44? | A Singaporean Stocks Investor (ASSI)

  Have a more secure financial future in an uncertain world by creating a stream of reliable passive income with high yields.

  singaporeanstocksinvestor.blogspot.com

Related posts:
1. How much we have in our emergency fund?

2. The secret to AK's success as an investor.