tag:blogger.com,1999:blog-3276688108456391559.post3641727591557133669..comments2019-09-23T14:24:02.308+08:00Comments on SG Young Investment: Will we have enough CPF savings to retire on after using it for housing?SGYIhttp://www.blogger.com/profile/09445517891969740960noreply@blogger.comBlogger23125tag:blogger.com,1999:blog-3276688108456391559.post-48052725699308052692015-07-23T14:19:51.245+08:002015-07-23T14:19:51.245+08:00The CPF is only fully used up when the buyer appli...The CPF is only fully used up when the buyer applies for a HDB loan. The information has always been available on the HDB website at http://www.hdb.gov.sg/fi10/fi10321p.nsf/w/HLHDBWhat?OpenDocument. Please refer to the portion "Use of All CPF Savings".HDBhttp://www.hdb.gov.sg/fi10/fi10321p.nsf/w/HLHDBWhat?OpenDocumentnoreply@blogger.comtag:blogger.com,1999:blog-3276688108456391559.post-72621798945927664412014-08-03T07:55:13.232+08:002014-08-03T07:55:13.232+08:00There are no source links on the cpf wipe out thin...There are no source links on the cpf wipe out thing. It is from experience of friends who told me this. You can find on forums that people are talking about this too. <br /><br />Yes the wipe out figure goes into the payment of the loan. So the actual loan amount becomes smaller as you already paid a lump sum in. That is also why I estimated a lower monthly installment of $550 after factoring in that cpf oa is wiped out when purchasing a house. SGYIhttps://www.blogger.com/profile/09445517891969740960noreply@blogger.comtag:blogger.com,1999:blog-3276688108456391559.post-66479665654912240142014-08-02T23:02:45.278+08:002014-08-02T23:02:45.278+08:00Whoa this is the first time I'm hearing this h...Whoa this is the first time I'm hearing this haha. Sorry, I've never bought a HDB flat before so I'm not well versed in this area. Definitely reading and learning so that I can understand better though. Any source links from HDB or any official links for me to read up on the above matter about CPF being wiped out regardless of the downpayment, installment or remaining amount in the CPF OA? <br /><br />So if it's wiped out, where does it go to? Does it go to pay off the principal of the loan? Ok let's assume the person above has 100k in his CPF OA when he's 27 years old which is also the year he paid for his 1st installment. Assuming all things remain equal, i.e. loan amount = 252k, loan tenure = 25 years and interest rate = 2.6%, how much must he pay then for the loan? It can't still be $571.63/mth for 25 years right? I mean the 100k has to go somewhere. It can't just disappear into thin air lol.<br /><br />Btw, thanks a lot for helping me clarify all my enquiries!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3276688108456391559.post-7395016093187614682014-08-02T07:57:49.677+08:002014-08-02T07:57:49.677+08:00Oh no. Cpf is wiped out regardless of the downpaym...Oh no. Cpf is wiped out regardless of the downpayment or installment. If you have 100k in your cpf OA account, all will be wiped out also. Then the rest is considered as housing loan. SGYIhttps://www.blogger.com/profile/09445517891969740960noreply@blogger.comtag:blogger.com,1999:blog-3276688108456391559.post-38287182675175866972014-08-02T00:23:08.093+08:002014-08-02T00:23:08.093+08:00Ahhh it's a rounded figure. I see...
So basi...Ahhh it's a rounded figure. I see... <br /><br />So basically, the CPF OA is wiped out because of the 10% down payment (10% * 280k = 28k. Divided by 2 = 14k) plus the first installment ($6,859.50) (i.e. 14,000 + 6,859.50 = 20,859.50) or is it just the 10% down payment alone? Because if it's the down payment only, then the first installment will only be paid when he's 28 and not 27. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3276688108456391559.post-11298824523024545762014-08-01T08:35:24.258+08:002014-08-01T08:35:24.258+08:00Hi,
The monthly loan is an estimated figure. I pu...Hi,<br /><br />The monthly loan is an estimated figure. I put $550 as a round figure and to take into consideration that CPF OA is wiped out then the remaining is factored in for the monthly loans. <br /><br />CPF OA is always wiped out when we first buy our house. One lump sum will be paid then the rest is considered into your housing loan. SGYIhttps://www.blogger.com/profile/09445517891969740960noreply@blogger.comtag:blogger.com,1999:blog-3276688108456391559.post-12757890951035403972014-08-01T02:41:33.774+08:002014-08-01T02:41:33.774+08:00Hi,
Great effort in computing the excel sheet! I ...Hi,<br /><br />Great effort in computing the excel sheet! I am also currently making my own spreadsheet based on the data provided above just to cross check the figures. Firstly, how did you get the housing loan of $550 per person? Based on the data above, loan amount = $252k, loan tenure is 25 years and interest rate is 2.6%. Given this data, the monthly installment is $1,143.25 based on my calculations. Divide that by 2 and each person would need to fork out about $571.63.<br /><br />In addition, can you kindly explain to me why his CPF OA is wiped out when he pays for the first installment? His OA is $17,181.00 + $601.34 <br />(Interest) = $17,782.34 when he's 26 years old and his first installment would be ($1,143.25/mth * 12 mths) divided by 2 which equals to $6,859.50. Shouldn't he be left with $17,782.34 - $6,859.50 = $10,922.84?<br /><br />Thank you!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3276688108456391559.post-59193330642846574432014-07-27T08:17:04.312+08:002014-07-27T08:17:04.312+08:00Hi,
You're welcomed. Have a great weekend ahe...Hi,<br /><br />You're welcomed. Have a great weekend ahead :)SGYIhttps://www.blogger.com/profile/09445517891969740960noreply@blogger.comtag:blogger.com,1999:blog-3276688108456391559.post-33563943128837052932014-07-27T00:00:10.526+08:002014-07-27T00:00:10.526+08:00Thanks for the reply and all the best to your blog...Thanks for the reply and all the best to your blog and journey to financial freedom! Will continue reading your blog as it's very informative. Cheers!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3276688108456391559.post-29601236955938739812014-07-25T07:06:17.846+08:002014-07-25T07:06:17.846+08:00Hi,
You're right. CPF is for retirement only....Hi,<br /><br />You're right. CPF is for retirement only. We still need a portion of our own private savings for rainy days in case we lose oir jobs. CPF also may not be enough for most people as most of us use a big portion of it for housing. In this case, we should also have our own seperate savings for retirement. SGYIhttps://www.blogger.com/profile/09445517891969740960noreply@blogger.comtag:blogger.com,1999:blog-3276688108456391559.post-31751792406722021492014-07-25T00:39:10.761+08:002014-07-25T00:39:10.761+08:00Hello, this may be a dumb question - can CPF deduc...Hello, this may be a dumb question - can CPF deductions be considered as savings as big part of salary goes into it? Of course, it's more prudent to have cash savings on your own as it's accessible and liquid. Is that correct?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3276688108456391559.post-40350368966019698622014-07-22T09:13:38.468+08:002014-07-22T09:13:38.468+08:00Hi,
Sure. Just email me and I can share with you ...Hi,<br /><br />Sure. Just email me and I can share with you through email. SGYIhttps://www.blogger.com/profile/09445517891969740960noreply@blogger.comtag:blogger.com,1999:blog-3276688108456391559.post-73506730531783750092014-07-21T21:58:02.697+08:002014-07-21T21:58:02.697+08:00Hi, would it be possible to have the excel spreads...Hi, would it be possible to have the excel spreadsheet? =) I like to play with the property price. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3276688108456391559.post-22297833446404909002014-07-19T15:48:06.360+08:002014-07-19T15:48:06.360+08:00Hi Chan Yuan,
Another way to look at it is if you...Hi Chan Yuan,<br /><br />Another way to look at it is if you use more money to buy a bigger flat now, you can sell it later and buy a smaller flat when you reach retirement age. That will also give you more money for retirement. The only thing is not to overstretch ourselves when buying a house that in the event we lose our job, we can't continue paying the instalment. SGYIhttps://www.blogger.com/profile/09445517891969740960noreply@blogger.comtag:blogger.com,1999:blog-3276688108456391559.post-10813894295432882642014-07-19T15:07:20.946+08:002014-07-19T15:07:20.946+08:00By the way, nice projections of CPF figures. After...By the way, nice projections of CPF figures. After reading this article, I realize if I want to meet the 2 CPF min sums at 55, a 4rm BTO flat is a way to go. If i purchase a 5rm BTO flat which would cost $340,000, I will fall short of the CPF min sumsChan Yuanhttps://www.blogger.com/profile/12611026055011755624noreply@blogger.comtag:blogger.com,1999:blog-3276688108456391559.post-3221474669645076182014-07-19T14:18:15.951+08:002014-07-19T14:18:15.951+08:00Hi 15HWW,
Yup there is a limit to how much we can...Hi 15HWW,<br /><br />Yup there is a limit to how much we can put into CPF. It's true that someone with $2000 salary should start off with a smaller flat which would be a 3 room HDB flat. Or maybe buy the flat at a later stage when he has worked for a number of years. SGYIhttps://www.blogger.com/profile/09445517891969740960noreply@blogger.comtag:blogger.com,1999:blog-3276688108456391559.post-73085744282489163062014-07-19T14:14:28.589+08:002014-07-19T14:14:28.589+08:00Hi,
Yes, the interest rate of 2.6% is included in...Hi,<br /><br />Yes, the interest rate of 2.6% is included in the loan payment amount. It works out to be $1100 which is about $550 per person supposing husband and wife pay 50-50. SGYIhttps://www.blogger.com/profile/09445517891969740960noreply@blogger.comtag:blogger.com,1999:blog-3276688108456391559.post-76494854371752783302014-07-19T14:12:36.244+08:002014-07-19T14:12:36.244+08:00Hi Chan Yuan,
You're right on the medisave mi...Hi Chan Yuan,<br /><br />You're right on the medisave minimum sum. For this, we can just deduct straight from the total amount and put it back into the medisave account. If MMS is $122,000, the individual earning $3000 at age 25 would have $548,854.22 at age 55 in his OA and SA combined.SGYIhttps://www.blogger.com/profile/09445517891969740960noreply@blogger.comtag:blogger.com,1999:blog-3276688108456391559.post-38215077965621063182014-07-19T10:50:02.105+08:002014-07-19T10:50:02.105+08:00Hi SGYI,
Think you put in quite a bit of homework...Hi SGYI,<br /><br />Think you put in quite a bit of homework to come up with this post and kudos to you!<br /><br />CPF was always meant to provide for a basic retirement. It's also interesting to note that there are people who wish to put more in the CPF Minimum Sum but are unable to. <br /><br />From your calculations it also appears that someone earning $2000 should start off with a smaller flat if he is relying on CPF solely for retirement. My 15HWWhttp://www.my15hourworkweek.comnoreply@blogger.comtag:blogger.com,1999:blog-3276688108456391559.post-89943642169613210632014-07-19T10:26:30.966+08:002014-07-19T10:26:30.966+08:00Informative article! I wonder though if you did in...Informative article! I wonder though if you did include HDB interest rates into the loan payment amount? Thanks!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3276688108456391559.post-44115233543072221042014-07-19T09:14:42.026+08:002014-07-19T09:14:42.026+08:00One point to note in your assumptions is that the ...One point to note in your assumptions is that the CPF min sum for medisave will also increase over time due to inflation. Using your above assumptions and assuming a 3% inflation p.a, 30 years from now, the medisave min sum will be $122,000. This means the individual earning $3000 at age 25, will only be able to transfer much less to fund his OA+SA Balance.<br /><br />Maybe you can do a slight edit to your post to reflect it?<br />2)Chan Yuanhttps://www.blogger.com/profile/12611026055011755624noreply@blogger.comtag:blogger.com,1999:blog-3276688108456391559.post-5175497194177035732014-07-19T08:53:28.078+08:002014-07-19T08:53:28.078+08:00Hi Uncle CW,
Good advice. Earning higher income d...Hi Uncle CW,<br /><br />Good advice. Earning higher income does make a difference.SGYIhttps://www.blogger.com/profile/09445517891969740960noreply@blogger.comtag:blogger.com,1999:blog-3276688108456391559.post-55397648822167951922014-07-19T07:29:58.389+08:002014-07-19T07:29:58.389+08:00Earn progressive higher income over our lifetime o...Earn progressive higher income over our lifetime or invest for growth-dividends stocks to create weath; otherwise it is very tough for average employees to retire at 60s with retirement income for life goal.Createwealth8888https://www.blogger.com/profile/08563834016250153049noreply@blogger.com