tag:blogger.com,1999:blog-3276688108456391559.post8600754211293683752..comments2024-02-27T13:41:46.698+08:00Comments on SG Young Investment: Should We Use All Our CPF for Housing or Save It for Retirement?SGYIhttp://www.blogger.com/profile/09445517891969740960noreply@blogger.comBlogger26125tag:blogger.com,1999:blog-3276688108456391559.post-11162035809961467782017-05-09T23:53:02.098+08:002017-05-09T23:53:02.098+08:00Hi,
You can consider to choose to take a small po...Hi,<br /><br />You can consider to choose to take a small portion of loan with interest lesser than 2.5% so the remaining balance in your OA still earns the 2.5% interest. When interest rates goes above 2.5%, then you can pay down all the loans. SGYIhttps://www.blogger.com/profile/09445517891969740960noreply@blogger.comtag:blogger.com,1999:blog-3276688108456391559.post-67679240587040969732017-05-09T17:24:35.554+08:002017-05-09T17:24:35.554+08:00My spouse and I bought a BTO flat. Our CPF is suff...My spouse and I bought a BTO flat. Our CPF is sufficient to pay the new flat in full, almost clearing all in OA. Is it advisable? Both working and in early 50's. ThanksCurioushttps://www.blogger.com/profile/07881034950503875296noreply@blogger.comtag:blogger.com,1999:blog-3276688108456391559.post-70537107569682362512016-08-31T16:57:59.514+08:002016-08-31T16:57:59.514+08:00Many thanks on the clarification.Many thanks on the clarification.BKnoreply@blogger.comtag:blogger.com,1999:blog-3276688108456391559.post-61487577432469946302016-08-31T14:15:57.573+08:002016-08-31T14:15:57.573+08:00Hi BK,
From what i know, your CPFIS will not be w...Hi BK,<br /><br />From what i know, your CPFIS will not be wiped out if you choose to invest your CPF OA. That's what a lot of people do too. SGYIhttps://www.blogger.com/profile/09445517891969740960noreply@blogger.comtag:blogger.com,1999:blog-3276688108456391559.post-19464106370573285462016-08-31T12:27:59.208+08:002016-08-31T12:27:59.208+08:00I have been planning to balance by perhaps taking ...I have been planning to balance by perhaps taking 10% of the OA to do a CPFIS- OA investment while maintaining the rest to asssist in buying a house in a years time. I would like to find out what happens after a year, Can I still continue to keep the investment running while buying the house or if I decide to buy the house, then ALL the CPF OA including the CPFIS OA gets wiped up?<br /><br />Is it an either or for investment and property? I can't find any clear information on that portion.<br /><br />For example 70k in the OA of which I would like to set aside some 10k for the investment portion, leaving 60k to pay for downnpayment of a house, assuming its 300k followed by monthly contribution for 30 yrs.<br /><br />Can the 10K remain separately as part of my investment without getting wiped out?BKnoreply@blogger.comtag:blogger.com,1999:blog-3276688108456391559.post-68652852141340758512016-06-30T20:21:31.076+08:002016-06-30T20:21:31.076+08:00Hi Cassie,
As per my reply to another comment abo...Hi Cassie,<br /><br />As per my reply to another comment above, you can calculate whether you will have enough for retirement when you reach 55. Most importantly you still need some cash if you want to retire at age 55 else if you can't take out your CPF at age 55 because you don't have more than the basic retirement sum, you'll have to find other ways till age 65 where you will get monthly cash from CPF then.SGYIhttps://www.blogger.com/profile/09445517891969740960noreply@blogger.comtag:blogger.com,1999:blog-3276688108456391559.post-28097551730815486852016-06-30T20:20:47.067+08:002016-06-30T20:20:47.067+08:00Hi,
For CPF money when you reach 55, the basic re...Hi,<br /><br />For CPF money when you reach 55, the basic retirement sum will increase every year. It is about 3% which caters to the inflation rate. You can calculate whether you will have enough for retirement when you reach 55. Most importantly you still need some cash if you want to retire at age 55 else if you can't take out your CPF at age 55 because you don't have more than the basic retirement sum, you'll have to find other ways till age 65 where you will get monthly cash from CPF then. SGYIhttps://www.blogger.com/profile/09445517891969740960noreply@blogger.comtag:blogger.com,1999:blog-3276688108456391559.post-18323435921951821092016-06-30T00:00:57.832+08:002016-06-30T00:00:57.832+08:00Thanks for the article. I am deciding whether to ...Thanks for the article. I am deciding whether to use my CPF monies or cash to pay for my resale flat. My main concern is whether I will be able to get my CPF monies easily when I reach 55 in ten years time.Cassie Oreohttps://www.blogger.com/profile/08371526356737999286noreply@blogger.comtag:blogger.com,1999:blog-3276688108456391559.post-11609026955977018122016-06-29T23:58:14.454+08:002016-06-29T23:58:14.454+08:00Timely reminder indeed SGYI. I am just considerin...Timely reminder indeed SGYI. I am just considering whether I should use cash to pay for my resale flat or use my CPF OA. My lawyer just reminded me that I can let my CPF monies earn the interest and pay by cash instead. My main concern is whether I will be able to take out my CPF money easily when I reach 55 in ten year's time.Cassie Oreohttps://www.blogger.com/profile/08371526356737999286noreply@blogger.comtag:blogger.com,1999:blog-3276688108456391559.post-59774194249351423582016-02-17T09:10:15.935+08:002016-02-17T09:10:15.935+08:00Hi Mao Mao,
We should plan out in a way that we h...Hi Mao Mao,<br /><br />We should plan out in a way that we have enough for our daily living and enough for retirement as well. Balance is the key to financial planning. SGYIhttps://www.blogger.com/profile/09445517891969740960noreply@blogger.comtag:blogger.com,1999:blog-3276688108456391559.post-71795718513818536192016-02-15T22:17:48.133+08:002016-02-15T22:17:48.133+08:00The story is rosy when the assumption is that both...The story is rosy when the assumption is that both husband and wife are salaried workers with monthly CPF contributions. It does not pan well for single income family as the sole breadwinner's CPF OA gets reduced to $0 every month and needs to top-up additional cash to service the housing loan. This is an example how early transferring from OA to SA could be disastrous. The key point is to reduce + complete paying for the housing loan as soon as possible.Mao Maohttps://www.blogger.com/profile/10325600231229140321noreply@blogger.comtag:blogger.com,1999:blog-3276688108456391559.post-83444819842572758142016-02-05T10:06:19.144+08:002016-02-05T10:06:19.144+08:00Hi,
The money in your SA can grow as long as you ...Hi,<br /><br />The money in your SA can grow as long as you live. If you do not take out the money in your SA when you're 55 years old, the money inside still earns the same interest. For 20 years, yes the amount will be lower than $205K. SGYIhttps://www.blogger.com/profile/09445517891969740960noreply@blogger.comtag:blogger.com,1999:blog-3276688108456391559.post-2889861974208397302016-02-03T14:35:24.804+08:002016-02-03T14:35:24.804+08:00Hi SGYI,
I agree fully with you on the mix. Now ...Hi SGYI, <br /><br />I agree fully with you on the mix. Now I have to figure out how much exactly is the percentage of the mix. hmm.. Cheers!derrickhttps://www.blogger.com/profile/06652594269721438505noreply@blogger.comtag:blogger.com,1999:blog-3276688108456391559.post-11963049727425543972016-02-03T13:12:21.103+08:002016-02-03T13:12:21.103+08:00If I am 35 this year, technically my $50K in SA ca...If I am 35 this year, technically my $50K in SA can only grow till 20 years later right (55yrs old)? which is lower than the $205K projected? pardon my ignorance.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3276688108456391559.post-3473032713028506382016-02-02T09:05:20.418+08:002016-02-02T09:05:20.418+08:00Hi derrick,
I think we should have a mix of both....Hi derrick,<br /><br />I think we should have a mix of both. To acquire some in our CPF and at the same time learn to invest our own money. I would rather invest cash than my cpf money. Like what I wrote in the article, $50,000 will grow to about $205,000 in 30 years time. Its not hard to accumulate $50,000 in SA as early as possible. <br /><br />We should leave enough money in our OA to pay for housing. We don't want to end up in a scenario where we have to use cash for housing then have problems living our lives later too. SGYIhttps://www.blogger.com/profile/09445517891969740960noreply@blogger.comtag:blogger.com,1999:blog-3276688108456391559.post-56168182191159844282016-02-02T08:52:19.419+08:002016-02-02T08:52:19.419+08:00Hi SGYI,
I've spoken to a friend, he also me...Hi SGYI, <br /><br />I've spoken to a friend, he also mentioned that SA is a safe risk free investment, the accrued interest is crazy and probably could accumulate up to half a million when you retire. <br /><br />But one main question comes to my mind now, why would you want to have 500k in your bank at age of 55 for? If you haven started on investment of any kind early, it would have been too late to acquire or learn. The important milestone of your life with requires huge sum of money is already over. So the money just sits there until you die. <br /><br />Let's look at another scenario, you invest in CPFIS, it gives you a decent interest, it pays off your housing loan earlier, and you don't have to pump in any cash to support your HLE loan (some people pump everything into SA thus causing them to have to repay house loan using cash), and you have more cash at your disposal. The money could then be use for other passive investment. <br /><br />What do you think? cheers. derrickhttps://www.blogger.com/profile/06652594269721438505noreply@blogger.comtag:blogger.com,1999:blog-3276688108456391559.post-58020640396641763732016-01-31T21:33:28.807+08:002016-01-31T21:33:28.807+08:00Hi derrick,
If the family is considering getting ...Hi derrick,<br /><br />If the family is considering getting a 2nd property, then its better to leave some money in the OA for the purchase of the property. Nevertheless, its important to set aside money for retirement. We don't want to be asset rich and cash poor later. SGYIhttps://www.blogger.com/profile/09445517891969740960noreply@blogger.comtag:blogger.com,1999:blog-3276688108456391559.post-74003429810639321832016-01-31T19:28:00.045+08:002016-01-31T19:28:00.045+08:00Hi SGYI, thanks for the reply. I agree that this w...Hi SGYI, thanks for the reply. I agree that this will significantly increase the interest rate for such a safe investment. But would you agree that this method wouldn't be feasible if the family is considering getting a 2nd purchase of property? Thanks! derrickhttps://www.blogger.com/profile/06652594269721438505noreply@blogger.comtag:blogger.com,1999:blog-3276688108456391559.post-46954607975846112602016-01-31T18:02:38.245+08:002016-01-31T18:02:38.245+08:00HI PassivePeon,
In a way you're right that th...HI PassivePeon,<br /><br />In a way you're right that the actual returns will be lower. But I would think that paying for a house and putting money in SA for retirement is different. The house we pay for does still appreciate in value so the interest paid may not be that much of a concern. SGYIhttps://www.blogger.com/profile/09445517891969740960noreply@blogger.comtag:blogger.com,1999:blog-3276688108456391559.post-20643874088828346252016-01-31T15:13:12.885+08:002016-01-31T15:13:12.885+08:00Hi SGYI,
Very timely reminder for me to do the tr...Hi SGYI,<br /><br />Very timely reminder for me to do the transfer to SA seeing that I'm able to get my HDB nest soon.<br /><br />Thanks!<br /><br />Anyway, just a quick question. Wouldn't the actual returns be lower since we still gotta subtract the interest we pay for our housing loan(2.6% if we are taking HDB loan)?<br /><br />If we are taking the HDB loan, our actual returns will only be 2.4% right? Since we have to subtract 2.6% from 5% (4% SA + 1% additional for balance below $60k).<br /><br />Cheers😊PassivePeonhttps://www.blogger.com/profile/08954910873811996081noreply@blogger.comtag:blogger.com,1999:blog-3276688108456391559.post-10970573358130508622016-01-28T21:49:40.684+08:002016-01-28T21:49:40.684+08:00Hi Lakota,
Yes we can do it this way. We will def...Hi Lakota,<br /><br />Yes we can do it this way. We will definitely have more money in our SA as compared to another person who use everything in his OA to pay for housing. SGYIhttps://www.blogger.com/profile/09445517891969740960noreply@blogger.comtag:blogger.com,1999:blog-3276688108456391559.post-6497243935228001492016-01-28T21:48:30.632+08:002016-01-28T21:48:30.632+08:00Hi B,
I've heard before to grow our retiremen...Hi B,<br /><br />I've heard before to grow our retirement savings, the best is to max out our SA as early as possible. 4-5% compounded at a young age for many years can reach quite a significant sum for our retirement. SGYIhttps://www.blogger.com/profile/09445517891969740960noreply@blogger.comtag:blogger.com,1999:blog-3276688108456391559.post-44237774835904553442016-01-28T21:19:48.902+08:002016-01-28T21:19:48.902+08:00so let me understand this correctly.
1. When buyin...so let me understand this correctly.<br />1. When buying a flat, apply for HDB Loan.<br />2. Ensure the combined OA accounts of both applicants is sufficient to meet the 10% down payment.<br />3. Transfer everything else to SA to earn extra interest.<br />4. Pay off the monthly mortgage using the monthly CPF contribution + cash if there is a shortfall.Lakotahttps://www.blogger.com/profile/15524991181883170867noreply@blogger.comtag:blogger.com,1999:blog-3276688108456391559.post-8851993339279961552016-01-28T20:52:18.039+08:002016-01-28T20:52:18.039+08:00Hi SGYI
It's interesting to always think abou...Hi SGYI<br /><br />It's interesting to always think about whether using the CPF to pay down those housing or leave it inside to earn that risk free rate.<br /><br />For me, my preference would be definitely not touching the cash to repay the housing but as far as using the cpf to do so, I have not thought to that level yet.Bhttps://www.blogger.com/profile/09041255778427742477noreply@blogger.comtag:blogger.com,1999:blog-3276688108456391559.post-21976669134560133442016-01-28T17:13:02.772+08:002016-01-28T17:13:02.772+08:00Hi derrick,
Yes we can invest our CPF OA in CPFIS...Hi derrick,<br /><br />Yes we can invest our CPF OA in CPFIS. However, we have to always know we are risking the 2.5-3.5% interest. There is always a risk in investment while the interest in our cpf is given to us risk free. SGYIhttps://www.blogger.com/profile/09445517891969740960noreply@blogger.com