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Old 06-06-2014, 04:49 PM
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Hi,
My husband and I are 28, 26 respectively with a combined income of 9k. We have no debt and a cash/asset position of $140k ($100k currently in OCBC 365 account earning 3.05%), $40k in low / medium risk equity.
We would be getting our BTO flat in 2016 and would need to start servicing a $500k loan.
We intend to save up $300k in cash position by 2021, by which our flat would have reach MOP and we could use that cash as a downpayment for our investment property. We budgeted $50k for renovation and furnishing, and does not have any debts currently.
We intend to take a 25 years HDB loan, and dump all our CPF OA into SA so that HDB cannot wipe out our OA for downpayment of the flat, and let our SA earn 4% interest. This effectively negates the 2.6% HDB loan interest. Our monthly OA contribution would be more than sufficient to pay for the monthly instalment. Whatever residue OA will go into SA. By doing so, we would build up quite a substantial SA, purely for retirement. Our salary goes towards household expenses, parents and savings towards the $300k goal. After 2021, we would purchase an investment property and use the rental yield to support the instalment on that property.
Please share your views on our strategy, especially the dumping of the entire OA into SA, as it is a irreversible process



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