How much are you earning per annum?

I think many people would be incredulous if you tell them that you have $1m in your CPF (total of OA, SA, MA and RA).

As i will be 55 soon, I checked my CPF accounts and was pleasantly surprised it crossed $1m total, with my MA maxed at $48,500 and SA at $218k.

So it is possible to accumulate $1m or perhaps more in your CPF accounts over a lifetime of employment. The current annual contribution limit that a person can put into CPF is $31,450. So if that person works over 30 years and contributes $31.45k pa into his CPF, he will accumulate $1m (with interest of 3% average from CPF).

Of course, the amount will be lower if you use your CPF money to pay for your housing.

For my case, I did 2 things to boost my CPF amount. One was to top up my SA to the max allowed in the early days and let it compound at 4-5% annually - for many years already. The second thing I did was to return money into CPF account - the money that I used to buy my property when I was younger.

I think CPF is a solid standby option with reasonable interest returns and you can draw out the interest to spend upon reaching 55 yo.

We sold our flat and bought our condo in 2003. We managed to pay off the mortgage last year. We own a 3 year old car with some loan left. Currently we earn a total income of $150k pa. We are now 50 and 51 year old. Our total net worth is $1.6m. Are we doing well among our peers? What can we do to prepare for retirement? CPF Life is a source of income when we retire. What else can we do to get more income when we retire? Should we downgrade to a smaller condo?

Don't say I say, if I were in your shoes, I would have gone for an EC first since with a HH income of $150k, it still qualifies for EC and subsidy from government (minus your bonus)

If say you spend $50k pa in your retirement, to sustain 20 years in retirement you will need minimally $1m (not counting inflation). And if 30 years in retirement you will need $1.5m.

$50k pa for a couple will provide a no-frills retirement. Definitely no car, no maid and no holidays to Ang Moh countries.

But whatever you do, don't retire too early. Work till 60 if you can.

Originally Posted by Unregistered

We sold our flat and bought our condo in 2003. We managed to pay off the mortgage last year. We own a 3 year old car with some loan left. Currently we earn a total income of $150k pa. We are now 50 and 51 year old. Our total net worth is $1.6m. Are we doing well among our peers? What can we do to prepare for retirement? CPF Life is a source of income when we retire. What else can we do to get more income when we retire? Should we downgrade to a smaller condo?

[lazyplane]

wow. i learnt something from this post.. i didnt know SA got cap at 218k

Originally Posted by Unregistered

I think many people would be incredulous if you tell them that you have $1m in your CPF (total of OA, SA, MA and RA).

As i will be 55 soon, I checked my CPF accounts and was pleasantly surprised it crossed $1m total, with my MA maxed at $48,500 and SA at $218k.

So it is possible to accumulate $1m or perhaps more in your CPF accounts over a lifetime of employment. The current annual contribution limit that a person can put into CPF is $31,450. So if that person works over 30 years and contributes $31.45k pa into his CPF, he will accumulate $1m (with interest of 3% average from CPF).

Of course, the amount will be lower if you use your CPF money to pay for your housing.

For my case, I did 2 things to boost my CPF amount. One was to top up my SA to the max allowed in the early days and let it compound at 4-5% annually - for many years already. The second thing I did was to return money into CPF account - the money that I used to buy my property when I was younger.

I think CPF is a solid standby option with reasonable interest returns and you can draw out the interest to spend upon reaching 55 yo.

Originally Posted by Unregistered

We sold our flat and bought our condo in 2003. We managed to pay off the mortgage last year. We own a 3 year old car with some loan left. Currently we earn a total income of $150k pa. We are now 50 and 51 year old. Our total net worth is $1.6m. Are we doing well among our peers? What can we do to prepare for retirement? CPF Life is a source of income when we retire. What else can we do to get more income when we retire? Should we downgrade to a smaller condo?

You can retire at the age of 55. You can sell your condo and move to a one bedroom condo. With the extra cash and savings, you can spend $60k pa for 10 years for you and spouse. Your kids will give you $1k pm so you can save $12k pa. At 65, you will get $3500 pm from CPF Life Enhanced scheme and so your passive income will be $54k pa. Get a condo next to an MRT station as well as amenities and conveniences so that you don't need a car. Since your condo is smaller, you don't need to employ a maid. You and spouse can do the simple household chores together. This saves money and good exercise for both of you. Don't be lazy.

I will turn a blind eye to the implied sarcasm here and treat it that you are ignorant. I dont mind sharing info with people who are genuinely not fully aware, but I dont normally tolerate people who know little but act like they know everything.

The SA cap is currently at $161K (as of Jul 2015).

The thing is about SA is that even when a person reaches this limit, CPF Board will still allocate part of your monthly CPF contributions to the SA. And they also retain the interest earned in the SA every year in the SA! So if you have topped up your SA like I did years ago, your SA amount will always exceed the new annual limit. And as the years go by, because of the compounding interest, the margin grows larger and larger.

On the other hand, they dont do this for the MA. Once the MA reaches the contribution limit, they stop taking your money.

Originally Posted by lazyplane

wow. i learnt something from this post.. i didnt know SA got cap at 218k

Hi,

I understand the magic of compounding interest from SA and benefit of topping up SA to gain from tax rebate.

I am 43yo, currently OA: $59.6K, SA: $165.8K, MA: $48.5K. I am still using my OA to service my HDB which has balance outstanding of $103.5K.

As I have hit the MS SA limit and would not able to top up further from this year onwards (CPF typically increase MS SA by $6-$7K, my SA and contribution interest would have exceeded the yearly increase), may I ask how do you return the money from property to your OA account?

Did you sell your property and subsequently purchase your property in cash, or downgrade to a smaller property and paid in full?

Should I repay my current outstanding loan of $103.5K by cash instead from deduction from OA?

Thanks for sharing your tips and I am looking forward to CPF money standby for my retirement.

Originally Posted by Unregistered

I think many people would be incredulous if you tell them that you have $1m in your CPF (total of OA, SA, MA and RA).

As i will be 55 soon, I checked my CPF accounts and was pleasantly surprised it crossed $1m total, with my MA maxed at $48,500 and SA at $218k.

So it is possible to accumulate $1m or perhaps more in your CPF accounts over a lifetime of employment. The current annual contribution limit that a person can put into CPF is $31,450. So if that person works over 30 years and contributes $31.45k pa into his CPF, he will accumulate $1m (with interest of 3% average from CPF).

Of course, the amount will be lower if you use your CPF money to pay for your housing.

For my case, I did 2 things to boost my CPF amount. One was to top up my SA to the max allowed in the early days and let it compound at 4-5% annually - for many years already. The second thing I did was to return money into CPF account - the money that I used to buy my property when I was younger.

I think CPF is a solid standby option with reasonable interest returns and you can draw out the interest to spend upon reaching 55 yo.

[lazyplane]

Dear Unregistered,

I didnt post with the implied sarcasm that you think i did.

But now , i am offended that you think everyone is ignorant.

As you mentioned in your post (if you are re-reading it), it is possible for people to read your post as saying there is a cap of SA at 218k and i was just pointing to you that i didnt know there is a such cap at 218k for SA

I am aware of the SA cap in terms of contribution from OA or cash top up is at the full retirement sum and the stuff u wrote below.

In fact, you seem to be ignorant that SA cap is calculated less of the SA that is invested. If you have invested your SA say by 50% in stock etc, then your SA cap doesnt apply and you can continue to put monies into it. And when u cash it out, it is even more.

Go check it out !

Originally Posted by Unregistered

I will turn a blind eye to the implied sarcasm here and treat it that you are ignorant. I dont mind sharing info with people who are genuinely not fully aware, but I dont normally tolerate people who know little but act like they know everything.

The SA cap is currently at $161K (as of Jul 2015).

The thing is about SA is that even when a person reaches this limit, CPF Board will still allocate part of your monthly CPF contributions to the SA. And they also retain the interest earned in the SA every year in the SA! So if you have topped up your SA like I did years ago, your SA amount will always exceed the new annual limit. And as the years go by, because of the compounding interest, the margin grows larger and larger.

On the other hand, they dont do this for the MA. Once the MA reaches the contribution limit, they stop taking your money.

Originally Posted by Unregistered

Hi,

I understand the magic of compounding interest from SA and benefit of topping up SA to gain from tax rebate.

I am 43yo, currently OA: $59.6K, SA: $165.8K, MA: $48.5K. I am still using my OA to service my HDB which has balance outstanding of $103.5K.

As I have hit the MS SA limit and would not able to top up further from this year onwards (CPF typically increase MS SA by $6-$7K, my SA and contribution interest would have exceeded the yearly increase), may I ask how do you return the money from property to your OA account?

Did you sell your property and subsequently purchase your property in cash, or downgrade to a smaller property and paid in full?

Should I repay my current outstanding loan of $103.5K by cash instead from deduction from OA?

Thanks for sharing your tips and I am looking forward to CPF money standby for my retirement.

I currently have some loan left to be repaid for my HDB house. I use Cash + CPF for the monthly instalment.

I want to purchase 1 condo but I don't want to sell off my HDB house. How much loan can I take? What is the best option for me?

Originally Posted by Unregistered

I currently have some loan left to be repaid for my HDB house. I use Cash + CPF for the monthly instalment.

I want to purchase 1 condo but I don't want to sell off my HDB house. How much loan can I take? What is the best option for me?

What's your combined annual income?