Voluntary CPF Contribution

[Falc]

Why they have to make it until so complicated.

 

[Solar]

At 4% pa for SA it better than many live insurance policies and endowment policies. First 60k or 40k at 5% pa. But 4% not guaranteed from next year. Can be more can be less depending on 10YSGS rate + 1%.

 

ya.. boh hua.. for it to be locked there for this long time..

 

There is risk involved compared to CPF. Banker may fold and A$ has gone down to $0.85 and up to $1.30 in the recent past. Long term A$ should be down. Long ago it was S$3.50 to A$1 if I am not mistaken.

 

when subprime crisis came out, many gahmen started to guarantee deposits... mas also came out with this guarantee a while later too.. no worries for the bank to fold lah..

as for the rates, yes, true true for the recent past.. i managed to get A$10k @ S$0.8x somewhere in nov08..

about 10+yrs ago, i was in an ozzie uni..S$ was slightly stronger than A$.. at S$0.9x

 

for S$3.50 to A$1... wah..didn't know about that..at least 20-30yrs ago ah?

its quite unlikely lah.. but if so, woohoo..

 

in addition, their interest rates seems to be (always) much higher than ours.. when times were better (about a yr or two ago), they were paying 7-8%, compared to ours, a pathetic 2-3%

now in economic crisis, (i just used back my maybank FD example), 1mth A$ interest has fallen to 3.6%, compared to 1mth S$ 0.375% nia.

of course, in S$, one eliminates forex risks..returns naturally becomes lower..

 

back to cpf...regarding putting $ in there, no right or wrong answer.. depends on one's needs.

for TS, he wants to put in medisave/shield, for a bit higher interest at 4% and for medical needs of his family..that is a tool which serves its purpose too. (to me no point cos insurance companies outside already offer something similar, and better coverage).

of course, he loses his flexibility @ cpf cos its locked-in

[Mummypenguin]

Where got disadvantage?

 

If you leave $7000 in your bank and draw $297 monthly to give your mother how much interest can you get from $7000 which will earn 5% pa in your mum RA. Also tax savings of $200 for depositing money in your mum RA is equivalent you earning interest rate of more than 2% pa on the same $7000.

 

The disadvantage is you got to come out with a lump sum first, instead of lesser amont per month.

[Mummypenguin]

It's not the same thing to top up the CPF as giving your mother $7,000. $7,000 should be $583/mth. If your mother received just $297/mth, don't you have to "top up" a bit so that your mom can survive?

 

The $7k will be deposited into her savings account in 2 years not 1 year.

 

of course need to top up. The point is to benefit max from the tax relief, I can only deposit $7K each year. So for the difference, I just pay her in cash. Then the next year, deposit another $7k into her account.

[Dumb]

If you find it difficult to cough out 7k upfront then it's something painful if you want to take advantage of the scheme. But if you got more than 7k lying in your savings account or FD and which you dont need, it would be better to top up the parent RA.

[Falc]

I finally get where the $297 and where the $7K comes from, after finding the patience to read up the complicated rules!

 

Here's the monthly pay out calculator on one's Retirement Account:

https://www.cpf.gov.sg/cpf_trans/ssl/financ...ption.asp?prof=

 

It seems like the monthly amount is fixed by the scholars, while the duration of payout depends on the total amt you have in RA, and because there's fluctuating interest, you won't know exactly how long you will receive the monthly payout, aga aga only.

 

And here's the draw down date:

Your age as at 31 Dec 2007 / Applicable draw-down age

58 and above /62

56 to 57 /63

54 to 55 /64

53 and below / 65

Edited February 19, 2009 by Falc