Boring Turtle History of Cash Top-Up and Voluntary Contribution

Old Turtle is going to touch on a very sensitive and taboo topic in Singapore once again on CPF aka Central Provident Funds.

I got some really nasty comments when I wrote on the tax benefits on doing RSTU and VC to CPF but who cares?

Some people just cannot accept the truth and numbers I presented. Like that how huh? Tell them facts, they don't believe, next time I write more rubbish for you to believe k ... such as "RETURN MY CPF", "CPF is SCAM" ... "CPF is NOT YOUR MONEY" etc etc.

I will continue to write what I think its correct and whatever that makes financial sense for my fellow Singaporean.

This is probably one of my last few lengthy "loh soh" Turtle post on CPF as I will not be writing as much once I meet the FRS (Full Retirement Sum) likely to be in September 2020 based on my projection assuming I still hang on to my day job.

CPF is unreal? Scam? Pyramid Scheme? I beg your pardon again. 

Wikipedia: A pyramid scheme is a business model that recruits members via a promise of payments or services for enrolling others into the scheme, rather than supplying investments or sale of products

Lai ... Let me tell you a True Turtle story .. Once upon a time ....

My late father passed away a couple of years back leaving us a total CPF balance of $67,731.42 that was made up of his RA (Retirement Account) and MA (Medisave Account).

I am quite smart hor (or you can say I am kia-su in Singaporean's context), I did my parents CPF nomination when I was 22 years old after I came out to work.

Fast forward many years later, CPF refunded us my father's CPF monies with any interest earned to our bank account within 10 business days. 

Not a cent short and did not delay us at all. 

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What does this Turtle story tells us? Even if I couldn't use my CPF monies till I am 65 years old, they will still be there PHYSICALLY available for my CPF beneficiary after I passed on. It will be part of my gifts for my beneficiaries if I don't get to enjoy it. 前人种树后人乘凉


So are CPF monies unreal? Not our money? You make the call yourself.

Below is a history of my own CPF cash top ups and voluntary contribution over the years.

Aug 2017

VC MA: $6,845

Aug 2017
VC MA: $4,465 (Met BHS $52,000)
RSTU: $7,000

Jan 2018
RSTU: $7,000
VC MA: $3113.41 (Met BHS $54,500)

Jan 2019
RSTU: $7,000
VC MA: $2,700 (Met BHS $57,200)

Jan 2020
RSTU: $7,000
VC MA: $2,800 (Met BHS $60,000)

In total, I had made a total of $47,923.41 since 2016 when I was 33 years of age.

Since Oct 2019, I also have been transferring my OA balance to my SA as I have no use of the OA amount and wanted to speed up the pace to meet the FRS so compounding can start as early as possible.

CPF Shifting of Goal Post

We could always argue that government is shifting the CPF "goal post" annually using inflation as the reason. Inflation to me it's not a reason but a fact. $1 now will not be worth $1 after 20 years, simple reason but hard to accept it, yea I know.

The beautiful thing about hitting FRS is that government will technically take care of the shifting of goal post once you meet the ceiling. 

So far the annual increase of FRS is $5,000 ($181,000 in 2020) for the past few years and with SA annual interest rate at 4%, we will be getting back $7,240 in the form of interest assuming we already met 2020's FRS. The interest generated sufficient takes care of the shifting of goal post. Do note that FRS increase from 2021 onwards is not announced yet. 

Don't say Old Turtle never show you the "ho liao" and MAGIC hor .... !!  

Why do it earlier? Because you have more years for CPF to compound the balance, simple reason. Do an excel and you will understand what I meant. 

I am pretty late in the game I have to admit, I wished I did these actions when I was in my 20s. Reason why I did not was due to the fact that I was still paying off my HDB loan mortgage and wanted to have more cash on hand in case of emergency.

Just FYI, I had fully paid off my HDB loan within 5 years using CPF OA (Ordinary Account) in Jan 2018 so I am making full use of my OA balance for SA transfer to meet FRS. 

I am a HAPPY OLD TURTLE, don't ask me why!!

Have a great Lunar Chinese New Year. This will be my last post before welcoming the year of RAT!!!

Important Note: 

• For those readers that are considering to do RSTU and VC, please ensure that you know these actions are irreversible.

• Think about your cash flows and financial/family commitment and situation before you make the decision. 

Refer to the CPF Sources if you want to know more about RSTU and VC benefits and why I choose to top up in January.

• https://www.cpf.gov.sg/Members/Schemes/schemes/retirement/retirement-sum-topping-up-scheme 

• https://www.cpf.gov.sg/members/FAQ/schemes/other-matters/cpf-contribution-for-employees/FAQDetails?category=Other+Matters&group=CPF+Contribution+for+Employees&ajfaqid=2184960&folderid=11177