CPF Money That Finally Grew Till 1.3x FRS (2021)

For a little background, this is a series of blog posts I have been writing since 2015 :

• CPF Money That Keeps Growing And Growing (2015)
• CPF Money That Keeps Growing (2016)
• CPF Money That Keeps Growing (2017)
• CPF Money That Keeps Growing (2018)
• CPF Money That Grew Till FRS And Lasted 8 Days (2019)
• CPF Money That Grew Till FRS Again And Lasted 14 Days (2020)

There were a couple of CPF-related changes effective this year (2022) and I felt that Endowus did a pretty good job with its blog post.

A lot more details has been covered in the Endowus blog post so I won’t repeat them here.

To recap, the Basic Healthcare Sum (BHS) and Full Retirement Sum (FRS) for 2022 is $66,000 and $192,000 respectively.

At the personal front, I have managed to achieve BHS since 2018 and this has largely allowed for the annual interest earned in CPF-MA to help keep up with the yearly increase.

Assuming 4% yield on $63,000 is thus equivalent to $2,520 – not bad.

As per CPF rules, funds in CPF-MA is capped at the BHS amount. Therefore, the excess inflows into the account would be transferred into CPF-SA instead.

Shortly after, the FRS milestone was reached (by a mere $208, phew) one year after I did the same for BHS when I was 37 years old.

Since then, the combined amount in my CPF-OA, CPF-SA and the money I have transferred (and remaining) in my mum’s CPF-RA continues to increase at a decent rate.

At the end of 2022, the amount has ballooned to 1.3x of FRS even as the money in my mum’s CPF-RA account is continuously depleted. Adding up my accounts resulted in a grand total of S$242,570 on the 31st December 2021 after accounting for CPF interest earned.

Side note – currently, my portion of the housing loan that we took on for our HDB apartment stands at around $61,750 ten years after getting the keys to our home. Well, only twenty more years to go.

For a better idea of the amount of interest earned in 2021, CPF Board is very helpful in providing a nice report card (Yearly Statement of Account) for our annual progress.

In chart form, my journey looks a bit nicer. The increase in interest earned was somewhat muted for 2020 and 2021 due to the money I have transferred into my mum’s CPF-RA account instead of letting it compound in my own CPF accounts.

In January 2020, I transferred $40,000 from my CPF-OA to my mum's CPF-RA.

This helped her to establish a life-time payout of $300 per month from CPF-LIFE. pic.twitter.com/Mcxs2m1Xne

— Kevin | Turtle Investor (@turtle_investor) January 14, 2021

Regardless, I’m incredibly thankful for the $8,571 – to take one step back, this is an incredible amount of money earned for doing absolutely nothing. Easily more than twice my monthly salary when I just started working.

Compound interest. The eighth wonder of the world indeed.

Pretty funny looking back at my CPF blog post in 2015. In it, I had projected a worst-case scenario in which I would reach CPF FRS in 2030.

In my journey, the knowledge and wisdom of the veterans of the SG personal finance space have helped me tremendously. To all the (crouching) tigers and (hidden) dragons in the community, thank you!

To me, CPF is no doubt an critical pillar of support that directly complements the possibility of a comprehensive retirement plan. To borrow from what I have learnt from Christopher Tan, if my wife and I were to reduce our retirement plans to its irreducible minimum, we must have these three things:

• You must have a fully paid house.
• You must have a good medical expense insurance.
• You must have a lifelong stream of income.

CPF has a major role to play in all three of the above. Beyond that, having a solid foundation in CPF provided me the security and assurance to pursue other aspects of finance independence, retire early (FIRE) more aggressively.

Curious to read more? Check out my blueprint for financial independence for ideas on CPF and more!