As with each passing year, I would post a little update for my CPF numbers. Like I have stated many times, this isn’t a pissing contest. You want big numbers? AK’s blog is this way.

See previous posts here –

CPF Money That Keeps Growing (2017)

CPF Money That Keeps Growing (2018)

CPF News – $57,200 Basic Healthcare Sum For 2019

In my update for 2018, I estimated that I would achieve the CPF Full Retirement Sum (FRS) at the age of 38 in the year 2020. Looks like I’m going to have to up the ante this time by predicting that I’ll hit the FRS on the last day of 2019 when CPF interest is credited.

For this 10-year special edition, I dusted my statements and made nice little charts. I had already shared in my previous blog post my CPF Medisave Account (CPF-MA).

The first year charted was 2008, and this is the first year that I was under full-time employment. I had gone ahead and added in 2019 since it is a given that it will be achieved. Basic Healthcare Sum (BHS) achieved!

With the CPF interest finally credited, I now have the final numbers for 2018. Before that, let’s see how CPF interest numbers look like for the last ten years.

Steady uptrend there as a result of continuous hard work and employment. More money in CPF means more interest! All this is achieved without a single cent of CPF cash top-up, or transfer of CPF money from Ordinary Account to Special Account.

Saved the best for last : CPF-OA + CPF-SA numbers.

What made this possible? Being especially prudent when getting my first home in 2008 (a simple 4-room HDB flat in an up-and-coming new town when not many people wanted the area). I got my keys in 2011 which wiped out my CPF-OA. However, an affordable apartment ensured that my CPF-OA would have a chance to recover. It is doing so remarkably well, I should add.

My HDB partment during renovation

Remember what Christopher (of Providend) said about retirement and its simplest form?

  1. A Fully Paid House
  2. A Good Medical Expense Insurance
  3. A Lifelong Stream Of Income

Without a doubt, CPF is a significant driver for all three points over the last ten years for my financial well-being. I don’t care what people say, CPF is one of the best things that happened to me.

My apartment is 100% funded via CPF-OA without no cash outlay over a period of 30-years. Back then, it was possible to max it out to 30-years. And yes, it was a conscious and intentional decision to take a 30-years loan. It was the best decision back then, and I still feel the same way now. Don’t bother mentioning the interest rate point, I’ve covered it in the link above. Using a systemic withdrawal calculator, it is estimated that my CPF-OA now will be able to sustain my HDB loan payments for the remaining 22 years and 3 months plus plenty of left-overs. It is this aspect of financial security that matters to me.

Likewise, my Integrated Shield Plan is largely funded via CPF-MA. I added cash-riders to fully cushion co-payment and deductibles when it was possible. A bill shock (like the one for my dad if he didn’t have a shield plan) would be extremely painful, and possibly wipe out hard-earned assets.

CPF will eventually provide a lifelong stream of income, well, if I make it to withdrawal age. If not, my loved ones can have my CPF money. Home Protection Scheme (HPS) will take care of my portion of the housing loan, the money will support my parents until they pass, and my wife will get the rest of it so that she will not be burdened. So yes, CPF is my money even if I don’t get to spend it.

End Game

I’m at a very different stage now, and I’m beginning to think a lot more seriously of my end-game even though I’m only 36 🙂 Actually, not just my own, but my parents’ as well. This point below has been on the back of my mind since I last read about it.

On 2nd Oct 2017, under proposed changes to the CPF Act tabled by the Ministry of Manpower in Parliament, CPF members will be allowed to transfer their savings to their parents and grandparents, as long as they have the required Basic Retirement Sum in their own accounts and a sufficient property pledge or charge to make up the rest of the full sum.

The change went ‘live’ in October 2018. (Retirement Sum Topping-Up Scheme)

The threshold for members to transfer their CPF savings to their parents and grandparents has been lowered from the FRS to BRS, if the member has enough CPF savings inclusive of property pledge/charge to meet at least the current FRS (if he/she is below 55 years old), or the FRS applicable to him/her (if he/she is 55 years old and above). This concession gives members who are providing for their parents and grandparents more options to strengthen their parents’ and grandparents’ retirement adequacy.

As it turns out, I can transfer to my parents a significant sum (almost $40,000) as of today.

See an example of how it works. Notice the big blue arrow that I drew.

Plenty of food for thought as I end off this CPF post. Seeing that the modified scheme has only gone ‘live’ for two months, I’m hoping to see increased usage of it by others this year and how they are using it. My CPF post for 2020 would be a nice one to write about.

Sharing a meaningful and touching video of 郭彥甫 (if you understand Mandarin) on the responsible pursuit of dreams regardless of age and situation – I watched it twice thrice and was especially moved by the early days of his life and hold a lot of identical views that he shared on the show. Pursuing a practical career that brings in the money. Carrying debts for our family. Delaying our dreams due to adulthood responsibilities. Not too different from many of us, right? (Click on “Watch on YouTube” if you can’t view it) CPF is an enabler of dreams. That’s how I see it, and I’m in a far, far better position financially with the availability of CPF, plus it is now giving me the added option of supporting my loved ones with it.

Happy New Year! 🙂 (net worth blog post coming soon)