ฝัง
- เผยแพร่เมื่อ 11 ก.พ. 2025
- As the leading fee-only wealth advisory firm in Asia, Providend has consistently guided clients on incorporating CPF into their comprehensive wealth plans.
In this week’s Money Wisdom episode, our co-host Isaac talks to our CEO, Christopher about the CPF Special Account (SA) closure on 19 January 2025, which had an impact on approximately 1.4 million CPF members. Chris highlights the importance of first having clarity on your original intention for your CPF funds, before purchasing financial products solely to grow your CPF funds at a higher interest rate, without first considering your life goals.
Timestamp:
03:30 CPF SA’s original purpose. Retirement savings, transition to CPF LIFE after 55.
04:40 Closing of CPF SA for those 55 and above.
10:20 SA shielding impact. Balancing liquidity needs with investment returns.
12:32 CPF as a Singaporean-centric retirement scheme.
14:07 CPF SA closure impact on CPF-rich members.
23:35 CPF top-ups and Ordinary Account (OA) investments are irreversible. Also, consider liquidity.
24:17 CPF OA investments offer potential returns but come with risks.
25:09 Guaranteed 2.5% return ensures stability.
26:17 Is investing CPF OA risky for those without excess cash.
27:27 Withdrawing your CPF OA? Think carefully and avoid hasty decisions.
You can read Chris’s article in The Business Times on this topic here: providend.com/...
Listen to this podcast on our website here: providend.com/...
Stay tuned for our next episode, where we kick off our mini-series, "Milestones by Decade"!
Music courtesy of ItsWatR.
The host of this episode, Christopher Tan, is Chief Executive Officer of Providend, Singapore’s first fee-only wealth advisory firm and author of the book “Money Wisdom: Simple Truths for Financial Wellness”.
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One of my biggest regrets is not starting my investments sooner. If I were to start investing in 2025, I’d be worried about missing out on some major growth opportunities.
Timing the market is notoriously challenging, even for seasoned investors. For someone beginning in 2025, consulting with a financial advisor can provide personalized guidance tailored to your unique financial situation and goals.
I’ve been exploring various strategies ever since I considered taking the plunge. The challenge is knowing when to buy or sell-which sounds simple in theory but isn’t in practice. My advisor helps set up systematic entry and exit points, ensuring my portfolio stays aligned with long-term trends.
Sounds interesting! Could you share the details of your investment advisor? I’m in dire need of some expert guidance if I’m going to start investing in 2025.
Absolutely. His name is JAMES BRENDAN MCCALL-a highly respected figure in his field. I’d recommend looking deeper into his credentials since he brings extensive experience and serves as a valuable resource for anyone navigating the financial markets.
I just ran an online search for his name, found his website, and sent him an email. Thanks for sharing!
At age 56, I had enjoyed SA shielding for 1.5 years. Will keep my OA in CPF and plan to start using them after 60 yo.🎉
7:54 This liquidity vs high returns leaves a gigantic misalignment that somehow finance experts do not dare to comment on or are blissfully unaware of.
Look at CPF OA pre 55 vs post 55. There is a big difference in liquidity but yet the interest paid is the same.
Either a) the govt is paying too high a rate for CPF OA post 55 OR
b) thw govt is paying too low a rate for CPF OA pre 55.
it is neither a sin nor a crime to have a large CPFSA balance pre 55. or even post 55 after committing whatever amount to CPF RA.
the only thing that was needed was to ban shielding.
Honestly, i have 400k in my CPFSA and in a few years time, i could have just committed BRS in CPFRA leaving 300k or so.
My CPFSA balance was meant to be one of 3 pillars of my retirement income ad infinitum.
the closure has caused me to postpone my retirement by 1 or 2 years which is 2 to 2.5% of my probable lifespan.
Thanks for sharing
Thank you @kellyng7972 for encouraging us, and taking the time to leave a comment.
You may also enjoy reading this article our team wrote on "CPF Special Account Closure After 55: How to Prepare for 2025": providend.com/cpf-special-account-closure-after-55-how-to-prepare-for-2025/
Meanwhile, have a blessed weekend ahead!
Those who gets these benefit are the pioneers, majulah and elderly Singaporeans who had been contributing to the country all these years. You are affecting the old workers who are going into their retirement. Whats wrong with giving them these benefit as appreciation for their contribution in nation building in the early years?
Strange that MA is not mentioned at. Personally, i would make sure my MA is full at BHS, still earns 4%, and can use anytime before 65 years old.
Dear Kok Wai, thank you so much for sharing your thoughts. Yes that is a good strategy. Some people will make sure that their MA is full so that additional interest on MA will flow over to SA or RA (for those above 55). Some will also intentionally use their MA to pay for medical expenses and then top it up with cash to enjoy tax exemptions. All of these are good strategies. I did not mention it in this podcast because this podcast was done as a supplement to the article I wrote for the Business Times and the focus was on the closure of SA earlier last month.
Hope this clarifies!!
Christopher Tan, CEO Providend
Honestly, should stop shielding rather than removing SA account.
cpf is not a singaporeans-help-singaporeans scheme, cpf life is.
Dear a.b.4870. Thank you for watching our video and sharing your thoughts. You are actually right. It is just that when I said that, I was referring to the entire CPF Scheme because I looked at CPF LIFE as part of the overall retirement scheme. One first accumulate towards the retirement sum and at age 65, it gets converted into an annuity. But if we want to be clinical about it, you are right. My apologies for being not so specific.
Have a blessed weekend!
Christopher Tan, CEO, Providend
@@TheLumueh thanks for taking the time to respond, Chris. no worries.
please dont misunderstand that i was trying to pick bone, maybe i was just a little sad that i will not be able to enjoy SA shielding.
i always enjoy your sharing, be it in this channel or as a guest in other channels. they are practical, down to earth and well thought out. keep up the good work.
have a blessed weekend too!
@@a.b.4870 No no…I am grateful you picked that up. Shows that you really understand the scheme. I am not perfect and many times make mistakes during podcasts! Talk too fast without thinking! When you bring it up, I learn from my mistakes. Thanks for encouraging me and listening to our content!
I disagree with this “you shouldn’t invest cpf OA” mindset.
If you’re not investing your CPF OA, the government is anyway, what’s the difference? You’re taking control of your retirement, and not allowing government to change plans at their own whim . You might think you’re unaffected today, but it might hit you one day.
2.5 % is honestly crap. Can’t beat inflation, can’t even beat a high yield savings account which has high certainty of return . Taking out OA to explore outside the walled gardens is less risky than you think.
If losing some money on your OA will significantly affect your retirement, then you’re in survival mode. That’s a diff story
One cannot compare individual’s investment with
government’s investment.
Whether to invest CPFOA depends on one’s risk appetite , time horizon and affordability.
@ the removal of cpf SA doesn’t really affect people who can’t afford the risk.
For those not cpf rich, using OA to buy their hdb is also a form of investment. I don’t really see a difference.
The restrictions should be placed on what products can be invested in using CPF, if the concern is about misinformed investments and managing risk.
Dear @garlicbread68, thank you for watching the content and also sharing your thoughts. First of all, I am actually not against the idea of using CPF-OA to invest. In this podcast (which was based on the article I wrote for The Business Times), I shared certain factors to consider before one invest their CPF-OA money. For those who needs the money very soon, investing may not be a good idea. But for those with a longer time horizon, investing is fine. My concern is really for the common man in the street who may not have the knowledge and experience and get enticed by sales pitches and invest their hard earned CPF money and end up losing them. This is unfortunately a reality - almost half of those who used their CPF-OA to invest ended up not beating the 2.5% p.a. (www.c3a.org.sg/articles/1-2-who-uses-cpf-invest-ends-worse).
Also, our average inflation rate is actually not that high relative to OA interest. They are:
a. The average inflation rate for the last 10 years (2013 to 2023) was 1.44%.
b. The average inflation rate for the last 20 years (2003 to 2023) was 2.08%.
c. The average inflation rate for the last 30 years (1993 to 2023) was 1.73%.
While OA interest of 2.5% may not be considered high, it has been tracking inflation quite well. Also relative to the risk, a guaranteed 2.5% p.a. with full liquidity is actually not too bad.
But once again, I would like to say that I am not against investing OA money. I am just concerned for man in the street and offered some considerations before they invest their hard earned money.
With regard to product restrictions, they have already been put in place on what one can invest using their OA money. But I do agree that more can be done. In the 2014-2016 CPF Advisory Panel where I sat on, we recommended that management fees for some of these products under CPFIS can be cut down. I think this is one area which could be further improved to give investors better investment experience.
Finally, the difference between government investing our OA money and we do it ourselves is mainly the guarantee. CPFB invest our OA money into Special Singapore Government Bonds. This bond is a private arrangement between CPFB and the Singapore government. You cannot find this SSGS traded in the bond market. This private arrangement guarantees CPF members to get a minimum of 2.5% p.a. while still having that liquidity to take out anytime one wants when they are above 55 years old. When one invest on their own under CPFIS-OA, they must accept that there is no such guarantee. I know I sound like a broken recorder but I need to emphasise that I am not against people investing their CPF-OA money. I think one should consider the factors that I shared and also balance the risk and returns of other investment instruments before making the decision.
Thank you once again for watching and sharing your thoughts. Have a blessed weekend!
Christopher Tan, CEO, Providend
@@ProvidendSG thank you for your thoughtful answer
@@garlicbread68 Thank you for sharing so authentically so that we can all learn together. - Chris