Hi Adam, thanks for this very informative video with clear explaination. My friends and I were just chatting about this laast 2 weeks on how to max out and reach the current FRS asap and let the interest yearly take care of itself for the increase in FRS Sum YOY. Thanks alot!
Nice concept on investment CPF but the worry is the last egg nest with OA2.5%... and SA 4%.... however, the conservative idea is hard to firm especially during market correction.
Central Provident Fund (CPF) members currently earn interest rates of up to 3.5% per annum on their Ordinary Account (OA) monies, and up to 5% per annum on their Special and MediSave Account (SMA) monies. Retirement Account (RA) monies currently earn up to 5% per annum.
Hey Shen Yang. You're absolutely right. The extra 1% interest however, are paid only on the first $60,000 of a member’s combined balances (with up to $20,000 from the OA). So, anything above that are revert back to 2.5% and 4%. All in all, it's still a good thing for that extra 1% (cos it means more money to boost our CPF for retirement!).
@@TheFifthPersonChannel eg. assume I am 55 this year and I have topped up 100k to my SA all these years. My FRS is 281k now. Are you saying that I can withdraw this 100k? Did I misinterpret anything from this link? www.cpf.gov.sg/members/FAQ/schemes/Retirement/Withdrawals-of-CPF-savings-from-55/FAQDetails?category=Retirement&group=Withdrawals%20of%20CPF%20savings%20from%2055&folderid=12854&ajfaqid=2189257
@@jalanjalan7099 The statement can be a bit confusing cos you are mixing (i) and (ii) Based on your assumption, If your FRS is 281K today and the FRS is 181K today, YES. You can withdraw 100K. If you look at the table on "More Than Your FRS", just look at point (i) $5,000, or your Special and Ordinary Account savings above your Full Retirement Sum, whichever is higher. *Any amount ABOVE your FRS. After your OA and SA are being combined to form the RA. **Your leftovers in OA and your SA will still remain in your OA and SA. ***They can be withdrawn in full point (ii) is the amount that you can withdraw from your RA, which is the FRS anyway. It has nothing to do with the amount left in your OA and SA. Hope this clarifies. =)
FRS is a moving goal post bec the SG garmen had no more money to pay the cpf to current old people. Inflation is not so much, Garmen themself claims. So, its not inflation.... Garmen should just convert our SA to FRS. CPF belongs to us, garmen should not steal our money.
HI Adam, thanks for the informative video. But I am a bit confused when I look at your calculation on point one (transferring $ from OA to SA). At 8:35 (video), I see that the infographic presented mention that the extra 1% interest is on the first $60K. Does that mean anything after that will not be eligible for the extra 1% ?
Hi Jenny, You are right. The extra 1% is for the first 60K only, with up to 20K from OA account. Anything above 60K will be based on 2.5% for OA and 4% for SA & MA The extra 1% is just a small booster. I wouldn't take that as a benchmark because that extra 1% may be taken away anytime depending on the Singapore government. Just take it as a bonus. It would be best if you just use 2.5% for OA and 4% for SA for any calculation for your retirement planning.
Hi Adam, thanks so much for putting this video together. Do you know if the FRS includes MA into calculation since it only comes from SA and OA. Thanks in advance
Hi Joseph, you're most welcome! Only cash balances from your SA and OA will be used to set aside the Full Retirement Sum when you turn 55: www.cpf.gov.sg/members/FAQ/schemes/retirement/retirement-sum-scheme/FAQDetails?category=Retirement&group=Retirement+Sum+Scheme&ajfaqid=6405798&folderid=18088
Hi Jane, Nope. You can't contribute anymore to SA via cash top up. Likewise, you cannot transfer anymore from OA to SA. That said however, the SA from employer will continue to flow into your SA.
Why should it make much difference topping up your SA in the beginning of the year or the end? If you top up at the end of November, won't you still earn interest for the one month until the end of the year? Sorry, a bit confused about this. Hope u can clarify.
Let's say I have X amount to top up. If I top up in Dec 2021, at the end of 2022, that X amount will generate one year of interest. If I wait and top up in Jan 2022, at the end of 2022, that X amount will only generate 11 months of interest. One month of interest is lost by waiting to top up in January. I hope you can advise me if the above reasoning is incorrect. Thank you.
Hi Dash, the example is comparing topping up in January instead of the December the same year (Jan 2021 vs Dec 2021): www.cpf.gov.sg/Members/Schemes/schemes/retirement/retirement-sum-topping-up-scheme Hope this explains!
It depends on which age you get to the FRS. The earlier you get there, the more money you'll compound. The figures you see in the beginning of the video are numbers from a 38 year old. So let's take the flat rate of 2.5% and 4% instead of the additional 1% for first 60K for our calculation. Also, Let's assume the monthly contribution of say $800 to OA and $250 to SA. From 38 years old to 55 would be 17 years. Compounded at 2.5% for 17 years with monthly contribution of $800 = $399,633 Compounded at 4% for 17 years with monthly contribution of $250 = $487,158 Add them up and you get $886,791. Lets say we got there 1 year earlier, and the numbers you saw were from a 37 year old... Compounded at 2.5% for 18 years with monthly contribution of $800 = $419,224 Compounded at 4% for 18 years with monthly contribution of $250 = $509,644 Add them up and you get $928,868. The total yearly contribution is OA $9600, and SA is $3000, but within just a year, the diff is $42,000 because of the interest, compounded. Again, as mentioned, this excludes the extra 1%. This excludes the MA. And this is an assumption that the CPF contribution is $800 / $250. Based on the Singapore's median salary of $4500 in 2019, the average Singaporean should be able to contribute MORE than the stated amount above. We also didn't factor the distribution of your salary between OA and SA from 45 years onwards. Granted, not everyone has the same earning power. Some may earn more, some may earn less. Some may achieve a $1MM. Some 800K, some 700K, but the idea is the same. Max out your FRS once you have the chance. The sooner, the better. Once your FRS is maxed out, you don't have to worry not hitting the minimal sum and not being able to withdraw your money that's in your CPF after 55 of age. And while waiting, let the magic of compounding do the work for you. If there is another takeaway... 4% of 50K = $2000 4% of 200K = $8000 The more your SA grow, the more interest you will receive. The more interest your SA receive, the MORE your SA will continue to grow.
The Fifth Person hi Adam, can explain how with contribution 800/month in OA for 17 years can get $ 399,633 ? And also with 250/month to SA for 17 years can get $ 487,158 ? Thanks
@@rahasiasekali I guess you didn't add the initial $131K from the OA and 213K from SA. Watch 0.44 That amount was accumulated for 18 years -- Age 20 to 37. The trick is not about the calculation, but rather, about hitting the FRS in your SA as early as possible. Once you get there, you don't have to worry about not hitting the minimal sum because the yearly interest will almost always cover the increase. PLUS, the more the volume, the more the compounded amount.
Hi Adam. Can I ask you if I top up my medisave to the max, will the excess amount still flow to my SA even though I have also reached the FRS in the SA?
If your Medisave is maxed out and your SA has already reached the FRS, the excess will then go to your OA: www.cpf.gov.sg/members/FAQ/schemes/healthcare/medisave/FAQDetails?category=healthcare&group=MediSave&ajfaqid=2189357&folderid=12917
I have already maxed my SA at age 41. Can I still top up 8k every year? Will my regular monthly contributions still go to SA? How can I keep growing my SA here on?
Congrats Sid! You SA will still grow via your monthly contributions and interest, but you can no longer do top-ups. According to the CPF: 'If you are below age 55, you can top up your SA up to the current Full Retirement Sum (FRS). For those aged 55 and above, you can top up your RA up to the current Enhanced Retirement Sum (ERS)' www.cpf.gov.sg/member/infohub/educational-resources/retirement-sum-topping-up-scheme--a-guide
Unlikely. But from history, there is a chance that the Min Sum remains the same as of the previous year. This is even better if you have maxed out your minimal sum, because you skipped a single year and still receive the same interest, which could translate to withdrawing more after 55.
Hi Keytia, you can withdraw your Special Account and Ordinary Account savings after setting aside your Full Retirement Sum in your Retirement Account at 55: www.cpf.gov.sg/Members/Schemes/schemes/retirement/withdrawals-of-cpf-savings-from-55
Thanks so much for watching! Do you have any questions regarding how to grow your CPF? Share in the comments below!
Hi Adam, thanks for this very informative video with clear explaination. My friends and I were just chatting about this laast 2 weeks on how to max out and reach the current FRS asap and let the interest yearly take care of itself for the increase in FRS Sum YOY. Thanks alot!
Hi Jason, thanks for watching! Glad it was helpful!
Nice concept on investment CPF but the worry is the last egg nest with OA2.5%... and SA 4%.... however, the conservative idea is hard to firm especially during market correction.
Great video, very clear
Glad it was helpful! 🙂
Central Provident Fund (CPF) members currently earn interest rates of up to 3.5% per annum on their Ordinary Account (OA) monies, and up to 5% per annum on their Special and MediSave Account (SMA) monies. Retirement Account (RA) monies currently earn up to 5% per annum.
Hey Shen Yang. You're absolutely right. The extra 1% interest however, are paid only on the first $60,000 of a member’s combined balances (with up to $20,000 from the OA). So, anything above that are revert back to 2.5% and 4%. All in all, it's still a good thing for that extra 1% (cos it means more money to boost our CPF for retirement!).
Pls note that all TOP up to SA cannot be withdrawn even if you hit FRS.
@@jalanjalan7099 Nope. All amount (OA + SA) in excess of the FRS can be withdrawn upon Age 55.
@@TheFifthPersonChannel eg. assume I am 55 this year and I have topped up 100k to my SA all these years. My FRS is 281k now. Are you saying that I can withdraw this 100k? Did I misinterpret anything from this link? www.cpf.gov.sg/members/FAQ/schemes/Retirement/Withdrawals-of-CPF-savings-from-55/FAQDetails?category=Retirement&group=Withdrawals%20of%20CPF%20savings%20from%2055&folderid=12854&ajfaqid=2189257
@@jalanjalan7099 The statement can be a bit confusing cos you are mixing (i) and (ii)
Based on your assumption, If your FRS is 281K today and the FRS is 181K today, YES. You can withdraw 100K.
If you look at the table on "More Than Your FRS", just look at point
(i) $5,000, or your Special and Ordinary Account savings above your Full Retirement Sum, whichever is higher.
*Any amount ABOVE your FRS. After your OA and SA are being combined to form the RA.
**Your leftovers in OA and your SA will still remain in your OA and SA.
***They can be withdrawn in full
point (ii) is the amount that you can withdraw from your RA, which is the FRS anyway. It has nothing to do with the amount left in your OA and SA.
Hope this clarifies. =)
Great video 👍🏻
Thanks 👍
FRS is a moving goal post bec the SG garmen had no more money to pay the cpf to current old people.
Inflation is not so much, Garmen themself claims. So, its not inflation....
Garmen should just convert our SA to FRS.
CPF belongs to us, garmen should not steal our money.
Appreciate. Very nice.
Thanks Derrick!
HI Adam, thanks for the informative video. But I am a bit confused when I look at your calculation on point one (transferring $ from OA to SA). At 8:35 (video), I see that the infographic presented mention that the extra 1% interest is on the first $60K. Does that mean anything after that will not be eligible for the extra 1% ?
Hi Jenny, You are right. The extra 1% is for the first 60K only, with up to 20K from OA account. Anything above 60K will be based on 2.5% for OA and 4% for SA & MA
The extra 1% is just a small booster. I wouldn't take that as a benchmark because that extra 1% may be taken away anytime depending on the Singapore government. Just take it as a bonus.
It would be best if you just use 2.5% for OA and 4% for SA for any calculation for your retirement planning.
Hi Adam, thanks so much for putting this video together. Do you know if the FRS includes MA into calculation since it only comes from SA and OA. Thanks in advance
Hi Joseph, you're most welcome! Only cash balances from your SA and OA will be used to set aside the Full Retirement Sum when you turn 55: www.cpf.gov.sg/members/FAQ/schemes/retirement/retirement-sum-scheme/FAQDetails?category=Retirement&group=Retirement+Sum+Scheme&ajfaqid=6405798&folderid=18088
Thanks for the informative video. What happens to the for contribution from employer after SA hits maximum amount? Can we still contribute to SA?
Hi Jane, Nope. You can't contribute anymore to SA via cash top up. Likewise, you cannot transfer anymore from OA to SA. That said however, the SA from employer will continue to flow into your SA.
Hi! Thanks for the informative video! Are we able to do a monthly top up to SA account instead of doing a lump sum 7000 a year to our SA?
Thanks, Zi Rong! Yes, you can top up anytime you want.
@@TheFifthPersonChannel Thanks for information!
Very good video!
Can I just clarify...if I have reached the FRS....can I still do cash top-ups of $7000 a year?
Thanks Yong Chin! You can only top up to the prevailing FRS amount.
www.cpf.gov.sg/Members/Schemes/schemes/retirement/retirement-sum-topping-up-scheme
@@TheFifthPersonChannel Thank you! Is BRS the same as the CPF minimum sum?
The equivalent of the CPF minimum sum today would be the FRS.
I recall there is a cap in OA and SA for the sum that can earn 4% pa.
Hi Mandy, there is no cap is OA. And OA earns 2.5%. There is a cap for SA top ups (up to FRS). There is no cap for SA earning 4%.
Why should it make much difference topping up your SA in the beginning of the year or the end?
If you top up at the end of November, won't you still earn interest for the one month until the end of the year?
Sorry, a bit confused about this. Hope u can clarify.
If you top in January vs December, you get an extra year of interest 😊
Let's say I have X amount to top up.
If I top up in Dec 2021, at the end of 2022, that X amount will generate one year of interest.
If I wait and top up in Jan 2022, at the end of 2022, that X amount will only generate 11 months of interest.
One month of interest is lost by waiting to top up in January.
I hope you can advise me if the above reasoning is incorrect.
Thank you.
Hi Dash, the example is comparing topping up in January instead of the December the same year (Jan 2021 vs Dec 2021): www.cpf.gov.sg/Members/Schemes/schemes/retirement/retirement-sum-topping-up-scheme
Hope this explains!
I don't see the math to how to get $1 Million in CPF By 55. Would appreciate if you can show the math.
It depends on which age you get to the FRS. The earlier you get there, the more money you'll compound. The figures you see in the beginning of the video are numbers from a 38 year old. So let's take the flat rate of 2.5% and 4% instead of the additional 1% for first 60K for our calculation. Also, Let's assume the monthly contribution of say $800 to OA and $250 to SA.
From 38 years old to 55 would be 17 years.
Compounded at 2.5% for 17 years with monthly contribution of $800 = $399,633
Compounded at 4% for 17 years with monthly contribution of $250 = $487,158
Add them up and you get $886,791.
Lets say we got there 1 year earlier, and the numbers you saw were from a 37 year old...
Compounded at 2.5% for 18 years with monthly contribution of $800 = $419,224
Compounded at 4% for 18 years with monthly contribution of $250 = $509,644
Add them up and you get $928,868.
The total yearly contribution is OA $9600, and SA is $3000, but within just a year, the diff is $42,000 because of the interest, compounded.
Again, as mentioned, this excludes the extra 1%.
This excludes the MA.
And this is an assumption that the CPF contribution is $800 / $250.
Based on the Singapore's median salary of $4500 in 2019, the average Singaporean should be able to contribute MORE than the stated amount above. We also didn't factor the distribution of your salary between OA and SA from 45 years onwards.
Granted, not everyone has the same earning power. Some may earn more, some may earn less.
Some may achieve a $1MM. Some 800K, some 700K, but the idea is the same. Max out your FRS once you have the chance. The sooner, the better. Once your FRS is maxed out, you don't have to worry not hitting the minimal sum and not being able to withdraw your money that's in your CPF after 55 of age. And while waiting, let the magic of compounding do the work for you.
If there is another takeaway...
4% of 50K = $2000
4% of 200K = $8000
The more your SA grow, the more interest you will receive. The more interest your SA receive, the MORE your SA will continue to grow.
The Fifth Person hi Adam, can explain how with contribution 800/month in OA for 17 years can get $ 399,633 ? And also with 250/month to SA for 17 years can get $ 487,158 ? Thanks
The Fifth Person i calculate compound interest but can not get same amount as you? Is CPF calculate the interest same way with you? Thanks
@@rahasiasekali I guess you didn't add the initial $131K from the OA and 213K from SA.
Watch 0.44
That amount was accumulated for 18 years -- Age 20 to 37.
The trick is not about the calculation, but rather, about hitting the FRS in your SA as early as possible. Once you get there, you don't have to worry about not hitting the minimal sum because the yearly interest will almost always cover the increase. PLUS, the more the volume, the more the compounded amount.
The Fifth Person thank you for your info 👍🏻
Hi Adam. Can I ask you if I top up my medisave to the max, will the excess amount still flow to my SA even though I have also reached the FRS in the SA?
If your Medisave is maxed out and your SA has already reached the FRS, the excess will then go to your OA: www.cpf.gov.sg/members/FAQ/schemes/healthcare/medisave/FAQDetails?category=healthcare&group=MediSave&ajfaqid=2189357&folderid=12917
I have already maxed my SA at age 41. Can I still top up 8k every year? Will my regular monthly contributions still go to SA? How can I keep growing my SA here on?
Congrats Sid! You SA will still grow via your monthly contributions and interest, but you can no longer do top-ups.
According to the CPF: 'If you are below age 55, you can top up your SA up to the current Full Retirement Sum (FRS). For those aged 55 and above, you can top up your RA up to the current Enhanced Retirement Sum (ERS)'
www.cpf.gov.sg/member/infohub/educational-resources/retirement-sum-topping-up-scheme--a-guide
the government is just going to use invisible paint to paint over the goal post.
if got deflation min sum will reduced???
Unlikely. But from history, there is a chance that the Min Sum remains the same as of the previous year. This is even better if you have maxed out your minimal sum, because you skipped a single year and still receive the same interest, which could translate to withdrawing more after 55.
how much money can l take my SA went l turn 55
Hi Keytia, you can withdraw your Special Account and Ordinary Account savings after setting aside your Full Retirement Sum in your Retirement Account at 55: www.cpf.gov.sg/Members/Schemes/schemes/retirement/withdrawals-of-cpf-savings-from-55