Tan Kin Lian's Blog: Transfer savings into CPF special account

Friday, August 08, 2008

Transfer savings into CPF special account

Hi Mr. Tan,

I am contemplating transferring my CPF-OA funds over to CPF-SA to earn more interest.
However, I am concerned that if I transferred too much over, I may not have the minimum OA amount at retirement for withdrawal. Besides this, what other withdrawal restrictions is likely to happen for such a case of large OA-to-SA funds transfer?

REPLY

It is better to transfer to SA to earn higher interest rate. The SA can be withdrawn during your lifetime. If you have excess amount in SA over the minimum sum, the balance can be withdrawn at that time.

8 comments:

Sgbluechip said...: The stock market has fallen to attractive levels. Isn't it better to invest CPF OA idle cash into higher yielding instruments? Afterall if one's time horizon is above 5 years, Singapore blue chips is highly likely able to beat the interest rate given by CPF SA account, hands down.; August 08, 2008 11:34 PM
zhummmeng said...: You better transfer your OA to SA before you get conned into investing in NTUC growth policy which gives marginally above 4% but with risk, ie it is not guaranteed. They may con you about the insurance element which CPF doesn't have.But don't confuse investing with insurance. Growth may not achieve 4% and you have to hold for very long term. Anything shorter you lose .Whereas for CPF it is 4% guaranteed at any point of time.
So beware of the glib tongue "consultants" senior or executive. Don't let them ruin your retirement.; August 09, 2008 12:17 AM
Raymond T said...: In 2 years time... the SA rate will be tied to the govt's long term bond rate; August 09, 2008 8:03 AM
David said...: STI ETF is now at 1 year low of $2.87 as at Fri 8/8/08. But DJIA was up >300 pts on Fri close so STI may rise again on Monday in tandem. So things are volatile and the big plunge hasn't come yet. Maybe what is uncertain is the pattern of plunge, with some "dead cat bounce" along the way.; August 09, 2008 9:50 AM
Crazy Aries said...: well done Raymond, finally someone is telling the truth about the "CPF-SA giving 4% guaranteed".; August 09, 2008 9:53 AM
zhummmeng said...: vfocus is right that the 4% SA will be pegged to the long term 10 year bond and may not give 4%. But in the meantime it is still good to expose to higher return than OA and then consider , if risk is not a problem, the equities later as suggested by sgbluechip.
If you are concerned about having not enough for cash withdrawal at 55 i suggest that you invest aggressively right now. Expose to higher risk for potentially higher return and don't get caught in a low return product like single premium endowment like ntuc growth plan.; August 09, 2008 12:39 PM
Falcon said...: Investing using CPF is very confusing and tedious. Alot of rules so called to protect your funds. The reality is most people lose money investing using CPF not because they are lousy investors but because the rules tie their hands so when there is an opportunity, they cannot react fast enough because the system is inflexible, again in the name of protecting you. Then there is the continous custodian fees charged by the banks which their counterpart brokerage firm do not charge. No wonder these banks are making millions every year.; August 09, 2008 1:24 PM
zhummmeng said...: and there is the insurance agent who thinks he or she is an investment adviser advising you to switch in and out of the funds until it shrinks and shrivels but his or her pocket is swelling.; August 10, 2008 10:30 PM