I received my CPF statement in the mail last night and when I was chatting with my mom, I told her how much money I have in my CPF-OA now and she was very shocked.
"How much did you say?!" my mom went. I passed her my CPF statement so that she could take a look for herself.
Well, to be honest, it might not be much to some people but it is quite significant to me.
So, how much is it?
How did I achieve this?
What I basically did was to do nothing to my CPF-OA after selling my last property about 3 years ago. In the purchase of my current home, I use my CPF-OA money sparingly as I was not and still am not able to get any interest income for my cash on hand that is close to 2.5% per annum.
Also, we have to remember that the opportunity cost of using our money in the CPF-OA is a bit more than that because we would have to pay ourselves the accrued interest lost for using our CPF-OA money. This happens in the event that we sell the property concerned.
Essentially, what happens is that instead of the government paying us interest on our CPF savings, we would have to pay ourselves interest as the CPF's primary objective is to ensure that we have a financial safety net in retirement. I rather prefer the idea of someone else paying me, to be sure.
For most of us, in our early years, it would probably be difficult to purchase a property in Singapore without the help of the funds in our CPF-OA.
However, if we are financially prudent enough to accumulate cash, invest to grow our wealth as we make progress in our career, it is not difficult to imagine us having more cash on hand as time goes by.
In the purchase of our second home years later, assuming that we do, it is then possible to use less of our CPF savings and more of our cash on hand, leaving money in the CPF-OA to grow.
Let the government work steadily to help pay for our retirement? Yes, you got it, that is the idea.
A lot of the money in my CPF-SA is from...