CPF Interest and CPFIS Performance Update
I think most of us will feel happy happy so long as you have CPF account as your interest from CPF been credited this morning , no matter rain or shine on 1st day of each new year. We (STE & Mrs. ) are so happy to see our CPF account balance increase by $28,118.64 with these interest credited in..
I always emphasize that the CPF act as the Triple AAA Bond in our portfolio and if you are still young , you should treat it as long term AAA Bond with only exception that you can see but can't touch at this moment. But I think we should not ignore the power of "compounding" effect if we are talking about 20-30 years kind of "lock in " period.
Again, no right or wrong , some may think 20-30 years is too long and there is always a " policy risk " involve in this regards.
My Way Is Not The Only Way
W have regularly done our RSTU while still being employed to save some personal income tax and also doing some transferred of $ from OA to SA from time to time. Both our SA accounts already exceeded the FRS and we will just let the interest compound year by year.
Another aspect of growing your CPF balance will be the money spend on housing. One will need to find a balance on how much you wanted to spend on your housing. As I mentioned in my previous blog post , we started with smaller HDB flat and then upgraded to our current 5Room flat when our salary increased and having more balance in our OA account eventually.
Remember , CPF is not a "Super Hero" that be able to cover all our need and requirement for retirement and housing. Sometimes, we will need to strike a "balance " among these two in order to have sufficient fund for our future retirement.
For me , this " untouchable " CPF balance is kind of cushion and a final safety net for us. It gave me a little relief and peace of mind by knowing that I will still have close to a Mil in our CPF balance no matter what happen to my equity portfolio , when seeing your equity portfolio down by more than -30% at one point.
Well, as I said, you will need to do your own calculation and planning on how to grow your CPF money base on your own circumstances and commitment. Definitely not "my way is the only way" and "one size fits all" kind of approach.
Our CPFIS Report Card for 2020
Well, some may choose to deploy their money in OA to invest under CPFIS and hope they would be able to beat the interest rate given by CPF Board.
Okay , another way of growing your CPF money will be investing through CPFIS , of course this will be subjected to market risk. You may try if you think your returns can beat the 2.5% interest given ( from OA ) since I am just using OA balance to invest.
Well , I might be the lucky one that still be able to beat the 2.5% interest rate but you may notice that majority of the returns came from "dividend " as overall still suffer capital lost of around -$2K because of my investment in Keppel Corp and SembCorp Ind. where the share price are not doing well due to challenge from Oil and Gas Industry.
My SRS Account
As I blog before , I have contributed 2 years ( $12,750 x2) into SRS account to save my income tax prior stop working in 2015.
I am happy to see that the total Profit & Dividend amount had exceeded the amount of my initial contribution.
Okay , enough taking about CPF and SRS , today is the 1st day of 2021 and most of us still in Holiday mood. I would like to wish all A very Happy and Prosperous New Year 2021 , let's pray and hope that the Covid-19 pandemic will be over soon.
For time being till we have the vaccine for all , please Stay Safe and Stay Healthy.
Some photos taken in the past two weeks during our morning walk / Jalan-Jalan.... from Lower Peirce Reservoir to Lower Seletar Reservoir :