I would like to share on my knowledge for the CPF on Ordinary / Special / Medisafe. In times like COVID19, we should made our savings work harder. If you are a Singaporean just like me, you will definitely be interested on this.
Do you know that as of current the
- Ordinary is earning 2.5 - 3.5%
- Special is earning 4 - 5%
- Medisave is earning 4%
In times like this, won't it make more sense to invest into CPF special account? By pumping cash into special account, you will earn more interest and also gain more buck for your special account when you reach 55. When you reach 55, it is mandatory to have a retirement account whereby you can opt for 3 options. If you are able to accumulate $181k by age 55 with combination of ordinary and special account, this amount can be set aside to retirement account whereby you can get your monthly retirement savings when you reach age 65. Depending on the options you choose, you can get around up to $1500 per month. With 4% interest rates, it is definitely an option to boast the savings.
And if both husband and wife set aside this minimum sum, imagine you have $3000 per month to spend without doing anything for the rest of your lives. This will lessen any burden to your children as well as your next of kin.
Those who are cash rich can pump cash into the special account and enjoy tax savings.
Those who are not cash rich but who have no use of the ordinary account can transfer to special account but do take caution. Once you transfer from ordinary account to your special account, it is non-reversible. Do consider carefully and clearly. I myself will definitely want to allocate more funds to my special account if situation permits and enjoy the additional percentage interest gain from special account.
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