CPF has been a much talked about topic in recent years. However, most discussions has centred on how it works, why it’s good etc. Little has been discussed on how best to work with it to optimise savings for retirement or for monthly expenditures.
Make CPF our savings
Our CPF savings comprises of three accounts: ordinary account (OA), medisave account (MA) & special account (SA). It is funded by us and our employers’ monthly contributions. For different age groups, a certain percentage of our salary goes to the respective accounts. The table below shows the allocation rates.
CPF OA
In my opinion, the CPF OA should never figure prominently for retirement. It should be utilised almost fully for our housing purchase. This means we should purchase homes where the loan’s monthly instalment is approximately 20% of our salary. This is so that our mortgage instalments are funded by the OA ...
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