As from April 2013 my Journey in Investing is to create Retirement Income for Life till 80 years old for two over market cycles of Bull and Bear.

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This blog is authored by an old multi-bagger blue chips stock picker uncle from HDB heartland!

"The market is not your mother. It consists of tough men and women who look for ways to take money away from you instead of pouring milk into your mouth." - Dr. Alexander Elder

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Sunday, 20 September 2015

Top Up CPF SA From CPF OA? Depending On Who You Ask! (5)

Read? Top Up CPF SA From CPF OA? Depending On Who You Ask! (4)

Here not much theory but more hands-on experience!

This wealth formula from CW8888. Die die you must understand!

Wealth = Asset Value + Cash Flow

Trust but verify - SMOL

Verify. Verify. Verify till you fully understand the huge difference between Asset Value and Cash Flow.

Transfer from CPF OA to CPF SA?

Uncle8888 did it only once; but he couldn't really recall why he did it. Probably, at that time he could have been seduced by some sexy article somewhere on the magical 4% CAGR CPF SA compounding machine. But, the following year, probably after reading too many investment and finance books; and more hands-on practices in the stock market; he became wiser and was able to overcome the sexy temptation of magical 4% CAGR CPF SA and not getting himself locked more into this One Way Traffic.

Wealth formula again!

Wealth = Asset Value + Cash Flow

Topping up CPF SA is nice and risk free compounding; but it only has asset value with cash flow locked till 65.  For the younger CPF members they may see locking up to 67 or more.

From 55 to 65; asset richer but no cash flow from this richer asset. Shiok?

Looking back; Uncle8888 was happy for not topping more into his CPF SA from CPF OA; otherwise he could have joined the two jokers to shout for Return Our CPF!

He was personally affected by the shifting goal post from 55 to 60, 60 to 62, and then 62 to 65!

Imagine he was happily topping every year to his CPF SA and expecting to receive his cash flow at 60 but the goal post was shifted to 62 and then shifted again to 65 before he reaches 55. Tua Tulan! Right?
No. Uncle8888 didn't tulan as he didn't put more. Now with a bigger lump sum in his CPF OA; after 55 at his own time and own target once a year he can decide how much cash flow he wishes to withdraw to spend or invest for higher yield when Mr. Market presents him the rare opportunity.

Compounding asset is wonderful; but cash flow is indispensable when we seriously need them.

People top up their CPF SA. You top up?

People has plenty of liquidity. You also have?

Can anyhow follow?






  1. our understanding of cash flow is different.

    but i agree with the message.

    bo pian. he says he talking to himself.
    so those who follow and regret, can they hold him responsible?
    or they believe him that anyone "talking to himself" out loud with a loud hailer is absolved from responsibility?
    or should they hold themselves to blame and "regret/repent"?

  2. At 55, if you leave the minimum, Minimum Sum in the RA you can withdraw the excess. This would increase cash flow right?

    1. Better hope PAP don't forget and raise minimum sum and draw-down age

    2. You are correct. Once you are vested at 55 (ie after meeting your minimum sum for your cohort year) you can withdraw whatever excess from your OA, SA, MA, CPFIS. If you retire and remain unemployed, you can request for multiple withdrawals from CPF depending on your needs, just like treating it like your personal Saving Account. It has absolutely nothing to do with the possibility of PAP forgetting and raising your minimum sum at DDA. Once you meet your minimum sum at age 55 for your cohort year, it stays at that sum.

    3. This comment has been removed by the author.

    4. After i set aside the min sum in my RA, i can't withdraw the remaining amt in my OA and SA if i am still working after 55 ?

    5. Of course you can; but; many of my peers choose Don't Return Our CPF. LOL!

      It is more of CPF SA and RA policy risk and shifting goal posts for younger CPF members in their 20s to 40s. So far, Govt only touch CPF SA and CPF RA and leaves CPF OA intact.

      Those in 50s should be safer as PAP has just won and don't be that stupid to shift the goal post for those who are in their 50s. These folks will Tua tulan! For the younger ones; time will heal their pain and people tend to have short memories.

      Does anyone in their 40s now feel the frustration of shifting goal post 55 --> 60, 60 --> 62, 62 --> 65, may be 65 --> 67 soon?

    6. exactly.

      that aside, if you have your own retirement fund in cash, the cpf provides a good discretionary expenses provision. they give you pocket money from a pool that grows at 7% p.a. (i last checked in July over the CPF counter in robinson road when they introduced the new changes)

      take note that 7% is not oa sa or ma hor. lol

  3. Nope they will not forget. MS will be $191K before I reach 55 in 2020.

  4. I am also against topping up SA using cash due to increasing payout eligibility age. The tax incentive is good but not a compelling factor. On the other hand, i may consider transferring excess funds from OA to SA after fully paying for my flat. Unlike cash top up to SA, transfers from OA to SA is not locked into the CPF life. Once we meet the basic requirement sum at age 55, such transfers (with interest earned)can be withdrawn once every year.

    1. Question to seriously ask ourselves.

      Do we want to excel in our investing skills and we will do whatever to take us there?

      If yes; we need to think, think, think.

      There is big difference between compounded interest and positive compounded investment gains. CPF SA is still a saving scheme. Saving is not same as Investing.

    2. Same same but different. How many folks still confuse buying bonds e.g. SSB as investing?

      Even some investment bloggers called SSB as investment. :-)

    3. Quote from betta man:-
      "On the other hand, i may consider transferring excess funds from OA to SA after fully paying for my flat. Unlike cash top up to SA, transfers from OA to SA is not locked into the CPF life."

      i agree!
      i did just what you said when we were working.
      For me it's always better to have money in my pockets than in someone's.
      Never forget "A bird in the hand is worth 2 in the bush".
      Besides you can do anything with it in your or pockets, as you wish.
      Though our G is more than the bush.
      But anything can happen beyond your imaginations.
      Never says never in the world on money.

    4. Better to think whether we have other sources of liquidity e.g. stocks or property from XX to 67 to fund our future living then it is okay to top up CPF SA as part of asset allocation; otherwise it is still better to think properly as it is one way traffic with no U turn till 65 as of now.

  5. CW8888,

    Question: Why do we want to excel in our investing skill? To get a trophy or certificate of Grand Investing Master? or to reach our investment goal? If its the latter, then 条条大路通罗马,or 黑猫白猫,能捉老鼠就是好猫。

    I agree with the view: Make sure your cash flow is not affected before you do a top up into this one way street.

    1. Can don't want to excel by doing passive investing e.g. DCA on STI ETF or follow the Law of Large Number investing e.g. 1XX number of different stocks with periodic re-balancing.


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