I started serious Investing Journey in Jan 2000 to create wealth through long-term investing and short-term trading; but as from April 2013 my Journey in Investing has changed to create Retirement Income for Life till 85 years old in 2041 for two persons over market cycles of Bull and Bear.

Since 2017 after retiring from full-time job as employee; I am moving towards Investing Nirvana - Freehold Investment Income for Life investing strategy where 100% of investment income from portfolio investment is cashed out to support household expenses i.e. not a single cent of re-investing!

It is 57% (2017 to Aug 2022) to the Land of Investing Nirvana - Freehold Income for Life!

Click to email CW8888 or Email ID : jacobng1@gmail.com



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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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Friday, 24 March 2017

Taking HDB Housing Loan : Wipe Out CPF OA Or Max CPF OA to SA???

Here is the Maths!

 Know the difference

 Choose what is right for you as couple. 

 Start talking. LOL!

 Trust but verify - SMOL


Source --> Enquiry on Monthly Installment








Posted by Createwealth8888 at 08:51
Labels:

13 comments:

  1. Createwealth888824 March 2017 at 09:05:00 GMT+8

    Question is always about who are you? Saver, investor, or one thing less to worry kind of investor like me.

    ReplyDelete
  2. Singapore Man of Leisure24 March 2017 at 10:23:00 GMT+8

    CW,

    It's always start with Who Am I?

    If I don't know how to invest or suck at it, then the savings route of compounding INTERESTS would be more suitable.

    If I am investment savvy (that means got track record and not based on hope or plan), then I can take advantage of Other People's Money and use leverage to enhance my compounding RETURNS ;)


    Your mileage and my mileage different. Trying to be someone else usually end in tears...


    ReplyDelete
    Replies
    1. Createwealth888824 March 2017 at 10:51:00 GMT+8

      Are you Grasshopper or Ant?

      Ant always like worry more?

      Ownself check ownself. How often you worry and lost sleep at nights when something bad happen?

      Delete
    2. Createwealth888824 March 2017 at 10:57:00 GMT+8

      For married couple; also need to consider your spouse is Ant or Grasshopper?

      Delete
  3. Singapore Man of Leisure24 March 2017 at 11:19:00 GMT+8

    CW,

    LOL!

    I've become more black and white mancho - can invest or not?

    You've become more grey grey feminine - did I leave the kettle on?


    ReplyDelete
  4. TI24 March 2017 at 19:19:00 GMT+8

    For many of the questions ppl like to ask, very often the answer is "it depends", and ppl don't like this answer.

    I don't like to wipe my OA. Neither do I like to trsf OA to SA. I would rather owe $100k and have $100k in OA. The impt question is, why?

    ReplyDelete
    Replies
    1. Createwealth888824 March 2017 at 19:22:00 GMT+8

      You are not taking HDB loan. Right?

      Delete
    2. Createwealth888824 March 2017 at 20:30:00 GMT+8

      No SA. Same rule till now

      Delete
    3. Createwealth888824 March 2017 at 20:34:00 GMT+8

      Q

      Do I need to wipe out my CPF Ordinary Account (OA) savings before taking up an HDB concessionary loan to buy a resale flat?

      A
      Yes, it is HDB’s requirement for you to utilise your CPF OA savings entirely before granting an HDB concessionary loan.

      Delete
    4. TI25 March 2017 at 17:21:00 GMT+8

      HDB loan :) When I bought my apartment, my OA was so little (under $20k) so there was no way I could 'lock it somewhere else' and prevent any of it from being wiped.

      If I had a choice now, I would utilize a portion of it (CPFIS etc) to prevent a full wipe. To me, the cost of borrowing is 0.1% (money in OA 2.5% vs money loaned from HDB 2.6%), and it buys me flexibility to use the OA money when I want to.

      Delete
    5. Createwealth888825 March 2017 at 17:40:00 GMT+8

      Member can only preserve up to 35% and the rest of it still wipe off which many members are not too happy about it.

      Those "happy" days pre AFC when members could hoot what they like in the stock market with no restriction. They could even "happily" take their profits and spent "happily" on whatever they wanted but after AFC ; this "happy" CPFIS scheme have made many "happy" members to become misery retirees. Few of them were sitting in the same office level as me as ex-colleagues. When I mentioned this story at the CPF talk; quite a number of participants burst into laughter. Now what had actually happened like a laughing story. Spent winners out of CPF OA but kept losers in CPF OA for retirement.

      Delete
    6. Createwealth888825 March 2017 at 19:02:00 GMT+8

      Close CPFIS account and then no more Govt biz. You can go and do what u want without dragging CPF name down with your CPFIS. LOL!

      Delete
  5. Createwealth888824 March 2017 at 20:43:00 GMT+8

    Notice Paper No. 119 Of 2016 For The Sitting On 24 March 2016
    Question No. 215 For Oral Answer

    MP: Mr Zainal Sapari

    To ask the Minister for Manpower whether HDB can reconsider allowing HDB home owners who do not have sufficient savings in their CPF ordinary account to utilise their CPF special or retirement accounts to manage their home mortgage arrears.

    Answer

    1) CPF members can use their Ordinary Account (OA) savings for the downpayment, monthly instalments and mortgage arrears for their housing purchase. The Special Account (SA) savings are generally preserved for members’ retirement needs, and cannot be used for housing purposes.

    2) When members turn 55, a Retirement Account, or RA, is created. Monies from the OA and the SA are transferred to the RA up to the Full Retirement Sum. The OA continues to exist even after the RA is created. Any remaining OA balance, as well as new contributions to the OA after the age of 55, can be used to meet housing needs. In addition, any RA savings in excess of the Basic Retirement Sum can also be used for housing purposes.

    3) HDB proactively helps flat owners manage their arrears early. If their financial difficulty is temporary, HDB will consider reducing or deferring their instalments to help them resolve their arrears. For flat owners who can no longer afford to keep their flats, HDB will help them explore more options, including right-sizing to a more affordable flat.

    4) For CPF members who do not have sufficient OA savings to meet their housing needs, we have exercised flexibility where cases merit it. For example, we have, upon appeal, allowed CPF members to use their RA savings that originated from their OA to pay for their housing, even if their RA savings are below their Basic Retirement Sum.

    5) Overall, we need to strike a balance between allowing CPF members to use their SA and RA savings for housing needs and safeguarding such savings for their retirement needs, so as not to compromise their retirement adequacy.

    ReplyDelete

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