Friday, 23 October 2020

More CPF Top-Ups? More First Timers Below 35?


More CPF top-ups, people below 35 saving for retirement: CPF

Like ink blots, we see what we want to see.

What do I see?

1.  Big daddy definitely has capitulated. 

Remember when SingTel shares were sold to the general public at a "discount"? 

Was it not to encourage share ownership? 

Same with CPFIS. 

Anyone attended those road shows or workshops to make our CPF savings grow faster through investing?

The fact that after SingTel, no more discounted share offers to the general public is quite telling...

2.  That's a lot of money on the table up for grabs!

From snake oil landowner perspective, I'll call my shepherds to wake up their ideas! 

That's a billion plus that's not siphoned off in fees or commissions!?


You go out and kick our flock of snake oils to sell into these CPF voluntary "savers", the wonders of compounding our investment returns! 


Go sell a mutual fund, individual stock, ETF, anything! 

Structured products or insurance policies even better! The margins are great!

3.  A third are first timers below 35?

I mean for old fogeys, its easier to understand.

Especially those who have discovered despite spending decades in investing, and despite throwing thousands of dollars on books, courses, workshops, and masterclasses; its a case of the more you invest, the more you lose...

STI not in crash territory (below 2000 in my book), yet if you look at some STI component stocks, they are below the lows of March 2009... 

Not exactly confidence boosting, is it?

But below 35?


So all that FIRE talk by millennials are just that? Talk?

Am I right to say all these first timers voluntarily contributing to CPF have given up on their dreams to retire by 35?

4.  Different feet; different shoes

I find it quite comforting through this watering hole, I'm in contact with youths who are not adverse with taking risks. Take for example, cryptos. 

There's one in our community who became a millionaire with cryptos. Good for him!

We need a balance. 

I'll worry for Singapore if the majority of youths are risk adverse...

Young, go chase rainbows! (Besides chasing skirts)

There's all the time in the world to capitulate in our later years. 

Save More will always be there for us. 

Money lost can be recovered; time lost is forever gone...

Earn More is hard. 





  1. Below 35?

    Some might be already climbing up the Coporate leader paying plenty of tax.

    So the top up as compared to SRS is cool. Imagine u are near the top brackets.

    Also, u top it up. U can still invest in Singapore shares.


    It's a calculated move imho

    Those toping up are unlikely business makers ...

    1. Sillyinvestor,

      I'm not so sure about the young corporate high flyers...

      People who are successful in their day jobs have access to private banking services. And no wealth planner would recommend voluntarily contribute to CPF...

      You can't charge fees or commissions for that!

      No. My theory is that these are youths who can't stand the heat of the investing kitchen...

      Of course there will be cases of those smarter ones who have every intention of using their voluntary contributed CPF as a "parking lot" (pays more than money market funds) while waiting for the opportunity of a life time to appear - be it properties or equities.

      How to tell them apart?

      These savvy ones will NEVER put money into the Special Account.

      Money in the Ordinary Account can be used for properties and quite a few equity-linked investments.

      But still, there are rules and conditions like caps and max % share, etc.

      Below 35 and you put money into Special Account?

      Yield hog alert!!!

      That's the price yield hogs have to pay for that extra few percentage points of interests. Nothing is free!

  2. Clearly u dont seems to view it from tax savings perspective. Any amount save from ah gong taking is important. At 15% bracket you are extracting the immediate return and use it to roll for riskier asset class. Furthermore topup amount is not that high or significant right

    1. Zdm,

      You have answered your own question.

      At max $7K tax relief per calendar year, yup, the tax savings angle is at best, "nice to have" ;)

      Fully agree with you that the top-up amount is not that high or significant - hence it won't move the needle much anyway...

      I noticed you mentioned 2 things that I find "interesting".

      1) If someone is not adverse to taking a punt with riskier assets, why would anyone want to max out the voluntary contributions limit of $37,740 per year, just to enjoy the max tax relief of $7,000?

      Lock-up big money just to use small money to punt?

      Unless you mean its because we are speculating with small money (not scared money), we are mentally better off as an edge?

      2) Any amount saved from ah gong is important? Definitely agree! Who likes to pay taxes?

      But why part with money in your pocket to park it with big daddy then?

      For old fogeys coming down the mountain who have made their money in properties or shares, I can empathise. Last thing we want is to lose it all back to the markets.

      These are not the buy-and-hold parrots. These old fogeys know when to SELL and walk away from the casino and never going back!

      But youth below 35 voluntarily contributing to CPF?

      I just find it a little early for "capitulation"...

  3. Hi Smol,

    I think it just means that more people are crossing $80k annual incomes at a younger age, where they start to see double-digit marginal tax rates. :P

    The article frames it in a 2-pronged manner: building up retirement funds early, & income tax savings. I suspect the tax avoidance is the main motivation and the other part is more propaganda. Lol.

    Wonder if SRS also increased inline with the RSTU increase? If so it'll be very telling! :)

    I'm sure these younger people have approached it from a wider portfolio angle, & that they have plenty of other liquidity for other investments. ;)

    Anyway it just means that CPF is well funded & GIC has that more money to invest! Long term OPM, hoho!

    Btw under Mercer's ranking, CPF is number 1 in Asia & 7th in the world, lol.

    Allianz's survey not so flattering for CPF though. (paywall or use nlb app to see full article)

    And according to Natixis, sucks to be a Singaporean retiree! LOL!

    1. Spur,

      We are pretty much on the same page ;)

      Especially if those under 35 are approaching it from a wider portfolio angle.

      Its the educated way of saying just as long CPF is a smaller part of our total networth, all is well :)

      Must say the article is a well written PR "propaganda" piece!

      I would take the Mercer's ranking with a POUND of salt.

      I've always remembered our CPF system was kind of ranked in the middle. Not the best; not the worst.

      Reason being our CPF tries to do too many things at the same time... Very rojak!

      Its first and foremost a home ownership scheme? (One of the best social engineering tool)

      Then mix with medical and health insurance...

      A university fund for our children.

      An investment and opportunity fund (later discovered not fit for purpose for the many)???

      I guess big daddy is trying to undo the sins of the past. Maybe it remembered WHY CPF was created in the first place?

      Now its back to where they started (初心):

      Children, let's SAVE for our retirement!


  4. Ever wondered if the 1/3 was used to lure out more 2/3 in the article?

    Now, its not just insurance agent vs insurance agent or property agent vs property agent, but a cross border "fight".

    1. Small Time Investor,

      There are around 3.9 million active CPF members as of March 2019.

      198,000 members top-up recently from Jan to Sept 2020.

      To put it in context, those who voluntarily top-up are the MINORITY - at best 5% of active CPF members?

      Percentages are the easiest to "manipulate".

      Write its an increase of "34%" over the same period last year sounds a lot sexier than reality ;)

      An increase of "70%" over last year for those under 35 is even more power!!!

      Remember the a million at 65 movement? Its just optics.

      The fine print says its really for TWO persons.

      Make a guess why they don't write its $500K at age 65?


      I just feel sorry for youths who can't think for themselves.

      At one time, they were told to grow a second wing.

      Don't just stay in Singapore. Venture overseas!


      Be adventurous!

      Be curious!

      Go chase rainbows!

      Dare to dream!

      And then this?

      Left hand not talking to right hand???


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