Sunday, 28 January 2018

19 Year Old Student receiving $403.41 angbao from Government?

It had been long since the last CPF post isn't it? It it especially strange when this post is coming from a 19-year-old kiddo.

While it is the time of the year again and many financial bloggers around have been blogging about CPF, I guess it's time to take a look at the angbao given by the government! 

A quick peep into my CPF portal while waiting for the pie chart letter, this is what I see from the interest segment..

Not that bad! I've received a $403.41 angbao from government! While I continue to work around, I did receive contributions for my work after my last couple of months. This had created a bigger amount than expected my latest CPF post. 

Take a look at the big part in the middle part (SA). That is right. The big chunk there is due to the additional interest received when I did the transfer from OA to SA earlier on. This event had created an additional 1.5% of interest than it is while it is still in the OA.  

The transfer from OA to SA is an irreversible act and to those who are contemplating to do so, here's a few thing that you will need to look out on. 

1. The 5% interest on SA only applies for the first 40k, subsequent amount will only get you 4%. While interest account will get you 3.5% for the first 20k. Subsequent amount will get you 2.5%.

2. As this action is irreversible, please do not do the transfer just because you want a higher interest IF you're looking to purchase a house soon, paying mortgage, insurance, investment or for your kids education. Be sure that there is sufficient funds in your OA when you do so. 

3. The earliest you will be able to access to the funds in SA is 55 year old (as of today). This policy might be subjected to changes along the year and the age to gain access to funds in SA might change. Should to policy timeframe change and raised in the future, you will need to wait longer for the funds inside to be utilized. 

The CPFIS-OA is also not to be left out as this money could be doing work for you when a market crash come and it could be used as an additional war-chest. 

I've mentioned in my earlier blog post that the OA to SA transfer is done as I clearly do not need to funds there in anytime soon for property. This is done to obtain a higher interest for my retirement which will come 35 years later (based on CPF's minimum age to access SA funds)

The SA now serve as a high yielding risk-free account for me and is doing the work now. For that transfer, I've received 1.5% higher interest or $67.76 in additional to the normal 3.5% interest. 

As the letter from CPF comes in due time, I shall take a deeper look into it and write more about this.

P.S: I did not receive any inheritance for my CPF funds and they're acquired through years of part time job. 


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