I just topped up $1.5k into my mum's CPF Retirement Account to complete the $7k CPF Cash Top-up Tax Relief this year under the Retirement Sum Top-Up (RSTU) scheme.
I have already topped up $5.5k earlier and have explained why I did so. See related post:
Why I Top Up My Mum's CPF Retirement Account instead of giving Cash?
I have also started to make voluntary refund of $3k+ into my CPF OA account. This is a loose amount I chose from my savings account for repaying the "loan" from my own CPF OA. I have blogged about booking and paying down-payment for a HDB BTO property earlier this year. See related posts:
I decided to refund cash into CPF OA account because I do not like the idea of accrued interest incurred on withdrawn savings from my CPF OA, and compounding at 2.5% p.a rate. This accrued interest will erode into the potential profits from selling my HDB BTO after MOP in future. Even though I could potentially generate investment returns of higher than 2.5% from my cash, I could not resist the temptation of getting risk-free 2.5% returns from the government on my CPF OA savings.
Moreover, my CPF OA actually crossed the $200k milestone in June 2021 before I used it to make down-payment for my HDB BTO flat. I hope to jack back the numbers to above the psychological feel-good milestone $200k again.
In a nutshell, I decided to go against the common path that herd take - taking on hefty housing loans and paying monthly mortgage repayments, using CPF OA savings heavily to tank housing mortgage etc. In contrast, I will pay up full for my HDB BTO flat using my CPF OA savings and refund back the amount used into my CPF OA whenever I have disposable cash.
I prefer to borrow money from myself and pay back myself whenever and however I feel like it, at highest levels of flexibility and freedom.
With all these outgoing cash flows, my plan to build up war chest for next round of investments will be stifled. For the long-run, I believe all these actions are necessary for me to reap the low hanging fruits before moving on to seizing bigger 'mao shan wang' durians.
Thanks for reading. As always, stay safe and remain strong.
With love & peace,
Qiongster
5 comments:
Your hdb is only 200k in total?
Nope. More than 300k.
Hi Qiongster,
Great sharing! I think Voluntary Housing Refund is a good move. Own Time Own Target also. Can I ask if the VHR can apply to the housing grant HDB give us and we use for downpayment also?
Thank you!
Cheers,
P
Hi P,
Yes the VHR also applies to housing grant given because technically the housing grant are given and withdrawn from your CPF OA and incur accrued interests.
Cheers,
Qiongster
Many thanks for your reply, Qiongster! Will continue reading your blog!
P.S. I also count CPF into my net worth. Makes totally sense, even for early retirement planning.
Cheers,
P
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