All about CPF accounts and CPFIS

It is very interesting to know that many people are interested to know about the CPF. Hence, I’ve decided to do a simple part series that focuses on selected and focused information so that it doesn’t take too long to read and understand. In my previous CPF series, we discussed the increase in CPF contribution on Ordinary Wages aka Salary.

CPF is a complex retirement module indeed and it has different accounts. CPFIS in turn has its pros and cons. One needs to understand it to use it to your own advantage. Most of these come at retirement as a motivation or tax deductibles. That said, it works differently for everyone so good to be in the know. One can be anti-government but we should applaud a strong and stable governance. This in turn will relate to a trusty CPF system not everyone can replicate.

Types of CPF account and what they can do

Ordinary Account:

Though CPF is restrictive OA is the most flexible out of all three accounts before one turns 55. This is the account that one can use to invest a portion into selected CPF-approved investments (CPFIS), gold, approved insurance, and also property payments. One can look at index investing using a Robo Advisor of some sort. such as Endowus or StashAway. Endowus ticks a little better for me for the investing portion. If we look at the iShares US index Fund S&P 500 that Endowus offers to track the S&P500 (100 years of historical performance). I also have my funds consistently invested in them and it has worked well. What I really like is that they care about who invests with them and the fees.

You can check them out here at Endowus or in my previous posts which I slowly grew to like over 2 years. Asset Allocation does not time the market and during times when I’m distracted, I do not need to log into my app to proceed with my own adjustments or take action. (These take time and effort)

Special Account:

This account builds the Retirement account that will eventually be used in the retirement account in the form of an annuity. More restrictive than the OA, it has limits and can only be utilized for retirement-related financial products (Nothing much can be done in this account) It is also known that OA can be transferred to MA – This is well known to be irreversible once you have done so. Do consider your circumstances before you do anything)

Medisave Account:

This is the most restrictive of all and as it states Medisave means it can be used for certain medical payments with a limit. The MA account is also allowed to be used to purchase medical-related insurance.

Retirement Account:

This account is non-existent until you reach 55 years of age at the point of writing. This is the combination of your OA and SA to form the annuity payout.

• Voluntary Housing Refund

• • If you have used CPF to purchase your house and have excess cash. One way is to kind of payback voluntarily. However, recently the cash returns outweigh that of CPF returns so with careful management, it does seem like it is better to hold cash but it is a better yielding instrument for now.
  • Too complicated? Leave it as it is and put the cash via this method to earn that CPF consistent return.

For CPFIS/Investing – The reason for Endowus

Like a broken recorder, why do I like using them for now:

• Endowus is the first and only robo-advisor to be approved by the CPF board.
• 100% trailer fees back to the consumer, not the fund management fee. This is really one of a kind I’ve seen so far.
• They do have a decent team that makes sense when introducing their platform in my personal opinion.
• I believe all retail investors should try them out because of how they are trying to disrupt investing and make investing work for everyone.

If you decide to sign up with Endowus, do remember to use my referral code: https://endowus.com/invite?code=EDZ8M

Disclaimer

If you like what you are seeing, do remember to check them out and do your diligence. There is no one-size-fits-all investment strategy and no one solution to life. Join my telegram group to find out more about deals and join the community to connect for ideas: Life Journey Telegram

If you like what I am sharing or if it resonates with you, do use my referral codes here at Referral Services