For the benefit of younger readers, the reader who hit the FRS in his CPF-SA at age 30 has decided to share his thoughts in great detail.



Reader says...



This is not about me per se. It is also about helping the next young person who is thinking of topping up his CPF. 🙂



Everyone has different backgrounds, incomes, obligations but sharing some reasons for me to hit the FRS early and to fully maximise our CPF systems.







1) The yearly increase in FRS should be covered by the interest of 4% each year.



This means you are likely to meet the FRS when you hit the retirement age.



I estimate the FRS to be approx $346,815 in 25 years assuming 3% increases but my SA would be a lot higher since it is compounded at 4% and my contributions to SA from work is not added in yet as well as the flow over of interest from MA.

















2) Hitting the FRS at 30 means that I can allow for the FRS to compound for at least 25 years till the milestone age of 55.



25 years isn’t a very long time away in my opinion but the compounding can be substantial.



It would be about 2.67x the current amount and likely I would be able to withdraw if I need or aim to hit the ERS.

















3) If CPF LIFE is still around by my retirement, it will likely be able to provide me with a decent cash flow when I am not working.



In fact, I don’t look to retire early.



I look to still be gainfully employed till as old as I want to.



The key is to allow me to have a choice in doing what I want at that time and this changes with age!



















Some tips of what I used to hit the FRS:



1) Do OA-SA transfers when below 30. I fully transferred my OA to SA at one point in time.



2) Do CPF SA top ups yearly since I started work (taking advantage of $7k tax relief at the same time) and in some years I topped up beyond the $7k if I received good bonuses.



3) VC to your OA/SA/MA and thereafter transferring the OA amount to SA.



4) Used my CPF OA to buy stocks before HDB wiped out the full sum for deposit and thereafter sold the stock and transferred it back to my CPF OA, follow by step 1 again.



5) Using full cash to finance your property and leave the CPF accounts untouched.















I also do not advocate paying off HDB early because I treat them as good debt.



The compounded interest in my CPF (at 2.5%/4%) is substantially higher than the interest saved (2.6%) over 30 years.



This point is difficult for most to see because they compare 2.6% minus 2.5% and they think they are saving on the interest.

















Separately, I am obligated to get HPS when taking HDB loan so if I pass on, at least the insurer helps me to pay more.



Ultimately you need to manage your property purchase which I feel is the main expense of a typical Singaporean apart from food and there is honestly no need for a car (I have 2 kids).



My BTO cost less than my 3x annual income. (Live within means like what our PM says)

















My background:

Went to Poly, NS, 2 years of Private University after that.



Have 2 young kids and my wife stays home to look after them.



I am just a normal salaried worker with starting salary was $3k like most fresh grads but my annual compensation is a low 6 figures now after 6 years. Good luck!

















Related post:

1. FRS in CPF-SA at age 30? Yes!

2. How to grow our CPF savings?

3. 4 ways to boost our CPF savings.