In a Channel NewsAsia (CNA) article on 18 Sept, it reported that more people in Singapore are making voluntary contributions to their CPF account. According to the CPF Board, these top-ups amounted to about S$500 million in 2014. That is 25% more as compared to 2013. A former investment analyst Lim Chin Yong, a 56-year-old, is one of the those who made voluntary contributions to their own CPF account.
Guesstimate on the Age Categories of these Contributors
|Source: Screenshot from CNA|
It would be great if the report indicated a breakdown on the age categories of these contributors. There were nearly 74,811 top-ups last year (2014).
My guess is that people nearing their retirement might be the bulk who are making these voluntary contributions to their CPF account. People like Lim Chin Yong.
If I am close to retirement age, and I have spare cash, and I was looking for alternatives to earn the extra interest, putting it into my CPF retirement account might be an option for me.
What about voluntary contributions to my CPF now?
I personally have not made any voluntary contributions to my own CPF account. I contemplated if I should transfer savings from the CPF OA to the CPF SA. But I have not done so.
People, in my age category, might not see voluntary contributions to CPF as a viable option in many fronts. First, the transfer is irreversible, especially so for CPF SA. This creates inflexibility. There might be options for me to be investing in a higher yield (more than 4%) investment. There might be reasons you need a sudden sum of money. Just imagine depositing your money in the bank but the withdrawal age is 55-years-old.
This inflexibility puts any personal major top-ups on hold.
Having said that, I might consider transferring a small amount (max S$3,600) from my CPF OA to my CPF SA yearly to accumulate the higher interest over a long period of time. But no cash top-ups.
To sum up, if you decided to top-up your CPF, please remember it is irreversible. Do not totally rely on your CPF for retirement. You should have other retirement pillars to sustain your lifestyle after you retire.