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In this 3 part series, I will reveal my CPF Account Balances and discuss with you my long term CPF strategies to help you achieve a more fulfilling retirement life.
Today, I will be talking about the CPF Ordinary Account (OA) and how you can make it work better with housing, investing and education loan strategies!
Do check out my next two videos for Medisave Account (MA) and Special Account (SA), which are components of Social Security Fund of Singapore

CPF MA Reveal: [ Ссылка ]
CPF SA Reveal: [ Ссылка ]

00:00 Introduction

00:40 About the Ordinary Account
- Can be used to pay for many things like Housing, Investing, Term Insurance and Education with terms & conditions attached
- For age 35 and below, 23% Allocation. (E.g. $3000 Gross Salary, $690 will go to OA)
- 2.5% annual interest
- Below 55 years old, extra 1% per annum on the first $60,000
- Extra interest (capped at $20,000 for OA)
- 55 years old and above, 2% per annum on the first $30,000, 1% per annum on the next $30,000

02:21 Housing (BTO)
- 1st question Bank Loan (1.5% interest) or HDB Loan (2.6% interest)
- 2nd question Use CPF or cash to pay?
- 2.5% Opportunity cost if you have reached CPF Full retirement sum ($186K for 2021)
- If your invested assets can gain more than 2.5% e.g. 4% in S-REITs (REITS Portfolio [ Ссылка ]), better to Use CPF OA and free up cash to invest. Gain additional 1.5% annual return
- 4% Opportunity cost if you have not reached FRS
- Because you could transfer from OA-SA to earn 4% annual interest, then use your cash to fund your Housing Loan
- So only if your investment can yield more than 5% (4% return + 1% effort), then it is considered worth it to Use CPF OA to pay housing loan
- My strategy: Likely to reach CPF FRS in SA before I collect my house keys for BTO Flat, so as long as my investments generate more than 2.5% annually, more inclined to Use CPF to pay for house

05:06 Investing
- Only amounts above CPF OA $20,000 able to invest, meet $40,000 in SA
- Only specific investment products, check CPF website for the latest information
- Take note of transaction fees, and quarterly fees (Endowus Video [ Ссылка ])
- My strategy: Invest in Endowus Monthly for DCA. To earn far better rates than 2.5%
- Only do it when your CPF SA is near FRS, 4% low risk returns

07:16 Education
- CPF Education Loan scheme for approved institutions
- for full-time undergraduate degree & diploma programs under this list
- 2.5% opportunity cost

08:09 OA Reveal & Strategy
- When collected house keys and start paying for mortgage, reduce investment amount
- assumption is CPF OA monthly contribution is enough to cover the monthly mortgage payment
- Live within your means and buy and affordable house
- Alternative: Sell out some Endowus investments before key collection to reduce the loan quantum (not recommended as I want to stay invested for long term), may consider using cash to pay up.
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