Investing CPF-OA before and after 1Apr2008

From 1st Jan 2008, the first SGD60,000 of your combined CPf balances (up to SGD20,000 from CPF-OA) earns an extra 1% interest. Click the thumbnail below for a cartoonised explanation.

With that in mind, here is my approach towards investing CPF-OA:-


Assuming Mr A has SGD40,000 in his CPF-OA as of 1Jan2008 and wants to invest in CPFIS approved funds. Let's say he is a Balanced Risk investor (i.e 50% Cash/ Bonds & 50% Equities).

Before 1April2008, Mr A can invest based on the following allocation:-
Risk Profile: Balanced
Allocation (Generic):
i) Cash/ Fixed Income/ Bond Funds = 50% (SGD20k)
ii) Equities Funds = 50% (SGD20k)






After 1April2008, Mr A can invest based on the following allocation:-
Risk Profile: Balanced
Allocation :
i) (No choice but to) Leave in CPF-OA (3.5% p.a guaranteed) = 50% (SGD20k) (treat it as Fixed Income)

ii) Equities Funds = 50% (SGD20k)




In both scenarios, the risk profile is still balanced. It is therefore important to view your investible monies as a whole when planning your investments.


note: The example above is made using a straightforward assumption and does not take into consideration other situations such as servicing house mortgage payment using CPF-OA.