In the financial markets, 2022 has thus far not turned out the way most expect it to be. The Ukraine-Russia war, record inflation, sharp spike in interest rates from The Federal Reserve Board plus the same problem that has plagued us since 2020 – COVID-19 – has made 2022 one of the most volatile years in the financial markets.
With uncertain markets, some may prefer to hold on to cash savings. Yet, with inflation at a record high – the, keeping your money in a savings account is a sure way to lose the purchasing power of your money over time. In fact, this is exactly what many Singaporeans and PRs have been doing. According to the recently publishedin cash top-ups and CPF transfers made to their own or their loved ones’ Special or Retirement accounts, representing a 60% increase from $3 billion in 2020., with about half topping up for the first time. If you are one of those topping up for the first time in 2021, thinking that you are an exception, there are also many other first-time CPF members doing voluntary top-up.
Voluntary top-ups to our CPF accounts mean usage of the funds will be limited, at least until we turn 55 and 65.The stability of the CPF interest rate is usually seen as a strength, especially during periods of low-interest rates where a CPF member would not be able to achieve similar returns in the financial market without taking on much higher investment risk.
Piece of BS!