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4 by $400,000 Relay - SA, OA, SRS, Spares (SOSS)

Updated: Jul 1, 2021

In the formulation of the 4 x $400K Financial Relay, I am mindful of 2 provisos:(*Not accounting inflation)

  • A solid base that serves as the foundation so as to pursue investing without much apprehension. It revolves primarily with attaining prevailing Basic Healthcare Sum (BHS) and Full Retirement Sum (FRS) for Medisave Account (MA) and Special Account (SA) respectively.

  • Atypical to any 4 by 100m relay, this 4 x $400K financial relay is not a sprint but an enduring jog, albeit it still requires great chemistry and collaborative passing of the baton. This jog is scheduled to end by the inaugural Retirement Account (RA), purposefully set by CPFB at the age of 55.


S - The first runner sets the pace, and with SA past FRS thankfully before hitting 35. Simply, even without future mandatory contributions (MC) from employment or voluntary contributions to all 3 CPF accounts (VC3AC), the initial $200,000 would balloon to $400,000 in 18 years based on the 4% floor interest, while not even accounting for the 1% extra interests for the 1st $60K. Furthermore, I am gainfully employed and I would be glad to Retirement Sum Top-up (RSTU) SA but “unfortunately” the gate shuts with the FRS limit.

O - The next runner as the baton in-transition needs to move in tandem with the first. Case in point, OA with 2.5% floor interest can never keep up, thus MA with BHS saves the day. The overflow function of MA will supercharge OA accumulation with SA being FRS. Moreover, OA has the highest CPF allocation rate of 21% (my age group) bringing the total to a cool 30% out of the total 37% CPF contribution rate. Additionally, RA is formed by money funnelled from both our SA and OA. The novel SA shielding hack requires OA monies to supersede SA monies for bulk or all of RA FRS/ERS. Evidently, it can be via mandatory or voluntary contributions, and housing refund. However, to generate $400,000 by 55, can only be made possible with prudent use of OA monies on housing or through CPFIS (topic for another day).

S - The penultimate runner off the block is just as important. The Supplementary Retirement Scheme (SRS) is a voluntary scheme to encourage individuals to save for retirement, over and above their CPF savings. Contributions to SRS up to $15,300 annually are eligible for tax relief. Investment returns are tax-free before withdrawal and only 50% of the withdrawals from SRS are taxable at retirement. Funds sitting idle in SRS account after 26 years of maximum contributions will approximately yield the proposed $400,000. Mathematically, it means, the journey must begin at age of 29 to meet the 55 retirement timeline. But short of injecting more funds without relief, the returns of SRS can be increased by investing, whereby returns above 5% is very possible (another big topic).

S - The final lap by the strongest runner of the financial team hoarding fiat currency under the notion of cash is king, still serves its due purpose. This spares requires both an investment and savers mindsets. Spend with prudence, invest wisely, save aggressively, there are so many sound pitches out there whereby I do not need to iterate here. What I may add is to invest with a long term horizon and a clear narrative, one that you have deliberated, so that you can stand triumph at the end of the financial relay, hopefully together, alongside with me.

As with most endeavours in life, the key to success is knowledge and actions. Exclusivity in one is undesirable and at times, catastrophic.


As content gets commoditised with technological advancements and fungible resources, readers should comprehend materials for informational purposes ONLY and NOT be taken as tax, legal, business, or investment advice. It also does NOT constitute as an offer or solicitation to consider any investments or securities. Case to point, the content is not directed to any individual and may not be used to evaluate or make any investment.

Do note that this is not financial advice. Please always do you own due diligence all the time and consult relevant professionals or financial advisor. (Or a chat with me!)


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