Monday, July 4, 2016

Building Up Retirement Funds - Two Easy Ways?

There are many ways to build up your retirement funds in Singapore. You can choose to just keep it in the bank or find other ways to make your savings grow. Well, there are actually 2 easy ways to do so that probably helps you beat the low interest paid on bank deposits.

The first way is the Singapore Savings Bond. This is basically government issued debt sold to the public every month. Minimum investment amount is $500 with a cap of $50,000. There is no penalty for cashing out early and the principal is paid at the end of 10 years. The interest paid out increases each year. Holding it to the max of 10 years will give annual average returns of 2.6%. Totally risk free since they are backed by Singapore government

The second method I can think of is to top up your CPF account or even your spouse CPF account. You can claim tax relief ( up to $7000) and you can enjoy 4 to 5% interest depending on how much you have in your CPF. Problem is that you will only be able to touch it many years later at your drawdown age when CPF Life kicks in for you.

So what do you think about the two ways I have outlined? Leave your comments below!

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