Thursday, March 13, 2008

SMRA Interest rate

As expected, the actual SMRA interest rate is lower than the 4% guaranteed. The average SGS 10 year bond rate is 2.75%. The SMRA should be 3.75%, but due to the 4% floor rate guaranteed, its still 4%. If you have less than $60,000 in your CPF, you'll get an extra 1% (5%).

Take note though that the SGS 10 year bond rate is going to go very very low. For this year, I think it hit 2%! This is ridiculous. Lock-in your money for 10 years and you only get 2% interest, when inflation is 6.6% for Jan?

I was also wrong about the floor rate. The 2.5% floor rate is fixed for all accounts. That means even though CPF SMRA formula is 10 years bond rate + 1%, the floor rate is still 2.5%! The government really "saved" alot of money this time! And all the talk about caring about our retirement?? Yeah right...

No comments:

Visit Rhinestic's Knick Knacks @ Etsy for handmade goods and supplies!

Related Posts Plugin for WordPress, Blogger...