On the first day of 2024, just like usual, I woke up early to enjoy my me-time. I opened my CPF account to check if the government’s New Year’s red packet (CPF interests) had been credited. However, I discovered that the system was still under maintenance. It was only after 8 AM that it could be accessed 😅. Later, I received New Year’s greetings from CPF’s official Telegram account along with six financial tips.

1️⃣ Check Your CPF’s Added Interest

CPF interest is calculated monthly and distributed on the first day of the new year. Surprisingly, CPF Board’s first tip is about checking the interest, which may seem inconsequential. However, this small act encourages us to pay attention to personal wealth management and understand the importance of savings and compounding.

2️⃣ Plan Your Yearly Tax Strategy

Tax planning doesn’t need to be a last-minute rush to top up CPF and SRS (Supplementary Retirement Scheme). If you have extra money intented to be contributed to retirement savings, you can do CPF top up at the beginning of the year. This allows you to earn interest throughout the year. Additionally, CPF funds can be invested.

SRS has lower liquidity and withdrawal is subject to tax regulations, so it’s not really necessary to contribute if you are not benefit much from the tax reduction. I use a spreadsheet to track family income and various tax-saving initiatives to determine the SRS contribution. For example, if we’ve reached the tax savings limit of 80k, there’s no need to contribute further.

My husband utilizes his company’s donation matching policy to make regular contributions, effectively offsetting the added tax while contributing to public good.

3️⃣ Review Your Housing Loan

Recently, when selling our house and reviewing documents, I discovered that the floating interest rate on our mortgage had reached over 4%. Even though the monthly deduction statement indicated an increase of over 1000 dollars, I couldn’t find the specific interest rate statedd anywhere. Regularly reviewing your housing loan becomes more critical during periods of high interest rates!

4️⃣ Update Your CPF Nomination

CPF nomination allows you to specify beneficiaries to inherit your CPF savings according to your wishes. Without CPF nomination, the distribution of your CPF savings will be governed by the Intestate Succession Act.

Without CPF nomination, your family need to expend additional time and resources to inherit your CPF savings.

5️⃣ Reassess Your Emergency Fund

Maintaining an adequate emergency fund is crucial, but having excessive cash savings could mean missing out on higher-return investment opportunities. Depending on your family situation, job stability, and risk tolerance, adjust your emergency fund accordingly.

6️⃣ Review Your Insurance Coverage

I’ve written extensively about the importance of insurance and shared some of my own insurance stories. Regularly review your insurance coverage for yourself and your family. Don’t wait until an insurance broker promotes products to you.

Making family financial planning a New Year’s resolution is also a great choice. As for my New Year’s resolution, it’s to continue sharing my financial stories, investment and financial learning notes, and maintain a blog that encourages financial discipline.