Is it possible to achieve the CPF minimum sum with Special account alone?

While writing my earlier article on how many Singaporeans are left with little or no CPF OA balances, one question came into my mind: Is it possible to achieve the CPF minimum sum with the special account alone? Afterall giving us a 4% interest rate per year. This amount cannot be utilized easily even in investments products.

I did some simple projections in the CPF balances based on a few simple assumptions:
1) Interest rates for OA: 2.5%, Interest rates for SA and MA: 4%
I know there is an additonal 1% for the first 60k balances. However, to keep calculations simple, I left it as it is. The interest rates are also computed based on yearly basis

2) The projection is assuming the individual started working at the age of 26 and has hit the CPF cap of 5k throughout his working lifetime.


3) The individual has no additional income or bonuses.

Age	Monthly contribution	yearly OA	yearly SA	yearly MA	TOTAL OA	TOTAL SA	TOTAL MA
START					0.00	0.00	0.00
26	1,800.00	13,800.00	3,600.00	4,200.00	13,800.00	3,600.00	4,200.00
27	1,800.00	13,800.00	3,600.00	4,200.00	27,945.00	7,344.00	8,568.00
28	1,800.00	13,800.00	3,600.00	4,200.00	42,443.63	11,237.76	13,110.72
29	1,800.00	13,800.00	3,600.00	4,200.00	57,304.72	15,287.27	17,835.15
30	1,800.00	13,800.00	3,600.00	4,200.00	72,537.33	19,498.76	22,748.55
31	1,800.00	13,800.00	3,600.00	4,200.00	88,150.77	23,878.71	27,858.50
32	1,800.00	13,800.00	3,600.00	4,200.00	104,154.54	28,433.86	33,172.84
33	1,800.00	13,800.00	3,600.00	4,200.00	120,558.40	33,171.21	38,699.75
34	1,800.00	13,800.00	3,600.00	4,200.00	137,372.36	38,098.06	44,447.74
35	1,800.00	13,800.00	3,600.00	4,200.00	154,606.67	43,221.99	50,425.65
36	1,800.00	12,600.00	4,200.00	4,800.00	171,071.84	49,150.87	57,242.68
37	1,800.00	12,600.00	4,200.00	4,800.00	187,948.63	55,316.90	64,332.38
38	1,800.00	12,600.00	4,200.00	4,800.00	205,247.35	61,729.58	71,705.68
39	1,800.00	12,600.00	4,200.00	4,800.00	222,978.53	68,398.76	79,373.91
40	1,800.00	12,600.00	4,200.00	4,800.00	241,152.99	75,334.71	87,348.86
41	1,800.00	12,600.00	4,200.00	4,800.00	259,781.82	82,548.10	95,642.82
42	1,800.00	12,600.00	4,200.00	4,800.00	278,876.36	90,050.02	104,268.53
43	1,800.00	12,600.00	4,200.00	4,800.00	298,448.27	97,852.02	113,239.27
44	1,800.00	12,600.00	4,200.00	4,800.00	318,509.48	105,966.10	122,568.84
45	1,800.00	12,600.00	4,200.00	4,800.00	339,072.22	114,404.75	132,271.59
46	1,800.00	11,400.00	4,800.00	5,400.00	358,949.02	123,780.94	142,962.46
47	1,800.00	11,400.00	4,800.00	5,400.00	379,322.75	133,532.17	154,080.96
48	1,800.00	11,400.00	4,800.00	5,400.00	400,205.82	143,673.46	165,644.19
49	1,800.00	11,400.00	4,800.00	5,400.00	421,610.96	154,220.40	177,669.96
50	1,800.00	11,400.00	4,800.00	5,400.00	443,551.24	165,189.22	190,176.76
51	1,500.00	7,800.00	4,800.00	5,400.00	462,440.02	176,596.78	203,183.83
52	1,500.00	7,800.00	4,800.00	5,400.00	481,801.02	188,460.66	216,711.18
53	1,500.00	7,800.00	4,800.00	5,400.00	501,646.04	200,799.08	230,779.63
54	1,500.00	7,800.00	4,800.00	5,400.00	521,987.19	213,631.05	245,410.82
55	1,500.00	7,800.00	4,800.00	5,400.00	542,836.87	226,976.29	260,627.25
56	1,075.00	6,900.00	600.00	5,400.00	563,307.80	236,655.34	276,452.34
57	1,075.00	6,900.00	600.00	5,400.00	584,290.49	246,721.55	292,910.43
58	1,075.00	6,900.00	600.00	5,400.00	605,797.75	257,190.41	310,026.85
59	1,075.00	6,900.00	600.00	5,400.00	627,842.70	268,078.03	327,827.92
60	1,075.00	6,900.00	600.00	5,400.00	650,438.76	279,401.15	346,341.04
61	700.00	2,100.00	600.00	5,700.00	668,799.73	291,177.20	365,894.68
62	700.00	2,100.00	600.00	5,700.00	687,619.73	303,424.29	386,230.47
63	700.00	2,100.00	600.00	5,700.00	706,910.22	316,161.26	407,379.69
64	700.00	2,100.00	600.00	5,700.00	726,682.98	329,407.71	429,374.88
65	700.00	2,100.00	600.00	5,700.00	746,950.05	343,184.02	452,249.87
66	575.00	600.00	600.00	5,700.00	766,223.80	357,511.38	476,039.87
67	575.00	600.00	600.00	5,700.00	785,979.40	372,411.83	500,781.46
68	575.00	600.00	600.00	5,700.00	806,228.88	387,908.31	526,512.72
69	575.00	600.00	600.00	5,700.00	826,984.60	404,024.64	553,273.23
70	575.00	600.00	600.00	5,700.00	848,259.22	420,785.62	581,104.16

Conclusions
The individual is likely to have little or no CPF OA balances left when he hits the age of 60. This is due to the housing loans he had to pay over the 30 years, with some cash outlay.

At the age of 60, his SA account has only reached $279k, which some people might feel is sufficient to hit the CPF minimum sum. However, this is not true. CPF minimum sum will increase yearly to account for inflation.

In one of my earlier posts [http://madstranger.blogspot.com/2012/01/what-if-cpf-minimum-sum-continues-to.html], I estimated that CPF minimum sum will hit 349k 30 years from now. This individual will still be short of 70k.

For those who are more well paid, it is still possible to hit the minimum sum with SA alone as they will have bonuses yearly. However, the average Singaporeans are likely to suffer from this 20-30 years from now.

Other important notes:
The above projection is also meant to show how the CPF contribution rates
a) decreases with age and
b) how the allocation towards OA, SA and MA changes

When purchasing your housing, do bear in mind these changes so as not to be caught off guard when there is an increase in your cash outlay to your housing loans.