My own experience - I keep my CPF OA balance low as I am aggressively paying off my HDB mortgage loan. Anyway, it's money I can see but I cannot touch, so this irritates me somewhat! I'd rather grow the money I can see + touch which makes up my personal savings and investments. For CPF OA Funds injected into investments, even dividends are "trapped" back into CPA OA again. That's the reason why I don't think much of CPF OA investments. The 3.5% on the first $20,000 seems attractive enough from this standpoint (frozen cash).
(05-09-2012, 11:22 AM)yeokiwi Wrote: [ -> ] (05-09-2012, 10:28 AM)sgd Wrote: [ -> ]Imagine the following analogy:-
Your father ask you to save and invest 36 per cent of your income through him. He gets 12 per cent and gives you 2.5 per cent. The excess is kept by him, and if you have an emergency and need to use it, both your father and grandfather have to approve.
Ｔｈｅ ＣＰＦ member ｃａｎ ａｌｗａｙｓ ｉｎｖｅｓｔ ａｌｌ ｏｆ his ＯＡ ａｎｄ ＳＡ ｆｕｌｌｙ ｉｎ ｐｒｏｐｅｒｔｉｅｓ， ｓｔｏｃｋｓ， ＥＴＦ ａｎｄ ｕｎｉｔ ｔｒｕｓｔｓ．Ｔｈｅｒｅ ｉｓ ｎｏ ｎｅｅｄ ｔｏ ＂ｂｅｎｅｆｉｔ＂ｔｈｅ ｓｔａｔｅ ｉｎｖｅｓｔｍｅｎｔ ｖｅｈｉｃｌｅｓ ｉｆ ｔｈｅ member resents it and thinks lowly of the 2.5% return.
In that case, the member can get a higher return by his own capability.
Is not free to do anything you like as you so describe which btw you forget to mention that one has to repay back
everything in full with interest incurred back to cpf, and this will affect the final balance later to compare against the "minimum sum (TBD)" which the outcome will determine if you meet the requirement for withdraw or not.
(05-09-2012, 12:02 PM)sgd Wrote: [ -> ] (05-09-2012, 11:22 AM)yeokiwi Wrote: [ -> ] (05-09-2012, 10:28 AM)sgd Wrote: [ -> ]Imagine the following analogy:-
Your father ask you to save and invest 36 per cent of your income through him. He gets 12 per cent and gives you 2.5 per cent. The excess is kept by him, and if you have an emergency and need to use it, both your father and grandfather have to approve.
Ｔｈｅ ＣＰＦ member ｃａｎ ａｌｗａｙｓ ｉｎｖｅｓｔ ａｌｌ ｏｆ his ＯＡ ａｎｄ ＳＡ ｆｕｌｌｙ ｉｎ ｐｒｏｐｅｒｔｉｅｓ， ｓｔｏｃｋｓ， ＥＴＦ ａｎｄ ｕｎｉｔ ｔｒｕｓｔｓ．Ｔｈｅｒｅ ｉｓ ｎｏ ｎｅｅｄ ｔｏ ＂ｂｅｎｅｆｉｔ＂ｔｈｅ ｓｔａｔｅ ｉｎｖｅｓｔｍｅｎｔ ｖｅｈｉｃｌｅｓ ｉｆ ｔｈｅ member resents it and thinks lowly of the 2.5% return.
In that case, the member can get a higher return by his own capability.
Is not free to do anything you like as you so describe which btw you forget to mention that one has to repay back everything in full with interest incurred back to cpf, and this will affect the final balance later to compare against the "minimum sum (TBD)" which the outcome will determine if you meet the requirement for withdraw or not.
The goal post has shifted. I am referring to the original argument that "the state investment vehicles get 12% and gives 2.5%" and the state benefits from CPF deposit. I am offering a solution to investors that resent letting the state investment vehicles getting 12% return.
Anyway, for those investors who deny the state the easy cash and gotten 12% annually, they can withdraw everything except the minimum sum at 55.
if CPF board directly invested into foreign/local companies and lost billions, people would criticize the government to lose their pension money. Now that, CPF board offers 2.5% risk almost free return, people criticize that the government does not generate enough return for them.
Is there a way for the government to do better? There are always people unsatisfied with whatever decision the government makes.
Is a blunt tool on a minimum sum that most people should not worry about as it provides basic coverage. 2.5% is good considering they can also change and give you none.
(05-09-2012, 11:37 AM)Jared Seah Wrote: [ -> ]In my fantasy as the govt of the day (or just assume I'm on medically-enhanced state of mind), I would have no problem letting people withdraw 100% of their CPF money when they reach 55.
PROVIDED they sign a document they won't come back to the state for bail-outs if they have spent all their CPF money on wine, women, and song; or if they have lost it all in some hair-brained schemes, or in a late life "entrepreneurship" adrenalin rush!
Be a man! Live by the sword; die by the sword.
Cannot be like Greece (spend first worry later) claiming to be a citizen and "entitled" to be taken care of by Germany (other Singapore citizens who worked hard, invest hard, think hard).
It's interesting reading the on-line Greek press that some Greeks are blaming Germany for the situation they are in!? Like that also can?
I agree with forum members here that CPF ideally should be a small part of our net-worth at 55 or 65.
Something is not quite right if we keep eyeing our own CPF all the time.
It simply means if a person is not savvy with money or wealth creation up till 55, what makes you think that person will "suddenly" had an epiphany and miraculously know how to manage a relatively big lump sum of money at 55?
Fully agree!
This scheme (or "scam" to those who opposes it) must have been designed for the vast majority who'd not done a good enough job in their financial management during their working life. I'm referring to those whose CPF monies form a substantial % of their Net Worth. The chances of them being able to suddenly manage this 'huge' (by their standard) sum of monies is also very slim.
For my own selfish reasons, I'd strongly recommend them to let the state manage this "huge" sum of CPF monies for them, so that they can have a regular payout for basic subsistence... I don't want to be burdened (or my kids to be burdened) with higher taxes, if the state have to provide social security to many of these people if they were to mismanage their CPF monies and be left with nothing... Sorry...I know you have the utmost confidence in yourself, after planning for 30-50 years of your working life to manage your CPF monies for great returns... But I don't share the same confidence if you don't already have a great track record managing your own funds...
In fact, the minority of us (majority in this forum) ought to be the most upset about this scheme. But then again, many of us (I assume) have been able to live with this 'frustration' and focus on managing our own funds... So much so that, by the time we retire, this CPF monies is not that significant a part of our Net Worth. In fact, I won't be surprised if many here would have hit and exceeded certain financial goals and have more than enough for their retirement... Ya, can always leave the CPF monies for their next generation or donate to charity...
(05-09-2012, 01:49 PM)corydorus Wrote: [ -> ]Is a blunt tool on a minimum sum that most people should not worry about as it provides basic coverage. 2.5% is good considering they can also change and give you none.
Give you none? i am sorry i think even CHINA & RUSSIA are changing with the times of the day.
And not to mention our next door neighbour's "EPF" (which is quite equivalent to our CPF Scheme), is always paying more than what our GOV. is paying us. Anyone like to elaborate why? And i think their cost of living is much lower than us too. No wonder many Singapore PRs of Malaysia origin are waiting to balek Kompong especially those who have relatives still living in Malaysia and keeping in touch.
CPF!!!
My favourite topic.
Have you ever tried to invest your CPF money in stocks? The whole suite of CPF rules are stacked against people who make money. All the rules are there to protect losers against themselves. Why can you and you and you, yes YOU! invest your money properly? And not cause problems for people like me?!
(05-09-2012, 08:48 AM)yeokiwi Wrote: [ -> ]CPF is basically penalising smart investors and high income earners to force the rest of the non high earning CPF members to save a sum of money for their old age.
If an escape clause is provided only for the rich, it will give rise to dissent and unhappiness. The typical CPF member will be pissed when they see the rich ones can withdraw their CPF and spend while they have to lock up their money.
If CPF allows everyone this option, I am quite sure very few will leave their money in CPF.
And going by the lousy investment records of CPF members, the society will most likely have to provide full subsidy for many who have ran out their money before they bite the dust.
Precisely! But CPF should tweak the rules to allow successful investors some leeway. E.g. If one can say make $100,000 profit on their stocks/gold/unit trust investments, one should be able to invest his funds freely like the SRS? Alternatively, as long as a member has the minimum sum in the SA, he should be free to invest his OA like the SRS? That will be NIRVANA for me....
(05-09-2012, 02:51 PM)Temperament Wrote: [ -> ] (05-09-2012, 01:49 PM)corydorus Wrote: [ -> ]Is a blunt tool on a minimum sum that most people should not worry about as it provides basic coverage. 2.5% is good considering they can also change and give you none.
Give you none? i am sorry i think even CHINA & RUSSIA are changing with the times of the day.
And not to mention our next door neighbour's "EPF" (which is quite equivalent to our CPF Scheme), is always paying more than what our GOV. is paying us. Anyone like to elaborate why? And i think their cost of living is much lower than us too. No wonder many Singapore PRs of Malaysia origin are waiting to balek Kompong especially those who have relatives still living in Malaysia and keeping in touch.
Firstly do we equate cost of living to standard of living ? When Oil price increase, is world price less subsidy. Inflation hits everyone. Else why would you see Arab uprising in so called low cost countries but not in singapore if we are that bad.
Secondly, i am aware certain countries do give higher returns but i suspect nothing is free. It can comes in higher inflation, taxes, weaker exchange rates etc
(05-09-2012, 08:38 AM)Temperament Wrote: [ -> ]My point is you don't have a choice even if you are a high wage earner with more than adequate retirement fund at the end when you stop working.
It is like an insurance company forcing you to buy an annuity, regardless what you think.
Anyway, if every worker is forced to buy an annuity, is CPF LIFE necessary?
Alas, annuity is not "popular" in Sinkapore due to ???
Fortunately, i had a choice because i was more than 55 years old when CPF LIFE was introduced.
Sorry mate, if you don't have a choice.
Then you shouldn't tried to do scare tactics like saying the annuity amount can be stopped. If you have a political agenda, so be it. But you shouldn't hide it behind trolls.