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Has AK changed his tune about the CPF?
Pause.
Pause.
Pause.
What say you?
Till now, I still meet people who say that the CPF is a PONZI scheme and would look at me with utmost suspicion when I talk to them about maxing out our CPF benefits as Singaporeans.
Maxing out?
Yes, there is a maximum we can contribute to our CPF account each year.
The annual limit was $31,450.00 in 2015 and because AK is weak in mathematics, he over-contributed (again).
Ever heard of a PONZI scheme that rejects monetary contributions?
Related post:
The CPF is a national PONZI scheme.
Bloggy Award
17 comments:
AK, i think whole singapore you are the only one who received this kind of refund statement haha.
Hi AK, would like to clarify something. I thought the CPF Annual Limit consists of mandatory contributions (MC) from both employer and employee and VC? What you have in your photo is just employer contributions and VC. Unless they mean the employer helps to contribute both of the employer and employee portions. Sorry haven't got such a letter before.
Also, i would like to do a VC this year. Is there a best time to do it? If let's say i do a VC in Feb of 20k, so for 2016 CPF annual limit of $37,740, there's $17,740 left for MC. Does it mean when it reaches the CPF annual limit, the employer can't put in anymore money or is the priority given to MC such that any extra at the end of the year, they will take from the VC?
With effect from 2016, it will be $37,740
Hi coconut,
I am sure there are others. LOL. ;)
Hi sheep,
I think the employer contribution includes my mandatory contribution submitted by my employer. ;)
I usually like to contribute voluntarily early in the year so that I get more interest income. So, I make an estimate of how much my mandatory contribution for the year might be and send in a cheque to max out the limit. The drawback is that there is always excess contribution. It doesn't bother me since CPFB will refund any excess contribution in the new year.
Hi Jimmy,
Thanks for the update. :)
You just showed the world your annual income. Haha.
Hi AK,
Is the interest start from the date you contribute including the excess you sent?
Hi bQ,
Did I? Haha.
I am moving into full retirement. Will have to up the VC component this year.
Hi sgx fish,
I would think that is the case. :)
Reader:
With the recent news on SIA profit dropping and overall bad economy, some of them are encouraging those with a lot of CPF in their RA to withdraw the money and don't leave so much in CPF in case the CPF collapse and their funds will be lost..
AK:
Alamak. :o
Ignorance is not bliss.
Hi AK,
Your reader probably mixed up SIA with noble group. :P
Hi Kevin,
Noble. Maybe, the Chinese people should worry. ;p
Hi Unknown,
Although I have much more than the FRS in my CPF account, I continue to make voluntary contributions and I am probably going to keep doing this till I am 65 or maybe even older. This is because I believe it is the best investment grade bond I can get for my money and I believe in the stabilizing effect of having such bonds in my investment portfolio. :)
AK Tan says...
(Instead of ASSI becomes ASCPFI) How about ASCPFPonzi?
AK says...
As you wish :p
Reader says...
Hi AK, would like to ask if the CPF annual limit 37,740 is for statement month or payment date? i would like to do a voluntary contribution but need to do my homework if i will hit the cap or not since im expecting to get bonus in dec which the cpf will be paid in Jan 2019
AK says...
It is annual limit.
So, if you do VC now but the MC hits the limit later this year, CPFB will refund to you.
A comment in my YouTube channel from @ljh2027:
I like that you used the letter as proof that this is not a Ponzi scheme. Quite a simple refutation that works all the same.
Some additional points to share why CPF is not a Ponzi scheme:
1. It fails when you consider our ageing population. We would be seeing a lot of warnings earlier with our dwindling younger workforce, but so far, it works fine.
2. Retirement payouts are determined by how much you put in. Our government has always been firm on this and they have been using other ways to issue that kind of handout.
3. How it grows interest is based on what you have shared. GIC takes on all the investment risks so that we can enjoy risk free 4%. A lot of messaging has been done on this lately and I am very appreicative of it. But there is organic growth as shared. New contributions are even capped too as you shared.
And so long as CPF continues its current system, it will never be a Ponzi scheme. CPF may not be a perfect scheme, but it is certainly not a fraud.
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