The email address in "Contact AK: Ads and more" above will vanish from November 2018. No new email address will be provided. Contact me using Facebook. - AK

FAKE ASSI AK71 IN HWZ.

Financial security in Singapore plain and simple.

Singapore retrenchment: Will Malaysia share the same fate? Reader: I found your blog over the past week, and I have been looking ...

Past blog posts now load week by week. The old style created a problem for some as the system would load 50 blog posts each time. Hope the new style is better. Search archives in box below.

Archives

"E-book" by AK

Second "e-book".

Another free "e-book".

4th free "e-book".

Pageviews since Dec'09

FOLLOW AK ON FACEBOOK.

Recent Comments

ASSI's Guest bloggers

Unfair FRS and ERS' CPF LIFE payouts compared to BRS'?

Wednesday, August 29, 2018

Reader says...
Singapore government seems to be steering the country to be more inclusive.

What does that mean?


It means if you have a lot of money in CPF, it will be used to tilt the balance or contribution to the needy individuals who do not have enough in their CPF.


As in FRS CPF Life is NOT exactly twice payout from BRS CPF Life.







AK says...
Of course. People who have greater ability to help themselves should do so and not lean too much on the government for assistance.

Reader says...
Should do so? Based on?

Retirement planning for someone who painstakingly TOP up with CASH should NOT be used as handouts to others.


This should be done in the domain of income tax... or those with CPF way above FRS or ERS...


FRS and ERS are for the sandwich class.







AK says...
The top ups you are making to your CPF account are not being used as handouts to help others.

It remains your own money as any excess above the FRS, you are allowed to withdraw at age 55.


Your CPF money is not being given away if you have the FRS in your CPF account compared to members who only have the BRS.


You CPF money is simply paid a lower average interest rate in comparison.


Reader says...
It is NOT equitable.

Your statement of “Your CPF money is simply paid a lower average interest rate in comparison” doesn’t bode well for the middle income who works hard and TOP up cash periodically to secure a comfortable retirement life.

It should NOT at any away tweaked so as to achieve FAIRNESS.

This can be achieved via OTHER means/Policies.







What does AK have to say?

When we reach 55 years of age, we will enjoy 6% interest on the first $30K, 5% interest on the next $30K and 4% interest for the balance in our CPF-RA account.

So, it is true that members who have the BRS will get a higher interest rate on average compared to members who have the FRS or ERS.

It also means that although the FRS and ERS are 2x and 3x more compared to the BRS, the monthly payouts from CPF Life will not be 2x and 3x more than the BRS'.








Although some with the FRS or ERS might think of it as being unfair to them, remember that the extra interest is really a bonus given on top of the floor interest rate of 4%.

Also, although the government might be seen as giving more aid to members with less in their CPF savings, in actual fact, all members are being given the same extra interest on the first $60K in their CPF-RA.

I don't think anyone should be complaining.








As Singaporeans enjoy longer life expectancy today, CPF LIFE helps guard us against running out of money during a long retirement.

Find out how CPF LIFE ensures monthly payouts for life in this video.





Related posts:
1. CPF LIFE Payout Estimator.
2. Remove the CPF Annual Limit and...

9 comments:

AK71 said...

Reader says...
Whiners will forever be whiners, so there is really no point in trying to explain to them. Seen that many times at work and in forums lol.

AK says...
AK is mental.
He just had to try.
Silly AK! Silly AK! ๐Ÿ˜ž

AK71 said...

PK Jan says...
Agree with AK

Jack James says...
Whatever in place right now is good , don’t change it .
Don’t ever let WP to change it too ! ๐Ÿ˜…๐Ÿ˜‚๐Ÿคฃ

AK71 said...

Hengqi Toh says...
Humbling reply from ak.
Focusing on the main agenda.
Its discussion like such that makes us have further insights and awareness of the cpf

AK71 said...

The CPF system is not perfect, definitely.

However, I do not see how a system that is designed to help those who help themselves is unfair.

There are countries with systems that reward the unemployed with monthly benefits while taxing those who are gainfully employed heavily.

I think that is unfair. ;)

AK71 said...

From the reader who started this conversation:

Government measures which “Forces” citizens on how and what their CPF can and will be used without options for the people to choose is one of the reason why quite a lot of people rejected Careshield life.

I am of the opinion that to be equitable, contributions should be of percentage of income regardless it is passive or active, instead of blanketed and fix amount.

This is why the GAP of rich and poor grows. And will keep growing.

I will not be surprise if government continues to use citizens CPF which serves as retirement and in the midst implementing bad policies (ie. PIC policy).


AK says...
I am confused.

Nick said...

"Reader says:

Government measures which “Forces” citizens on how and what their CPF can and will be used without options for the people to choose is one of the reason why quite a lot of people rejected Careshield life.

I am of the opinion that to be equitable, contributions should be of percentage of income regardless it is passive or active, instead of blanketed and fix amount.

This is why the GAP of rich and poor grows. And will keep growing.

I will not be surprise if government continues to use citizens CPF which serves as retirement and in the midst implementing bad policies (ie. PIC policy).

AK says...
I am confused."

Aiyoh! Another misinformed or misguided soul...I would consider the above to be fake news!

AK71 said...

Hi Nick,

I know how Donald Trump feels now.

ROFL.

;p

AK71 said...

Mui S Goh says...
I will not want to be penalized via higher personal income taxes just because I am gainfully employed just to subsidize the lazy and unemployed citizens like in Australia.

AK71 said...

Loke Oilin says...
U mean Australia unemployment has monthly payout huh .Australia is resource rich can afford.


Mui S Goh says...
that is because Australia levy high personal income taxes on its people that many rather not work and just take unemployment benefits. Nothing to do with rich resources.

Monthly Popular Posts

 
 
Bloggy Award