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Whenever I blog about the CPF, I must be prepared for some debate and it happened again last night.
I always welcome debates as long as they are civil and constructive.
Please don't be rude.
Don't tell people to get a rope and hang themselves, for example.
I am so sorry to have caused the reader so much angst. :(
Since following my blog upsets him, I will do him a big favor by blocking him.
I don't usually block or ban readers from my FB page.
If I did it to you, you must have been pretty bad.
Don't follow my blog.
Don't worry. Be happy. :D
I am glad to share an example of a civil debate with another reader here.
Reader says...
Our CPF removes choice.
One may suddenly need money for some valid reason eg temporary retrenchment but one will not be allowed to take out even a small sum to meet daily needs.
Malaysia's EPF and Singapore's CPF have some good aspects.
EPF is like a bank which allows withdrawal of money when needed but the same bank tells CPF subscriber that no money can be released whatever the need however urgent.
Would you put your hard earned cash in such a bank for it to dole out paltry sums now and then saying its looking after your money for old age?
While CPF is good , it needs a little flexibility in disbursement of funds which after all belong to the subscriber.
What use are better returns when one cannot enjoy them at will and perhaps will only be given to your nominee on your demise?
AK says...
In reply to: "Would you put your hard earned cash in such a bank for it to dole out paltry sums now and then saying its looking after your money for old age?"
Such a comparison is misleading.
I think we have to be clear what the CPF is.
CPF isn't a bank although we can use it like one when we turn 55 if we have the FRS in the CPF-RA then.
For people who do not even have the FRS (or BRS) in their CPF accounts and wish to draw upon their CPF savings whenever they have a financial bottleneck, they need to do serious financial planning pronto.
Also, CPF LIFE is not a bank that doles out a paltry sum.
The comparison is again misleading.
Once your savings in a bank runs out, you are out but not with the CPF LIFE which pays you for life.
In reply to: "What use are better returns when one cannot enjoy them at will and perhaps will only be given to your nominee on your demise?"
It is precisely this type of thinking that leads to "Return Our CPF" rallies in Hong Lim Park.
Many people who supported the rallies had very little savings and yet they wanted to utilise their CPF (retirement) savings "to send children to study overseas", "to go on a holiday", "to go on a pilgrimage" etc.
The higher interest rates in our CPF-RA is to help us better fund our retirement and not to be depleted at a whim which is what many would do if given a choice.
See the latest comments in the following blogs:
1. Retirement funding assurance for average investors.
2. When to get a private annuity.
3. Food inflation in Singapore and Malaysia.
4. We do better at managing our savings than CPF does.
Related posts:
1. Crazy Rich Asians or Pragmatic Rich Asians?
2. Use CPF as a savings account.
Bloggy Award
37 comments:
Wong Yixiang says...
https://www.straitstimes.com/singapore/1m-gone-in-one-year-widow-of-killed-changi-airport-worker-is-now-broke
Anyone still remember this news? Granted that not everyone is like this but the government is just being prudent.
"The interest rate on the SMRA aim to be equivalent to what a 30-year SGS would earn, as 30 years is the typical duration for which SMRA monies are held. As the 30-year SGS did not exist when the Government made changes to the interest rate structure in 2007, SMRA rates were pegged to the yield of 10-year SGS plus 1%. The 1% spread is in fact higher than that which international bond markets have paid on 30-year bonds. The current yield on the 30-year SGS, which is not widely traded, is around 3%. This is well below the minimum interest rates of 4-5% that are currently paid on SMRA accounts."
- Ministry of Finance (MOF)
I just hope that the 4% floor rate can be extended for many more years, and not going back to the yield of 10-year SGS plus 1%, or the yield of 30-year SGS. Otherwise, I wanna join them at Hong Lim Park liao. :P
Siew Mun Kwan says...
Different people have different world views/ perceptions.
No matter how you persuade/ convince/ educate they will not accept.
Tell them to avoid falling into hole in front of the road ahead, they will still go straight ahead and fall into the hole.
For 100 people u educated, there are bound to be a few will not accept.
AK u are doing a good work.
I was among the many you have helped to turn around!
Hi!
I enjoy your blog posts and the content has really made me give much thought to financial planning and retirement thinking. Seeing how the CPF can be made use of to secure retirement was really eye-opening.
However, there's always a nagging feeling at the back of my mind since I'm still young and have at least another 25 years before being able to see that money.
I always wonder that the success of using CPF also depends on the success of SG + its currency. Not many countries can stay at the level Singapore is at and sooner or later an event may cause the value of SGD to be eroded. It's a scary thought..
I also wonder how the CPF system can be improved (would love to know your thoughts on this) e.g. from 55 to 65, I know of people who have their entire balance transferred to the RA which can't be touched (over $100k). They could have had a bad turn of luck at that age, and some are left homeless. In that situation, buying a flat is also difficult and it can be the start of a downward spiral.
Thank you for your time!
I do not understand why many negative people tend to resort to rude or cursing remarks at personal level. They lose credibility in everything they had said. Worst of it, they may even pull you down to their same level and then beat you to it .... omg.
Hi jcsemaj1,
Being cautious is a good thing.
As for fear of the unknown, I will say that we should not let that be the cause of inaction.
If I had not taken action more than 20 years ago and stayed on the path over the years, I would not be able to show off my CPF statement today. ;)
Carefully consider our circumstances and objectives before deciding how the CPF should be part of the picture. Good luck. :)
Hi Cory,
Some people are more emotional than thoughtful.
As investors, this is a terrible weakness.
A good reminder to myself. :)
See:
Should a young person contribute to his CPF or SRS?
See:
Should he do a VC or a MS top up?
It's especially through blogs like yours, that I became more sure of what to do with my CPF monies. As a salaried person, may as well use the system to the fullest for my benefit.
Hi Simon,
Compound interest needs time to work.
He who understands it, earns it.
He who doesn't, pays it.
Instead of wasting precious time complaining about the system, we should be using time to make the system work for us. ;)
See:
Two friends and their CPF savings.
Peter Somtam says...
I have read the article on the author from " Return our CPF" as from the other camp who will all the way to disscerdit on the goodness of CPF. If the government does not make a must for CPF life, in later life many of us will have issue with retirement. This is the basic and core structure of survival for each person.
My 2 cent worth after goes to many recession and affect by the CLOB and other issue. Now wiser and more conservative as I approached toward senior life. I call it rewind and not retirement. Ha ha.
The Employees Provident Fund (EPF) is concerned with the spending habits of those who run out of savings too soon after retiring.
Kuala Lumpur EPF branch retirement advisory service (RAS) officer Nornisah Mohd Yusof said many subscribers ran out of their EPF savings within three or five years after retiring although the life span for Malaysians had increased to 75 years.
"More worrying are cases where retirees withdrew 70% of their savings and spent the money in less than 30 days," she told Bernama.
Source:
https://www.thestar.com.my/news/nation/2016/12/28/epf-some-retirees-spending-all-their-withdrawals-in-30-days/
Hi
AK71 is one of those blogs which i frequently visit, I agree with him in most of the things; but CPF is one of the topics which i don't agree with him in a few areas.
Enough praises sung on CPF, there are good and bad things about CPF, so i will not talk about the benefits of CPF here; i just talk about the ONE BIG bad thing (which is one of the core major issues everyone is talking about) about CPF (i.e Everyone, financial status regardless; is not allowed to withdraw all $CPF at 55).
1. The bottom line is this:
CPF is my money. Full stop. If you agree with this, we can carry on, otherwise it is pointless.
2. Where my money is concerned, as any human being, i am a selfish individual. Of course if i decide to do charity, that is called volunteering, at one's own will, NO OBLIGATION.
3. As such, please let me have full control of what i want to do with all the CPF money, upon reaching 55 years old. Full Stop. (And btw, please note that i am not calling to end CPF).
But instead of looking into how to tackle the core issue of this; what happens is that the many contrarian would instead divert you to many financial ghost stories, as well as turning the CPF tree to another side in order let you see more the brighter side of it instead.
4. Someone, who is almost like AK71 himself, is managing his/her hard earned money well during his/her younger days; At 55 years old today, he/she is sitting on no less than 10K average monthly investment returns. He/She is planning ahead for every stage of his/her life. (Now please, don't go into topics such as financial planning may go wrong and that how CPF can become a safety net etc), as you know, what can guarantee Singapore survival?
Can't he/she choose what he/she want do with the CPF money now? There is possibility he/she will think like AK71, leave the money in CPF and CPF life; but could you please let him/her has flexibility to do what
he/she ultimately want to do with the money? The goverment can set rules, but the core issue is again, please let individual who has met the financial criteria, choose what he/she want to do.
Why a blanket rules regardless of the financial status of individual at their retirement age? We are grateful for a caring government in helping people to retire financially sound, but you cannot apply the same rules to everyone here.
So here, back to point 1 and 2 above, unless you bring in topics such as collective social responsibilities into discussion (which will bring out other issues as well); I don't know what other reasons the government has; to apply the same rule onto everyone; i.e you can't withdraw all CPF money upon reaching 55.
AK71 can choose to retain all his money in CPF upon reaching 55, but not every other "AK71" would want to do exactly the AK71 here is doing with his $CPF upon reaching 55.
Hi
AK71 is one of those blogs which i frequently visit, I agree with him in most of the things; but CPF is one of the topics which i don't agree with him in a few areas.
Enough praises sung on CPF, there are good and bad things about CPF, so i will not talk about the benefits of CPF here; i just talk about the ONE BIG bad thing (which is one of the core major issues everyone is talking about) about CPF (i.e Everyone, financial status regardless; is not allowed to withdraw all $CPF at 55).
1. The bottom line is this:
CPF is my money. Full stop. If you agree with this, we can carry on, otherwise it is pointless.
2. Where my money is concerned, as any human being, i am a selfish individual. Of course if i decide to do charity, that is called volunteering, at one's own will, NO OBLIGATION.
3. As such, please let me have full control of what i want to do with all the CPF money, upon reaching 55 years old. Full Stop. (And btw, please note that i am not calling to end CPF).
But instead of looking into how to tackle the core issue of this; what happens is that the many contrarian would instead divert you to many financial ghost stories, as well as turning the CPF tree to another side in order let you see more the brighter side of it instead.
4. Someone, who is almost like AK71 himself, is managing his/her hard earned money well during his/her younger days; At 55 years old today, he/she is sitting on no less than 10K average monthly investment returns. He/She is planning ahead for every stage of his/her life. (Now please, don't go into topics such as financial planning may go wrong and that how CPF can become a safety net etc), as you know, what can guarantee Singapore survival?
Can't he/she choose what he/she want do with the CPF money now? There is possibility he/she will think like AK71, leave the money in CPF and CPF life; but could you please let him/her has flexibility to do what
he/she ultimately want to do with the money? The goverment can set rules, but the core issue is again, please let individual who has met the financial criteria, choose what he/she want to do.
Why a blanket rules regardless of the financial status of individual at their retirement age? We are grateful for a caring government in helping people to retire financially sound, but you cannot apply the same rules to everyone here.
So here, back to point 1 and 2 above, unless you bring in topics such as collective social responsibilities into discussion (which will bring out other issues as well); I don't know what other reasons the government has; to apply the same rule onto everyone; i.e you can't withdraw all CPF money upon reaching 55.
AK71 can choose to retain all his money in CPF upon reaching 55, but not every other "AK71" would want to do exactly the AK71 here is doing with his $CPF upon reaching 55.
I am most grateful that I have listened to AK these past few years, and topped up SA till now I cannot top up anymore. Give me a peace of mind.
I am grateful that no one else has told me to find a rope to hang myself. :p
Peter Somtam says...
AK, you had help many people to open their mind and understand the goodness of CPF.
Thank and keep it up.
Changes to the CPF are reasonable and necessary.
Hi AK,
To each of their own. Different people have their own way of leading their lives. I believe that your approach is one of the practical way of living a life to the fullest. I can understand the pain of being held at ransom by the employer and others when one does not have the FU money to back himself/herself. Having the peace of mind is the best way in my prespective. Such mindset may not be agreed by others. Once again, to each of their own.
Ben
Prasad Rnv says...
Assi AK, if this is what people do when they withdraw CPF ,( ie, put it in a bank account for paltry interest) I agree with your sentiments as it makes more money sense
https://www.straitstimes.com/business/invest/should-you-withdraw-cpf-cash-at-age-55
People who are not financially savvy best keep the money in CPF and let it earn more interest. 🤣👏
Julian CK says...
Funny logic!
If I really need to have a choice of something then I’ll like to have a choice of when to die, how to die and where to die...
but committing suicide in Singapore is a crime...
so people like him should be very unhappy as death itself is also not a choice...
ppl like him surely has lots of things to be unhappy about...
Gabriel Lionel Morais says...
It’s a free country ... given choices means unhappy ??
What shit logic is that ?
As Df says...
Read the comment?
He's saying there are a *lot* more constraints in the local context to be unhappy about.
A nanny state is hardly the best choice of regimes for those to whom freedom of choice is paramount.
Gabriel Lionel Morais says...
As Df show your face lah ... why so shy ?
Nanny state make your balls shrink is it ?
AK says...
Please be civil. Don't be rude.
Gabriel Lionel Morais says...
Assi AK I am just replying to comments ...
AK says...
Your reply is not civil.
Gabriel Lionel Morais says...
Assi AK that’s your take
AK says...
It is my FB wall.
Follow my house rules.
Gabriel Lionel Morais says...
Assi AK I gave you a message ... reply if you are a man of principle
AK says...
I don't know what are IBs and I don't look at people's profiles.
As Df says...
Not interested in entertaining pathetic losers resorting to cocks and cunts *yawn*
AK says...
There is no need to hide behind PMs
Gabriel Lionel Morais asked if AK "employ IBs to support your recommendations ?"
AK says...
I dunno what are IBs and I don't make recommendations.
Gabriel said:
We stop here . You lost my respect .
AK said...
Since u no longer respect me, feel free to stop following me. I will do you a favor.
Gabriel said...
It’s a free country.
AK said...
And I am free to do you a favor.
Blocked!
Lim Toh Beet says...
Hi AK, I’ve been eavesdropping.... so sorry you’ve to bear the brunt of those unhappy with CPF.
I remember reading few years back a fb sharing by a father who needed money urgently for his daughter’s medical treatment. He wrote in to CPF and received a prompt reply from the board. Verification was made and money was released immediately so that his daughter could go for her treatment quickly.
I tried searching for the post but couldn’t find it.
This example serves to show that CPF is not as rigid as some made it out to be. Maybe it’s the general public’s ignorance....
Seems that CPF does look at each case to determine how genuine the money is needed. All one needs to do is write in with supporting documents.
Prasad Rnv says...
Lovely to see my comment on your blog.
I feel like I struck lottery.
We may disagree on CPF matters but we do so politely with no acrimony (and no money from CPF too). :)
Robust debate is the way to go.
Keep up the good work, AK.
Ana Liang says...
Assi AK how ridiculous is that ?
He doesn’t have to follow your blog.
What’s wrong with these people ?
Kelvin Yip says...
Assi AK pity a father of 3 children talking like that.
Wonder how their upbringing will be like.
Upset with ASSI?
Unfollow. I don't mind.
Be rude and I will block you.
rude
adjective
offensively impolite or bad-mannered.
Harvey Huang says...
Chill AK, don't angry with GLM, stay GLAM
Tong Xiang Yap says...
Damn bo liao these ppl .... block them block them. It's like cai peng stall, not nice, don't buy lor.. kpkb for what. Life is short.
Kenichi Xi says...
Aiyo!
Silly person.
Good Block.
Just block.
Dun think.
trust me.
Daphne Yuen says...
Totally agree...dont waste time on such people
Wong Yixiang says...
“PAP IB” means “PAP Internet Brigade”. People who dislike PAP feel that there are people out there who are paid to say good things about PAP, hence calling them IB.
Just FYI.
AK says...
Ah, thanks for enlightening me.
I am non-partisan and unfamiliar with such lingo. :p
Sim On says...
I am AK IB. Hahaha 😚 he don't pay me but show me there are ppl willingly share their good stuff
Peter Yu says...
There will be forever haters in this internet. We can call them hater ib!! Follow what you like on internet. Things you dont like dont listen. Listen to what you dont like would only make you angry. Why get angry for things that you dont like?
Nigel Lim says...
He agrees that CPF life is the best but he is disappointed that he is given nothing but the best. See the contradiction here?
Reader says...
You have many viewers who are Singapore PR/ Malaysians (actually I’m one of them).
Just curious.. what financial advice would you give to people like us? Do you recommend us putting our money into CPF or EPF or both (like 50/50)?
Thank you.
AK says...
I am not in your shoes.
So, impossible to talk about Malaysian pension scheme. 😛
You might want to read this blog and readers' opinions in the comments section.
Reader says...
Thanks for your reply.
I remember reading your blog where you mentioned that despite lower interest rate in CPF (4% in CPF vs 6% in EPF), Sing dollar is a stronger currency, which I think is a valid point as well. 👍
AK says...
The RM has gone down by 50% against the S$ in the last 20 years. -.-
It also means that the S$ has doubled in value against the RM in the last 20 years! 😮
Jackson Yang says...
I had thought about this too! But at the end, relative stable sgd and relative low inflation in sg (compared with msia) made me to put in cpf than epf.
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