Unhappy with CPF and angry with AK. (Alamak! Why you so like that?)

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.

Crazy Rich Asians or Pragmatic Rich Asians?

I know my blog has some reach beyond the shores of our tiny island nation of Singapore.

Remember how I received a not too glamorous award from a forum in China recently?

See:
Once upon a time in China, Weibo says 铁公鸡AK 还好没结婚!






I would like to share a conversation I had with a reader from Hong Kong some time ago:

Reader says...
Hope you don't mind a guy from H.K. dropping a line.

Indeed I used to stay in Singapore for a few years back 20 years ago.

As far as I know Singaporeans at that time liked luxury items, and home as well of course.

It is kind of having face, isn't it?

Glad to find AK's blog which share a different view from the majority (Forgive me, if this sounds offensive, on my poor English).

Personally I do agree with your mentality but I think You would appear a bit odd in the main stream?






AK says...
I think having face is more important in Asian societies compared to western societies.

I could be wrong but this is from my own observation and Hong Kong is probably the same as Singapore in this respect.

Me? 

I am crazy. ;p

(But not a Crazy Rich Asian hor.)







Reader says...
You are right that face matters in Asian community so does it in H.K. as well.

I am not sure if I still understand Singaporean correctly now but as far as Honkies, I think they are more pragmatic than their counterparts.

I don't say they don't care face but when it comes to money, they prefer money more than face.

People on the street don't put many luxury branded things on them.

I think they like the (saved) money better.





I did find that you guys discussed a lot on financial freedom but don't you guys have the CPF which is supposed to support the post retirement living?

Is it not adequate for the purpose or you guys just want a better than standard living, apart from the possible and unpredictable retrenchment?

Guys, here in H.K. also has a growing concern about financial freedom because our MPF, a copycat of CPF but much less effective, is just a joke.

We really need to be on our own feet after retirement.

No la, you are not crazy at all but just pragmatic and rational.






AK says...
Thank goodness we have the CPF! :)

However, not every CPF member knows how to make good use of it.

For those who know, who are able and willing to, they could have a million dollars in their CPF by the time they retire from active employment.

Enough or not?

That depends on the individual. ;)

A problem with our CPF system is that the government allows members to use their CPF savings for too many things and people forget the primary purpose of the CPF.

More and more CPF members who have used their CPF savings to pay for their homes might find out as they grow older that they might not have enough CPF savings to fund their retirement.






Is it true that Hong Kong people are more pragmatic than Singaporeans?

Do they care more about having money than having face?

I don't know but I know that housing cost is through the roof in Hong Kong and I know that unlike our CPF system, their MPF does not provide a relatively reasonable risk free return.

So, perhaps, this is why they are more worried than Singaporeans about their personal financial health.





I was once told that if we can climb the corporate ladder in Hong Kong successfully, we can do well anywhere in the world because it is that stressful.

I am very fortunate to be a Singaporean and this is one blessing I count all the time.

My fellow Singaporeans, we might not be Crazy Rich Asians but if we do the right things, we will be Pragmatic Rich Asians.

If AK can do it, so can you!






Related posts:
1. If we are not rich, don't act rich.
2. Almost 55, worried about CPF.
3. FRS by age 35 and $1M in CPF.