An(other) open letter to the Prime Minister.

If we are prepared to divorce our wife, we can kick our mother in law in the butt. ;p

If we are prepared to renounce our Singapore citizenship, then, we can kick the CPF in the butt. LOL.

That is always an option that disgruntled CPF members who want their CPF funds released in full can consider, some would say.

They say that we cannot have our cake and eat it too. Now, I think Roy et. al. are trying to have their cake and eat it too by pushing for CPF funds to be returned in full to the public without having to give up their Singapore citizenship. Could this happen? It could possibly happen with a change in our country's leadership. For me, it is a scary thought as I feel that the CPF now is more good than bad.

However, I have faith that as long as there is a sensible silent majority, as long as Singapore is a democracy, the system now will most likely stay intact. Crossing fingers.

Writing open letters to the Prime Minister seems to be the thing to do now and AK will also write one saying what AK would do if he were in government.

Dear Prime Minister,

1. Without deviating from the philosophy that is the bedrock of the system, power up the system to provide higher returns. Singapore is a very expensive country to live in and also to retire in. It is about helping CPF members feel more secure about meeting their retirement needs, a hot topic for a while now. Powering up the returns on the first $60K in the OA and SA was something you did before. Now, powering it up a bit more will definitely help.

2. Inject some compassion into the system while staying level headed. There are those who are irresponsible, who had advantages but squandered them. There are also those who suffer through no fault of their own. Applications by these CPF members to tap into their CPF savings could be given consideration.

Allow micro-tapping if it is going to help meet these members' needs in life. Explain to them the consequences of micro-tapping over the longer term and try to find better and socially more responsible solutions to their problems so that they are resolved permanently.

3. Step up efforts to educate the public on how the CPF can work for them. Let them know what they can do to make a secure retirement happen with their CPF savings as a cornerstone of their financial portfolio. It is about the public helping the CPF to help themselves.

Knowledge gives everyone power while the lack of knowledge gives some amongst us power. This will give a new meaning to the phrase "power to the people" which Roy Ngerng et. al. are using now to rally support. 

Once financial literacy is widespread amongst the people, then, the people will truly have power over their financial health. Only then, will they be truly powerful.

Constant wide reaching education done well is the most important measure to take and will empower our people.

Respectfully,
AK

Related posts:
1. We do a better job than the CPF.
2. Achieving level one financial security.

We do better managing our savings than the CPF does!

In the latest issue of The EDGE, there is a very good 2 page write up by Kelvin Tan on the current CPF rate debate. 

For anyone who would like to be better informed, I would suggest getting a copy:

"It may sound easy but beating the OA's guaranteed annual interest rate of 2.5% is by no means an effortless task for CPF members who are looking to grow their savings under the CPFIS.

"Indeed, only 15% of CPF members who sold their CPFIS-OA investments for FY2013 ended Sep 30 made profits in excess of the OA interest rate of 2.5%... 

"42% of these CPFIS-OA investors actually incurred losses in FY2013...

"While it makes sense for savvy long-term investors to invest their excess OA money, some financial advisers advise their clients not to take any risk with their SA money which is already earning decent returns of 4% to 5% a year.

"For risk averse CPF members... they could consider transferring OA to SA...

"Conservative CPF members can also use cash to top up their SA to the prevailing minimum sum ... (and) could also enjoy a tax relief of up to $7,000 per calendar year.





"(Singaporeans) should look at their CPF SA like the bond portion of their overall portfolio...

"In their retiring years, they should look at their CPF Life as their annuity investment, giving them a monthly amount for life.

"I am happy with CPF Life, an annuity that grows at 4% per annum and pays me $1,200 a month from age 65 until my demise. 

"The annuity will form the income floor of my monthly income needs and will help me hedge my longevity risk," says Tan from Providend.




"Singaporeans who generally have little in their CPF accounts should start saving more, do early retirement planning and invest prudently with a long term view to growing their nest eggs rather than demand higher interest rates on their CPF savings."

There are voices of reason which, unfortunately, I think, will not reach the ears of people who need to hear them most. 

With emotions running high, these words could very well fall on deaf ears too.

"As for Singaporeans who have highlighted that other countries such as Malaysia and India pay higher interests in similar pension schemes, my view is that they forget that our Singapore dollar is rated AAA and has appreciated against the currencies of many other countries," William Cai, GYC Financial Advisor. 

Would we be rather making Singapore dollars and receiving 4% per annum in risk free rate or be making Ringgit or Rupees and receiving 6% instead? 




What is our choice?

Update (27 July 2014):

Source: www.cpf.gov.sg



Related posts:
1. "Return our CPF" protest.
2. Free e-book: Retiring before 60 is not a dream.