Update (31 Dec 16):
"If I had done this, I would have hit the minimum sum too."
Actions today, results at 55:
A lot of money in my CPF-SA.
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I do not know how best to help the reader here.
Reader says...
Read one of your post and it says that u often tell youngsters to voluntary contribute to their CPF-SA so that it will reach the minimum sum.
Read one of your post and it says that u often tell youngsters to voluntary contribute to their CPF-SA so that it will reach the minimum sum.
I mention this to my parents, and they said that I am stupid, as withdrawal of CPF $$ is controlled by the government and we will not know when will the government raise the age to withdraw or the minimum amount.
They still sarcastically said that putting in the bank to earn the meagre interest rate is even better as we can withdraw as and when we like.
seek your advise
pardon my bad english :)
AK says...
It could be difficult to convince anyone who is suspicious of the system. :)
I will say that the CPF-SA is meant to help us with retirement adequacy.
So, it is not money that is meant to be close at hand, available for withdrawal whenever we might need it.
The money is locked up till we are 55.
What is required for the MS will be put into the RA and the excess is available for withdrawal.
Of course, there must be excess for this option to be available.
If we beef up our CPF-SA in our younger years, we are giving the funds a lot more time to compound and grow more quickly.
I think the magic of compound interest is easy enough to understand.
The magic needs time and if the base is bigger, the growth in absolute dollar terms will be more substantial.
Like I said, the problem your parents have is a lack of trust in the system.
I don't know how to make your parents trust the system.
Unfortunately, as with certain things in life, only time will tell.
I do know friends and also family members who are deeply suspicious of the system.
Some are actually extremely negative about the CPF, to put it mildly.
This is a problem that has to be addressed but I suspect it will not be easily solved.
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Investing in the stock market makes you a gambler.
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3. An(other) open letter to the Prime Minister.