What we do with our CPF money is our business.

This blog post is in response to a comment by a reader: here.

The CPF is a topic I blog about frequently and regular readers would know why I consider it a cornerstone in my retirement adequacy strategy. 

I have also shared how we could essentially get the government to help part pay for our retirement, taking back our own money at age 55 in the process.

I have also shared how we could have the government pay for our medical insurance and, ultimately, our hospitalisation bills.






I think if people are willing to keep an open mind and meditate on what I have shared, my own experience included, they will see that what I have shared is viable.

I also have readers who wrote to me to say that after reading my blog, they put what I shared into practice and they are amazed by the results after just a couple of years.

Of course, the government might not tell you why the CPF is good the way AK has told the story. 

Maybe, they should.

Anyway, here is my reply to the reader:

AK says...

I supposed you are responding to Mike's comment but I will kaypoh a bit.

I think if the government should return all CPF money to CPF members at age 55 and then tell them that they are on their own from then on, it is risky to trust that most CPF members will be prudent with money. 

Notice I did not say "all".





Actually, most people are not even interested in improving their knowledge in personal finance. 

This is the honest truth which is also why blogs like mine have so much lower traffic compared to blogs on some other topics such as lifestyle or humor, for examples.





Then, we would also have very cautious people who decide to simply lock up their money in fixed deposits. 

If interest rates remain relatively low, they will deplete their funds relatively quickly. 

They won't get an income for life in their old age.





What about giving people a choice whether to withdraw all their CPF money at age 55 or not? 

I think this is a popular suggestion but, once again, it goes back to the question on whether we can trust people to be prudent with money, specifically, those who choose to withdraw all their CPF savings.

Could it become a case of the prudent paying for the less prudent in some years down the line?




If the government allows CPF members to withdraw all our CPF savings at age 55 and then say that what we do with the money is our own business, the government is throwing caution to the winds.

For the sake of the fellow Singaporeans who are financially more prudent, I would rather that the government err on the side of caution.


Do you think the government should let all CPF members withdraw all their CPF savings at age 55?





Related posts:
1. Get free medical insurance in Singapore?
2. If I had done this, I'd have hit the min sum too.
3. How to upsize $100K to $225K in 20 years?
4. CPF: A simple case of so near and yet so far?
5. An annuity proposal: A Case Study.
(Yes, CPF Life is an annuity too.)
"What? You want satisfaction? Well, then, why stop at taking back our own money? Isn't it more satisfying to take the government's money (legally)?" 
From: A lot of money in my CPF-SA...

Life was difficult and I wondered if Santa Claus existed.

Many things people want to have or suggest that we have in Singapore are, in my opinion, luxuries for our very small country. 

We have no natural resources and our citizen population is going to shrink in future.





We can be idealistic but I believe in being pragmatic. Maybe, it has to do with the fact that my family almost went bankrupt at one time. 

I still remember the fear I went to bed with each night after my mother told me what being bankrupt meant. I was only 12 years old.

The many years that followed, life was much more difficult for my family but we pulled through eventually. 




My parents made many sacrifices to give us children whatever we needed in life, I am sure. Outwardly, things looked pretty normal but those years were probably very stressful for them.

To my parents' credit, they were self-reliant and did not see our MP to ask for help. 

I don't think it was something they even thought of. So silly, right? 

When they found out much later in life from a friend who migrated to Australia that unemployed Australians (especially if they had children) could get lots of financial help from their government, they were amazed. 

Why would people get paid for not doing any work?

We could cite cases of Singaporean families who must be careful with every single cent they have because they need to be and not because they want to be. My family was once like that.

I believe that we should try to help these families but not to the extent that they forget how to be self-reliant. I believe that they would rather receive help so that they can be self-reliant eventually. 







Of course, there will always be those who can never be self-reliant due to severe handicap but for those who have the potential to be self reliant, living life with dignity is definitely not about getting financial aid forever.

For those who have ample resources which can never be exhausted, being idealistic doesn't hurt. For those who are not in possession of such resources, it is better to be pragmatic than idealistic.

Does Santa Claus really exist? If he did exist, could he share with us the secret to the longevity of his financial resources?

常将有日思无日，莫将无时想有时.  
In the days of plenty, think of leaner days. During leaner times, do not dream of riches but work hard to gain wealth. 
Related posts:
1. Do you want to be richer?
2. How to have a comfortable retirement?
3. How much emergency fund should we have?