3/20/2009

CPF savings not enough for retirement

I fully agree with Aaron Low, ST's political correspondent, on his view that CPF savings will not be enough for retirement. At the rate inflation is eating up the value of the savings, many will be hard push for money to pay for their basic expenses. The question is why CPF savings, about 40% of a person's life time income is not enough. Oh, they have been buying affordable housing and paying for affordable hospitable bills. Ok, these are affordable expenses and reasaonable to spend them. So how to make sure that after spending on these affordable items at affordable prices the retirees will still have enough money to live on? One way as suggested by Aaron, is to give up the idea of leaving something behind for the children. Have an inflation pegged annuity plan that will ensure that every cent is used up. Nothing to be left behind. I have another brilliant idea. Raise CPF contribution to 60%. This should work for a while if inflation is still at 6-8%. But if the price of housing and medical bills keep going up according to market prices, or if inflation is higher, this may still be short. If that is the case, we can raise it to 80%. It is prudent to save for the future. Tighten the belt if need be.

10 comments:

Kaffein said...

The key word here is 'Affordable' as many agencies claim. If the wages are not comparable with inflation and 'affordability', then I think we have been hood-winked, totally deluded in what our media has wanted us to think.

That's why the truth is turning around and slapping us hard in the face to wake up.

Kaffein

Anonymous said...

How to give up the idea of not leaving something behind for the children?

Some things, like the balances in the CPF retirement and medisave accounts cannot possibly be taken out completely to live on. It is paid to your dependants when you are gone.

What is left of any annuity (assuming there is a guaranteed payout period not exhausted yet) will also go to your dependants.

Then there is the house. You may not want to sell it off while you are still living, unless you really mean to leave this world using up every single penny possible.

You may end up without a roof over your head, if you cannot qualify for rental flats.

Lost Citizen

Matilah_Singapura said...

First of all there is no such thing as "CPF savings". It is a pyramid scheme, funded by a tax euphemistically called "contribution".

Any marginally-intelligent fool with a minimal govt school education can figure out that whatever you can "get" from CPF will never be enough to retire on.

The scheme was a sham to begin with.

However, the CPF-HDB nexus makes a great political tool, and continues to be used very successfully to manipulate the voters — most of whom live in HDBs paid for through "their" CPF "savings".

Who says bullshit doesn't work?

Anonymous said...

haha. u have just described the pap proecess.

got problem? raise cost/fee/fine etc.
solved? if yes claim credit, if no continue to raise cost/fee/fine.

even 3 yr old can do it. why do we need a few 3 million clowns to do it??

Anonymous said...

It is damn obvious that the cost of HDB Housings, supposedly subsidized, is so high that many Singaporeans are unable to keep up payments using CPF/top ups in cash.

How the hell can Singaporeans depend on CPF for retirements. Work till you drop and one may not even have a good final sent off to the crematorium.

redbean said...

don't worry, the pay will be increased to make it more affordable.

the americans called the top employees of AIG paying themselves huge bonuses as near criminal indulgence.

who is committing near criminal indulgence here?

bbqchickenwings said...

Give up the idea of leaving something behind for the children?

Wait a minute, you know what? Those children who has nothing left behind from their parents will find it extremely difficult to kickstart their career and families.

A new worker, whose parents have no savings, will find it near impossible to get married, buy a house, have children and give their parents an allowance all at once.

redbean said...

these are not their concerns. they have all planned out for their children. each will be bequeath with a landed property and at least several hundred thousands in their bank account before they even start to work.

for the losers, just be grateful that they got a job and a roof over their heads.

but as you said, the loser parents have nothing for them and it will be really tough to start life on their own.

Matilah_Singapura said...

anon 945

> How the hell can Singaporeans depend on CPF for retirements <

You're not supposed to. Even the govt has admitted 'indirectly' that CPF is not enough (although they still use it as a political tool).

The 'masters' encourage people to take out private insurance, savings schemes, investments etc to fund their retirement.

CPF and the mechanism behind it funds the retirement of the elites more than it does the people :)

bbqchickenwings:

> A new worker, whose parents have no savings, will find it near impossible to get married, buy a house, have children and give their parents an allowance all at once. <

It is unwise to get into a mortgage and raise a family if you don't have the means to do so, or have a plan to attain the means to do so.

However, you're not going to stop people doing dumb things. That is why dumb people usually turn to the govt for help, thus you have th politicisation of CPF-HDB.

Never forget, there are many dumb motherfuckers around, and they are so fucking stupid they will 'steal' from you (through the govt) before taking responsibility for themselves and figuring it out.

redbean:

> the loser parents have nothing for them <

One thing great about humans, is that if they admit and learn from their mistakes, they increase their chances of eventual 'success'.

However, many people don't bother, because it is easier to vote in a govt who will 'help you' through welfare programs.

Anonymous said...

Anon 945 says;

I had never believe I am ever lead by anybody, Nature had being kind to endow me with independent decision.

I can choose euthanasia, suicide, stupidity, generosity, and whatever traits I fancy and there is absolutely hardly anyone can prevent me from doing so. I love living with others for a fuller living. But, to hell with those that cause me miseries.