8/13/2014

When should one stop saving for retirement?


Theoretically one should never stop saving for retirement if one can afford to as no one can tell how long would a person live. For practical purposes, and with statistics available, it is reasonable to say that most people would have died before they hit 90. By 80 probably 80 percent could have died. By 70 very likely 60 percent would have died too. These are just estimates but not too far from realities.
 

Under normal circumstances, people should start to enjoy their life savings about 10 years before the end of their lives. If not, what is the point of saving for retirement? Leaving it too late would mean not benefitting from their savings or leaving too much money unused when they die. Taking them out too early would likely lead to a depletion of the savings, assuming that the life savings are the only source of fund for retirement. In many cases this is not so and many don’t really need to touch their savings when they have too much money or with family support.
 

Would it therefore be reasonable for people to start to withdraw from the savings at 60? It used to be 55. Or would it be a practical thing for people to stop saving for retirement after 60? Why continue to stress on your finances and stinge on your expenses to live a bit better by not savings after 60? Those who have a lot of money to save, by all means keep saving.
 

Is it reasonable for the Govt to force the people to continue to save irrespective of their age? Why are people forced to save at 60, 70, 80 or 100 years? Is the Govt being unreasonable? No such things?
 

For people who are self employed, who need to renew their licences, they are required by law to contribute to their Medisave Accounts regardless of how old they are. There is no limitation on the age of the person. As long as the person wants to renew his licence, pay up. 100 year old also have to pay if one happens to be self employed. Why? The Govt said so.
 

And in the case of people selling their properties that they bought using their CPF savings, regardless of age, they must repay what they took from their CPF savings plus interests. So, if one is 80 and decided to sell his property, if he borrowed $300k from his CPF, he needs to repay this plus the interest, assuming 2.5% for 30 years, or 75% of the loan. The total sum to be put back into his CPF could be $525k. Why would an 80 year old person need to have $525k in his CPF account? It could be a bigger sum, and at an older age.
 

Why is this happening? No one bothers to think through it? No one bothers to amend these irregularities? Or the Govt really wants this to be the case?

Kopi Level - Green

23 comments:

Anonymous said...

the real problem of retirement
savings not enough is people over-
stretching and over-committing in
big ticket items like properties,
cars, top-grade renovations, etc...

never follow the crowds, just live
within your means...

this the only way to survive in
this cruel world...

cheers...

Anonymous said...

The issue of this article is about making people save at all ages.

Anonymous said...

Government wants to be our nanny when comes to money but refuses to take care of us when we are sick. One way traffic.

Anonymous said...

Cpf or medisave is a tax and hence not related to age

Anonymous said...

Simple pleasures don't cost much money. One should live as a net lender, not a net borrower.

On balance, if one has lived frugally and within one's means throughout one's life, all the mechanism put into place is sufficient.

Those oldies collecting card boards or tin cans have a much more colourful story behind their plight if you care to dig deeper.

Matilah_Singapura said...

If you just save for retirement, you will save yourself poor, and eventually be broke.

If you want to maintain a certain level of "lifestyle" in your twilight years, and ENJOY yourself instead of worrying about money all the time, then you'd better have some way of having regular "cash flow".

Within 10-15 years time, there are going to be a lot of BROKE Baby Boomers, with the next generation approaching retirement. I dun know about you, but I'm not going to be in this group of "unfortunates".

Your choice.

Anonymous said...

In Sin, it is save until broke.

jjgg said...

So...should the old man still be earning n saving or spending...there's a lot of unemployed people wishing they can draw on their savings at 60 n probably only 1public servant in the whole world earning n saving at age 90...help me out...what's the opposite of paternalistic?

Anonymous said...

you can't tell the difference between paternalism and robbery.

Anonymous said...

When should one stop saving for retirement?
ANSWER
-------
If PAP is the government.
Singaporeans cannot retire.
We have to work forever.

Anonymous said...

"Is it reasonable for the Govt to force the people to continue to save irrespective of their age?"
RB

It is reasonable (for Govt lah) because the Govt will then have CPF money to invest, earn good returns and to give payouts under CPF Life.

If Govt don't force people to save under CPF, and since Sinkieland don't have oil reserves, where to get the money, u tell me lah?

Anonymous said...

The PAP Govt can do anything but just don't make 60% unhappy enough not to vote PAP.

In this respect, it seems PAP, whether by luck or design, is able to achieve that. And for more than 45 years! And why not for another 5 years?

Anonymous said...

In time to come, as the retirement age keeps on rising, there is no more need to talk about retirement.

So, why is there a need to worry about when to stop saving for retirement when retirement is beyond reach?

Beats me!

Anonymous said...

"When should one stop saving for retirement?"
Under a PAP government ... the answer is never.

The better question is;
"When should one stop voting for PAP?"
- No PAP government
- this means you get back your CPF money at 55 years old ... when you are still alive.

Anonymous said...

According to the cpf website info, if a person sells the property, the principal cpf used and accrued interest is indeed refunded back into the CPF. But for those who are older than 55, they'll transfer monies to top-up the person's cpf minimum sum and medisave mininum sum, and then they'll refund the excess after about 5 days. So if there's lots of money from the sales proceeds, the "excess" will not remain in the cpf accounts.(cmd)

Anonymous said...

For those soulless pimps and prostitutes, all they have to do is pump and pump. Even at 80 or 90. Legs open big big. So pls dun kpkb given that prostitutes also need work fasterer, cheaperer and betterer to open leg big big even at 80 or 90 according to pump and pump logic. Heh heh heh. Uncleeeeee ........, want short time? Ha ha ha. For some soulless, there is no one bit of remorse to sell their grandmothers to exchange for $$$$$. So, retire or save, all these are moot when need open leg big big at 80 or 90? Sinkies need to open leg BIG BIG at 100, uncle Rb? YEW care to tell sinkies this hard truth?

Anonymous said...

Rb: // As long as the person wants to renew his licence, pay up. 100 year old also have to pay if one happens to be self employed. Why? The Govt said so. //

Tiok. Pimps and prostitutes need PAY medisave if want to renew license even at 100 to continue to be pumped and pumped by open LEG BIG BIG to make a living. Life in SINKIELAND is ALL about VICES like casinos, pimps and prostitution etc etc. No? Heard about MBS and RWS? Are they not casinos? Heard about Geylang, Keng Cheo Kar, Mangka Kar, Desker Rd, Chinatown, Orchard, Balestier Rd, Outram, Duxton, Joo Chiat, Katong, Middle Rd, Beach Rd, Coleman St, North Bridge Rd, etc etc? Aren't there many legal brothels and underground massage parlours illegal sex shops operations? Need any pictures, videos, contact numbers, locations, unit numbers, pricing, services etc etc? Related casinos and leg open big big PIMPS and prostitution vices businesses make up about 20% of GDP? No? Next milestone will be 50%? Why do YEW think it is called RED DOT? GIANT RED LIGHT ONE STOP SIN CITY? This is the VISION? To make oldies feel secured? This is our FUTURE? WELL DONE! LOOOOOONG CHONG CELEBRATE ARH.......... A SIN CITY 24/7/365!

Anonymous said...

Rb: // No one bothers to think through it? //

Rb, YEW daft is it?

People are only interested to shake legs, stay in air conditioned 800 storeys HIGH IVORY TOWERS and collect MILLION$$$$$$$$ package.

Otherwise, if anyone bothers to think through, would SINKIELAND stinks everyday and YEW have to kpkb online everyday without fail until the soulless cum here frequently to carry out personal attacks and make ad hominem comments?

They only "think through how to fix YEW". No?

And "think through how to help YEW" which makes sinkies even more insecure and having endless NIGHTMARES. No?

Rb, YEW like THEM to open mouth and say "want to help YEW "?

Does that not scare the shits out of YEW?

Does it not make some oldies pee in their pants?

Funny rt?

Someone say want to help oldies and these people tremble as if they saw a 7th month ghost? Or even worst than that?

Lol

Anonymous said...

Definition of a daft Singaporean:
- Sinkies who think voting PAP will help them get back their CPF money.

Anonymous said...

When to stop saving for CPF?

Good question.

Stop saving when you die lor. When you are dead, you cannot work, so no ore need to save for CPF. Singaporeans are destined to go down this road, unless mindset changes. Singaporean MUST GET RID OF THE KIASU AND KIASI MENTALITY.

Anonymous said...

Why are we voting people in to limit and restrict the use of our own 血汗钱?
Why are are voting people in to force us to give up our citizenship just because we want to take our money back after up to 40 years of locking inside cpf board?

Anonymous said...

Whether we want to use the money controlled by cpf, to buy our retirement homes in JB, Perth or stay put, it is OUR money and not yours.

Anonymous said...

Sinkies like to vote people to control them.