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Thread: New CPF rules

  1. #1

    Exclamation New CPF rules

    Not sure if this has been posted, this news dated 2 mths ago in March 2010. Basically we are all so screwed...

    Read the 5 main points
    http://theonlinecitizen.com/2010/03/...ll/#more-21742


    ONE:
    Upon reaching 55, if your CPF Special Account (SA) plus property pledge, is insufficient to meet your CPF Minimum Sum (MS), which is currently $117,000, your CPF Ordinary Account (OA) balance will be transferred to your CPF Retirement Account (RA) to make-up for the MS shortfall.

    What this means is that you may no longer be able to use your OA balance to pay for your home mortgage.

    So, if you are affected by this policy, use your entire OA balance to re-pay your mortgage before you turn 55.


    TWO:
    If you plan to downgrade to a smaller flat, the sales proceeds (CPF utilised and accrued interest) of your flat will also be transferred to your RA, if you have a MS shortfall.

    What this means is that after setting aside the MS, you may have less available from your flat sale proceeds to pay for your smaller downgrade flat.

    So, if you want to downgrade, do it before 55.


    THREE:
    Upon reaching 55, your OA and SA that is transferred to your RA to meet the MS, can no longer be invested.

    So, if you want to invest your OA and SA, do it before 55. (note: first $20,000 of OA and $40,000 of SA cannot be invested.)


    FOUR:
    For those age 55 and younger from 2013 onwards, CPF Life will be compulsory.

    So, if you plan to migrate, give up your Singapore citizenship, and want to withdraw your entire CPF as a lump sum, you should try to do so before 55.

    Otherwise, only the surrender value of your CPF Life (depending on which of the 4 plans you choose) may be given to you. If you plan to migrate, choose the CPF Life Basic plan as it gives the lowest monthly annuity payout with the highest residue value.


    FIVE:
    When the OA is transferred to the RA to meet the MS at age 55, the OA also can no longer be used to pay for one’s own or children’s tertiary education fees.

  2. #2
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    Default Re: New CPF rules

    this is nasty. basically once passed 55 yo the chance of paying mortgage and children's education will be high from now on.

    These rules approved already? never heard anything about them in the past mnoths.....hope they are just proposals.

  3. #3

    Default Re: New CPF rules

    Quote Originally Posted by nightpiper View Post
    ................... Basically we are all so screwed...
    no doubt, no doubt
    always the Light, .... always.

  4. #4
    Senior Member hanqiang1011's Avatar
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    Default Re: New CPF rules

    Quote Originally Posted by ConnorMcLeod View Post
    this is nasty. basically once passed 55 yo the chance of paying mortgage and children's education will be high from now on.

    These rules approved already? never heard anything about them in the past mnoths.....hope they are just proposals.
    They are stupid proposals... Dont know why gar-ment feed those useless ppl who propose these proposals in that case.

  5. #5

    Default Re: New CPF rules

    they are stopping ppl from withdrawing the $$ out of CPF. The longer they keep $$ there, the more $$ they can invest. Hai .... work till old still cant enjoy. Maybe its a good move, to stop Ah Tong from milking old SG man .. lolx

  6. #6

    Default Re: New CPF rules

    Quote Originally Posted by peterpan1975 View Post
    they are stopping ppl from withdrawing the $$ out of CPF. The longer they keep $$ there, the more $$ they can invest. Hai .... work till old still cant enjoy. Maybe its a good move, to stop Ah Tong from milking old SG man .. lolx
    how is it good? what about those above 55 haven't finish paying their mortgage? the bank will just confiscate their flat....
    Objection !!!

  7. #7
    Member FullFrame2B's Avatar
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    Default Re: New CPF rules

    ...The longer they keep $$ there, the more $$ they can invest...
    Invest like what??? Buy high - Sell low. LOL!
    A Lost Tourist & His Cheap Plastic Camera Not Aloud!

  8. #8
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    Default Re: New CPF rules

    Quote Originally Posted by peterpan1975 View Post
    they are stopping ppl from withdrawing the $$ out of CPF. The longer they keep $$ there, the more $$ they can invest. Hai .... work till old still cant enjoy. Maybe its a good move, to stop Ah Tong from milking old SG man .. lolx
    must migrate young if one wanna migrate so to grab our CPF and go. no country wants someone > 55yo and becomes its liability!

    this evening got a mail from great eastern, saying 3 companies (aviva, ge, ntuc income) have been appointed for the 'eldersheild' health insurance. it says no need to reply unless I wanna opt out. it will just deduct the $$$ from my medisave (definitely not medi-'safe', since anyone could eventually take mnoey out of this account) dude, this means garment is trying to make sure the insurance companies stays in bussiness with you money.

    As always, better to be biz owner than a tax payer.....in this case, employee who contributes part of your monthly salary to CPF.

  9. #9
    Senior Member denniskee's Avatar
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    Default Re: New CPF rules

    so basically we are like, in the show "matrix", batteries, to power up u know who.
    photography makes one sees things from all angles.

  10. #10

    Default Re: New CPF rules

    They need to lock down all the money, so as to patch the big hole from Temasek.

    Also u noticed, they now shaft the annuity insurance policy down ur throat. Pay u $4-500 per mth in the yr 2023... how much will that be todays money value in tom cash?

    Dun forget, before the age of 55, many wud have face retrenchment, its like a trend that started & can't be stopped. I've spoken to many people in the street since 2001, & its really tough to get a similar job, or ur prev profession with even pay cut. Its happening today as well, depending on the sectoru r in.

    One of the sad case i rem clearly was from a cab driver in '03 was... He got retrenched from a petrol company at 50 in '02, was a manager. But cudn't find job, went for the "popular retraining" program by MOM, to be trained as a cleaner. He didn't mind. After training, he got a job but they wanted to pay only $700/mth.

    My clever fellow CSer, can u tell me after CPF deduction, how much wud be left for daily expenses till next pay check?

    The ultimate sad part was, he has 2 children still in school, one in JC & one in sec. House also not paid fully, wife is a hse-wife all this yrs. Want to sell hse, property price also not good, not forgetting still has to find another hse to stay after selling old property.

    End up being taxi driver, at least he can bring back bout ~$1600/mth on average (back then, now dun know how much), no CPF & medical & benefits, etc...

    I pitied him & empathised with what he was going thru, i asked him... "That $700 cleaner job, after CPF, whatever thats left, will u be using it for your daily expenses for going to work or for the children to go to school?" Not forgetting the property needs to pay in cash now since no more CPF contri for a yr liao. Where to get the money?

    Think only in Spore, as politicians then can climb higher at old age, other commoners juz got the boot instead & be branded as "sporeans r choosy"...


    (ps. i must also admit many youngsters r indeed choosy with jobs & i've seen them myself, but also many really & seriously want a job very badly, so that statement as a general stereotyping for fellow citizens is badly made)

  11. #11

    Default Re: New CPF rules

    People, answer me. If you have only 117k (minimum sum) in your CPF account, how much do you expect to be drawing out per month until you die (life expectancy of singaporean is 80 years old)?

    If you depend solely on your CPF for your retirement, than it is better you keep the money in there. You want to enjoy/splurge when the time comes? Then start saving and enjoy on your excess savings.

    The govt made a big mistake by allowing people to withdraw whole sum in the 90s. Too many are not disciplined/educated enough to know what to do with the "windfall" and spend it within a few years. Some uncles spend it on mistress from china or 2nd wives in batam. Others tio con by their own children.

    The maths is very simple. If you still need to pay mortgage at 55 and at the same time don't have enough minimum sum, then it is time to re-assess your lifestyle NOW!

  12. #12

    Default Re: New CPF rules

    How could we don't have money in CPF????
    Don't forget, 30 years of HDB loan repayment for both couple is affordable...
    One of the biggest joke in my life time

  13. #13

    Default Re: New CPF rules

    Quote Originally Posted by scanner View Post
    How could we don't have money in CPF????
    Don't forget, 30 years of HDB loan repayment for both couple is affordable...
    One of the biggest joke in my life time
    hello, what about those divorce?? what about those single? what about those people who got low salary??

    and also, for couple, some wife dont work, they stay home look after the kids . the husband is the only one working..

    you might have lot of money in your cpf, but think of others. it is not cheap to buy a house nowaday...
    Objection !!!

  14. #14

    Default Re: New CPF rules

    Quote Originally Posted by theonlyone View Post
    People, answer me. If you have only 117k (minimum sum) in your CPF account, how much do you expect to be drawing out per month until you die (life expectancy of singaporean is 80 years old)?

    If you depend solely on your CPF for your retirement, than it is better you keep the money in there. You want to enjoy/splurge when the time comes? Then start saving and enjoy on your excess savings.

    The govt made a big mistake by allowing people to withdraw whole sum in the 90s. Too many are not disciplined/educated enough to know what to do with the "windfall" and spend it within a few years. Some uncles spend it on mistress from china or 2nd wives in batam. Others tio con by their own children.

    The maths is very simple. If you still need to pay mortgage at 55 and at the same time don't have enough minimum sum, then it is time to re-assess your lifestyle NOW!
    With resale flats already hitting $600k to $1m, not much fancy lifestyles can be had, i reckon. How many people making big bucks that can pay off in less than 30yrs? Not many have "peanuts" salary like TT Durai. If i have such fat paycheck, i'll get a pte apartment instead, better investment prospect. HDB public housing at such prices is way out in the clouds.

    1st hand from HDB already range from 300 to 500+k, depending on location & "fanciness", 30yrs loan... WOW!! Male finishes NS immediately marries, buy HDB, quickly have kids, all done b4 age 25 cos 30yrs loan is going to see u at 55.

    Another scenario. Singles qualifies to buy a HDB at age 35. 3rm flat resale bout $300k in less hot areas. 30yrs loan on top... Can't even afford to die

    Its not a mistake allowing people to draw out their lumpsum, its their money, they can do whatever they want with it. Do u want me to restrict & control ur usage of your car or computer? Similar analogy. Its ur choice of what u want to do on the comp or how u use ur car or how u want ur hair comb & cut.

    Anyone ever gave a thot what happens from 55 with the 1st small lumpsum pay out, till 62, the 2nd lumpsum? Soon to be revised to 65. That period of time with no employment cos of age... what do u feed on? Getting harder in Spore liao... Jialat.

  15. #15
    Senior Member denniskee's Avatar
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    Default Re: New CPF rules

    Quote Originally Posted by nightpiper View Post

    Think only in Spore, as politicians then can climb higher at old age, other commoners juz got the boot instead & be branded as "sporeans r choosy"...
    and those who choose to go live in another country were labeled "quitter" or something by the big guns some years back.
    photography makes one sees things from all angles.

  16. #16

    Default Re: New CPF rules

    Quote Originally Posted by ninelives View Post
    hello, what about those divorce?? what about those single? what about those people who got low salary??

    and also, for couple, some wife dont work, they stay home look after the kids . the husband is the only one working..

    you might have lot of money in your cpf, but think of others. it is not cheap to buy a house nowaday...
    You might want to read again what I've written.
    I totally agreed to what you have said, is it affordable for S'porean?

    Someone up there only assumed that 30 years loan is afford and you will not be retrench along the way....

  17. #17

    Default Re: New CPF rules

    I think with the progressive CPF increase, Singaporeans may appear more unattractive to hire from the cost to business perspective. Companies may eventually turn to other alternatives such as over-employment, bonus and compensation reduction, hiring foreign workers or simply relocate.

    From the economics perspective, CPF scheme may actually caused your retirement savings to diminish in real dollars term with its dismal 2.5% interest rate (which is lower than our average inflation rate) on its ordinary accounts. So in the long run, it is a money losing scheme. Investors may be better off choosing private investment with their retirement monies.

    Form the top level perspective, CPF and its subsequent schemes are great avenues to fund capital for national investments through Temasek and GIC- provided both generate enough positive returns to break even diminishing dollar value and that dividends are issued equitably.

    Tum podem extulit horridulum...日出東方﹐唯我不敗。

  18. #18

    Default Re: New CPF rules

    Quote Originally Posted by nightpiper View Post
    With resale flats already hitting $600k to $1m, not much fancy lifestyles can be had, i reckon. How many people making big bucks that can pay off in less than 30yrs? Not many have "peanuts" salary like TT Durai. If i have such fat paycheck, i'll get a pte apartment instead, better investment prospect. HDB public housing at such prices is way out in the clouds.

    1st hand from HDB already range from 300 to 500+k, depending on location & "fanciness", 30yrs loan... WOW!! Male finishes NS immediately marries, buy HDB, quickly have kids, all done b4 age 25 cos 30yrs loan is going to see u at 55.

    Another scenario. Singles qualifies to buy a HDB at age 35. 3rm flat resale bout $300k in less hot areas. 30yrs loan on top... Can't even afford to die

    Its not a mistake allowing people to draw out their lumpsum, its their money, they can do whatever they want with it. Do u want me to restrict & control ur usage of your car or computer? Similar analogy. Its ur choice of what u want to do on the comp or how u use ur car or how u want ur hair comb & cut.

    Anyone ever gave a thot what happens from 55 with the 1st small lumpsum pay out, till 62, the 2nd lumpsum? Soon to be revised to 65. That period of time with no employment cos of age... what do u feed on? Getting harder in Spore liao... Jialat.
    As nightmare has pointed out, 600k to 1m is the higher end. That is why I say you have to re-assess your lifestyle. I got mine at zero COV at ulu location low level which many ppl would not even give it a glance. There are options. Get a cheaper flat, buy from HDB for first timer, stay with parents, let go of the car, stop smoking, simple wedding etc.

    So you haven't answer my question about how much 117k can last you. If you don't have any savings and entirely dependent on CPF, why does it matter if that minimum amount gets locked up in the CPF. Does being able to withdraw it any earlier help? Yes, it helps you to live like a king for the first few years.

    The CPF is the people's money. But if they spend it on china mistress and beg on the streets after that, it is the society's problem. It just takes a minor

    And you are correct that minimum sum and withdrawal age will increase. Why? Inflation, life expectancy will increase and working adults to tax on will decrease (if the population doesn't increase). So start PLANNING NOW!

  19. #19

    Default Re: New CPF rules

    Quote Originally Posted by eyes View Post
    I think with the progressive CPF increase, Singaporeans may appear more unattractive to hire from the cost to business perspective. Companies may eventually turn to other alternatives such as over-employment, bonus and compensation reduction, hiring foreign workers or simply relocate.

    From the economics perspective, CPF scheme may actually caused your retirement savings to diminish in real dollars term with its dismal 2.5% interest rate (which is lower than our average inflation rate) on its ordinary accounts. So in the long run, it is a money losing scheme. Investors may be better off choosing private investment with their retirement monies.

    Form the top level perspective, CPF and its subsequent schemes are great avenues to fund capital for national investments through Temasek and GIC- provided both generate enough positive returns to break even diminishing dollar value and that dividends are issued equitably.

    Haha. This argument with bandied about by my insurance friends. It is their responsibility to see that you invest in their products. It is the responsibility of private investment companies to lobby for the release of CPF monies for better returns. My insurance friends always quote nice return figures but those are never guaranteed.

    The problem with being the govt is that they have to think of the whole and not as an individual. Yes, you may be disciplined with money. Yes, you may be investment savvy. Yes, you know how to divest. Yes, you can be 2 out of the 10 that can beat the stock market. But it only takes a small portion, say 20%, to be reckless to foul the whole scheme.

    That's why the govt quickly change some of the rules regarding stock/unit trust investment with the ordinary account money. So many ppl, including me, lost money through our own foolishness. That's why I agree to such CPF restrictions. To protect the foolish. The smart one can fend for themselves. If they are good, they don't have to rely on the CPF money. If you are good too, just treat the CPF minimum sum as monthly kopi money when the time comes to withdraw them bit by bit.

  20. #20

    Default Re: New CPF rules

    Fixed deposit interest rates in Singapore are very weak compared to our neighbours in Australia and New Zealand and that can be an option for those who are jittery over investment in stocks and hedge funds. (www.savingsaccounts.com.au / www.interest.co.nz)

    There are many other investment vehicles in the market that are appropriate to the different types of investors such as stocks, foreign exchange, bonds, blue chips as well as government securities- not to mention the sub-categories of these.

    Insurance and Life Planners are not specialised in in-depth investment analysis and recommendations compared to professional brokers and money managers and hence cannot represent the profession as specialisation differs.

    Assuming that indeed 20% of the population are unthinking people who will squander their pension monies and therefore there is a need for the top brass to monopolise the pension money markets, are we saying that we have to penalise the 80% of the majority investors for the unthinking minority?

    We all know that centrally control markets are usually unproductive and generates poor yields. Russia, Old China, North Korea are examples of mid to long term effects caused by central market control policies.


    As an investor, my money should make more money and that's the basis for investment calls. Even if the monies in CPF are non substantial against my current investment pools, I would rather use it in investment than to see it being devalued in an institution that I have absolutely no control over.

    As this country do not support welfarism, those who squander their monies will eventually be forced into working far into their retirement age. Hence the concern of those who cannot manage their monies is on the facilitation back into the workforce rather than long term full fledge support. That said, the cost of facilitation is nowhere substantial to full fledge financial support and given the rise of many NGOs in the recent decade, there is no evidence to be suggest that the current model for the facilitation back into the workforce will fail in the long run.

    All in all, CPF should come up with full options for private investments and keep its policies open. A lukewarm approach will not do as proven in the previous years that when CPF dictates with the narrow scope of approved stocks and unit trust. Future policy review should focus in creating a transparent and open use of CPF funds for private investments rather than to restrict it to limited offers in the market or forbid entirely on private investments.
    Tum podem extulit horridulum...日出東方﹐唯我不敗。

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