Monday, March 17, 2008

Keep the money in CPF retirement account

Dear Sir,
I am asking this on behalf of my mother. She has $60K in her retirement account. She is thinking of transfering the entire sum to the NTUC annuity. Is it wise?

REPLY
It is better to keep the money in the CPF retirement account and earn an return of 4%plus 1% bonus (on $40,000).

Your mother should buy the life annuity with savings that are outside of CPF.
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3 comments:

Anonymous said...

Don't do that. Keep it with CPF and get better payouts. CPF pays guaranteed 4%plus. NTUC? at the best 3% and not gauranteed. Just leave it there and find out which is the best option for your mother.

March 17, 2008 10:05 AM
Anonymous said...

As 1st. April draws nearer ntuc agents are frantically and some desperately working very hard to con people to invest into their single premium endowment Growth Policy.
You must be extra careful not to be fooled and get yourself locked and shackled for a long time earning not much more? Only 0.5% more if the product performs as projected in the next 10 or 20 years.Is it worth taking the risk for 0.5% more? CPF offers 3.5% without risk and lock in and if you transfer your OA to SA you get 5% for first $20K without risk and lock in.
What are risks of investing in Growth?
#1. first 3 years you get BIG ZERO
return.
#2. Long lock in;10 to 15 years.
What if you need money before
maturity? You get less than CPF
It is a loss, isn't it?
#3. Is the projected 4% gauranteed?
It depends on life fund. What
is the likelihood of getting 4%
In this low interest rate
environment it is low chance.
#4. Is it inflation hedging?
Absolutely no.. inflation
averages 3.5% over the long
term. Now is about 6.5%.
#5. Is investing in Growth putting
your money work hard for you?
No... it is worse than do
nothing in CPF.
Why take all these risks and go through all the traumas to earn 0.5% more and is not even gauranteed? By transfering to SA you get 4% plus guaranteed.
Does it make financial investment sense?
I am writing to warn you especially those who blindly trust their agents.The agents are going to take
a lot of short cuts to close you.They may even employ unfair and unethical means. Beware!!!
More importantly to those
who are struggling hard to have their decent retirement and who have to have their money work hard for them so that they can buy CPFlife annuity and have some spare cash.
What you must do before your retirement is robbed ,is to get a good qualified and honest adviser to plan your retirement.Sit down with him or her to identify the strategies, the products to accomplish the retirement that you have looking forward to.Don't rush into it. The golden retirement is yours to take and don't let the insurance salesmen ruin it. All the best.

Zhumeng:o)

March 17, 2008 8:04 PM
Anonymous said...

why not opt in for CPFLife?

March 17, 2008 9:44 PM

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