27 July 2012 (not published)
Editor, Forum Page
Straits Times
Straits Times
A REVIEW OF THE MINIMUM SUM SCHEME
When the CPF Minimum Sum Scheme was introduced about 25 years ago, it was kept at a
modest level. Many members were able to take out a meaningful portion of their CPF savings on
reaching age 55, sum after setting aside the required sum for the future.
Over the years, the minimum sum had increased significantly. Many members are not able to
take out any CPF savings on reaching age 55. The lower income members looked forward to getting
some of the savings for a long awaited vacation or to pay off some debts.
When told that the minimum sum is needed to provide for their future, they argued that
their immediate cash needs are more pressing. After all, it is their own
money and they should be allowed to decide on their priorities.
I suggest that the strong views of these people be considered. Perhaps they should be allowed
to withdraw up to 30% of their accumulated savings on the recommendation of an approved
financial planner who has gone through a financial needs analysis with the applicant.
Tan Kin Lian
Kin lian, I think 50% is a more reasonable %
ReplyDeleteThere are many reasons why these people cannot meet the minimum sum when they reach 55.
ReplyDelete1.They earn less than $5000 a month.
2.They bought too big a house
3.They don't invest or make their money work hard.
4.The engage the insurance salesmen who invest their CPF in either too low a risk endowment or screw up in high risk investment products.(eg. there are still ntuc agents CONvincing people to invest in the single premium growth which pays 2.8% after 10 years. Inflation is 5.5%. It is working hard? Who cares so long the agent gets the commission)You see, engage wrong people.
5.They don't plan their retirement.
I was at a Fairprice supermarket I saw NTUC posters on revosave and single premium growth. How can these products help to grow their customers' fund for retirement?
ReplyDeleteI am sure these salesmen are honest enough to know that these products are useless and they only benefit themselves, ie the commission.
With rubbish products and rubbish agents no wonder people cannot retire.
When I was a younger person, and getting the HDB flat that I waited 5 years for, I asked my friend:
ReplyDelete"How many years should I borrow to pay for the flat?"
He replied: "of course go for the max lah! 30 years! After all, you cant do anything else with it what!
Might as well use all the CPF so that you have more cash every month!"
I pondered over his suggestions and I also knew that many people did what he said.
I signed the loan for 15 years with a monthly portion in cash and CPF.
Lucky I did. And I am still staying in the same flat after 23 years, and I meet the minimun sum too.
Dont follow the herd. Think about your own situation and be resolute. Reducing debt is a key activity towards retirement from your first home to your 3rd child.
There is no other trick.
This is it.
nonsense. people should be allowed to use their own money as they choose! what gives the government the right to dictate to people how much we should save, when to take out, etc? it is easy to dictate when you're taking millions of our money! and they never have to worry about finances. disgusting people!
ReplyDeleteSomeone once said,
ReplyDelete"Mentally, better write off our CPF savings, they dun belong to us, one stroke of the pen, they could be held overnight, and repeated every few years, left only bones for us to pick at age 55."
The minimum sum is already hard to achieve and yet the insurance salesmen are robbing the members by conning them into saving in products whcih return no better than what CPF pays. Members should transfer their spare money from OA account to SA account and earn 5% without risk instead of 2.8% from ntuc . No wonder these members who kenna robbed
ReplyDeletecannot meet the minimum sum.
Blame it on your ignorance and trust you have on insurance agents.
Wake up and attend the FISCA talk to learn about financial planning.
You can bring the horse to the water but if it refuses to drink you cannot force it to drink.
ReplyDeleteAugust 01, 2012 12:09 AM,
ReplyDeleteattend FISCA talk and learn how to manage your money or CPF money. It is true CPF is your money but it is forced upon you and that is why you have money and house. If left to you to manage on your own perhaps you would be on the streets begging.
What you are asking shows you cannot manage money.If you are good what is in your CPF is a small matter. You must thank CPF that you still have some money...to take care of your old age.
Attend the FISCA talk and learn about personal finance
Two Issues with CPF:
ReplyDelete1.The interest returns should be higher than 4%. I had purchased a 14-year education plan which paid 6.56% guaranteed and matured last year.
2.CPF is our hard-earned money too. No one should change the rule with consent of members.
Anon August 05, 2012 10:08 PM,
ReplyDeleteIt is fantastic return for an endowment. It is too good to be true.
But it didn't come without risk, ie it was not guaranteed until you recieved it.
CPF is not able to give more than 4% unless it is subsidised. It is already subsidised.