Someone asked me to write about CPF.
He said,
"Most of CPF goes to ordinary account- buying government bonds and the return is 2.5%. i think this is terrible policy. Long term retirement savings should be partly invested in the stock market. ST index went up 20% this year and we stuck with 2.5% on the ordinary account.
Not everyone has high salary to save privately beyond what we get in CPF. Many people will not have enough to retire. this disaster is waiting to happen."
Here are my comments:
1. Most people use all of their ordinary account to pay for their HDB flat or private housing.
2. Those who do not use their ordinary account for housing has the option to invest their money under the CPF Investment Scheme into any of the approved investment scheme. They do not need to keep the money to earn 2.5% interest.
3. I recommend that they invest in the STI ETF (exchange traded fund) .This ETF earned a return of nearly 20% in 2012. Those who wish to know how to make this investment should attend the Talk on investments, organised by FISCA (www.fisca.sg).
Read? Average CPF member is not stock market savvy
ReplyDeleteI heard that now insurance agents don't have those single premium endowment to sell to their clients are now asking their customers to put their CPF OA into single premium ILPs....hopefully to earn for them more than 2.5%.
ReplyDeleteThis is very dangerous because these agents would not have sold these single premium ILPs if there are single premium endowments. They are selling ILPs because they have 'nothing' to sell to make commission.
Are you surprised to know that the agents get 4% commission for single ILPs? The high commission is to 'embolden' the greedy agents to push ILPs even they don't know or afraid to sell ILPs before.The sales charge is 5%.
MAS must investigate these insurance companies to see if there is any malpractice.
MAS must also realise that this is to circumvent the ban to incentivise agents to sell particular products.