Yep I agree with the article that CPF system is a flop and does not, will not guarantee a peaceful retirement for Singaporeans. How to save more when we are forced to pay more in the form of ever-rising withdrawals such as GST, ERPs? Government policies to initiate expansionary economic measures such as property investment, introduction of even more immigrants to add on to the GDP value are doomed to fail, in my opinion. What Singaporeans need is not Orchard Central, Ion, IRs or more MRT stations.

Thanks to the PAP government’s strategy of (artificial) asset enhancement and Mah Bow Tan’s “affordable” up to 30%-of-income, 30-year-mortgage-loan flats, cityzens will have little in their CPF accounts at the age of 60 (assuming they start paying their home loans at age 60). We effectively start our CPF savings at age 60, leaving little amount and time to compound our CPF savings before being forced to take up a non-inflation-adjusted CPF Life (thanks to Ng Eng Hen). Thanks to the Ministry of Finance for “investing” our CPF funds with Temasek and GIC and “guaranteeing” us with 2.5% CPFOA and 4% for CPFSA). Thanks to Ng Eng Hen for floating our CPF SA rate, which seems to have the potential to pay us less than the previous 4% in the long run. What some of us can count on is the need to pay to top-up cash for their housing loan due to the slashing of CPF contribution rates with age, theh need to pay study loan, car loan, upgrading courses, and even less job security with “new” “world-class” cityzens, etc.

Why?? ..omg…
CPF & Retirement in Singapore, is at best just an ILLUSION!
A bloody MYTH which Mythbuster will probably bust hands down!
First the government hailed the CPF as a Safety Net for all, now they are telling us all not to rely or depend on it…
Go figure.. it shouldn’t be too hard for those scholarly egg heads to know WHY…

Sorry, in my earlier post, it should be “assuming they start paying their home loans at age 30″ and not 60.

Has CPF Board done a “financial needs analysis” in accordance with MAS guidelines for all CPF members? If no, why not?

Doesn’t MAS require all institutions that propose retirement plans to do a “fact find” prior to receiving money from the public?

With the compulsory savings CPF, Singaporeans are already saving $100-200 per month. And the writer is suggesting the government to stop withholding wages is to put blind confidence in the ability for citizens to save on their own.

Let us citizens be honest with ourselves, do we have a choice what to do with our CPF money, in view of all that have said. We do not. Many will die without even smelling the little they have left in CPF Life. Poor people normally have lower life span due to poor health care and minimal supplementary health food..

Our CPF money is just a mean to an end.

We will be forever be manipulated by the government as long as we do not vote them out of parliament. Yes! it takes time and time is of the essence.
We got to do it right now and gradually or it will never happen. Let see what happens when our grand old man sang his auld lang syne.

How to ensure that one has sufficient cash for long retirement in an expensive city state, Singapore.

One should try to think out of the box.

Think of becoming a Robinson Crusoe.

Live in a cheap place but which is the last Paradise on earth, South Pacific.

Be a farmer in another country where one can lease lend at an affordable price. And try to live off the land. Grow food crops and rear domestic animals and fore\age for food from the virgin jungle.

There are other options.

I am sure the brave and adventurous oldies would give it a try and carry out some of the optyions.

The Post 65′ers are the most educated batch in sg history.
Yet, none of these have yet to experience how it is like to withdraw only a few hundred, like $300 (SGD) per month, for retirement.

Is that why these are not complaining like our E-Jay is doing now?
E-Jay has written an important article.
Kudos to you, you have woken up. You have the foresight and analytical mind to see potential problems.

sincerely
Ms Vivian Billy Kristnan, the gal

“#8 Rurehe on November 12th, 2009 9.28 pm How to ensure that one has sufficient cash for long retirement in an expensive city state, Singapore”

Hello reader,

‘expensive city’ is what it IS Today.
Make a guess, what is more likely by the time the batch of post 65′ers retire?
Even more cheaper city to live in ?

So, we should factor in time.

I suspect, it will be hell.

Most of what I earn goes to paying the government…. The following is what I am paying now..

1. Conservancy charges
2. Maid Levy
3. Housing loan installment plus 2.6% interest for the next 29 years
4. Road tax
5. COE (paid in advance for the next 5 years already)
6. Season parking to HDB
7. Income tax
8. GST for everything

If i am lucky, i can retire in 29 years time with $0 in my ordinary account and my house fully paid for.. A

My suggestions…

1. Abolish Maid levy? Why charge maid levy if maids are supposed to help take care of Singaporean kids and old folks?

2. Reduce interest rate of HDB loans… 0% seems reasonable to me… I dont need a high interest rate of 2.5% for my ordinary account savings cause i got no savings there… got to top up cash for my HDB installment some more…

Would be good to do a study ad find out how many is taking advantage of the 2.5% interest of the CPF ordinary account… Versus how many is disadvantaged
by 2.6% interest they pay to HDB (2.5% ordinary account interest + 0.1%)…

We cannot just hold the government responsible for EVERYTHING. Things like taking care of our own retirement is OUR responsibility.

The article talk about property prices. It is true that they have been going up. But it is also true that Singaporeans’ pay had gone up substantially over the past few decades. A better measure is what proportion of their CPF they are using to pay for their housing. THis is not discussed here.

And it is also true that Singaporeans have a responsibility to ensure that they buy properties that they can afford.

Come on Singaporeans, do take some responsibility sometimes. If you cannot responsibility to take care of yourself, then you’ve no business talking about freedom.

Philip,

I’m in the 20s age range, and I can safely assure you that our salaries are not going up quick enough in the past decade to properly provide for the government’s “subsidised” housing we bid for. You speak of the past few decades, but that’s for sure. However, the standard of living is increasing far beyond the reach of salaried persons.

Not all Singaporeans are irresponsible considering the cost of living. Should I move out of my family home tomorrow, I’d rent till the end of my life because it seems to be so much less of a burden. I’d also rather rent than live in a tiny flat that has been priced way above evaluation in a location so far away from my workplace my travel cost goes up, with an insulting sum of ’subsidy’ given to me because I have a pink IC.

Should I do that? Or continue to fight for the right to actual fairer-priced housing?

In this first place, does the Govt teach us how to be responsible? Nope, they are irresponsible in the first place. When the leader turns bad, so are his “servants”.

“We should lobby the Government to stop withholding our wages in the CPF system.” Your solution to a partial retirement programme is to have no retirement programme at all. Amazing leap of faith, E-Jay.

“Your solution to a partial retirement programme is to have no retirement programme at all. Amazing leap of faith, E-Jay.”

You mean you can’t handle your own retirement fund yourself ?

Philip,

“The article talk about property prices. It is true that they have been going up. But it is also true that Singaporeans’ pay had gone up substantially over the past few decades. ”

Did you go and check it up before speaking? Mmm….perhaps you have miss the fact that:

a) rising of cost of living + property prices is way faster then the rate our wages increases

b) LSS will want a Cheaper, Better, Faster singapore, and do you know what is the implication for the workers?

c) Singaporeans for the past years have been told to bear the bitter pills, and accept stagnating wages so that our workforce will be attractive

“We cannot just hold the government responsible for EVERYTHING. Things like taking care of our own retirement is OUR responsibility.”

Yes, we cannot hold them responsible for everything…and it is our own responsibility…but don’t forget that 20% of your wages are been locked up through CPF and you won’t see it in full until the end….

and yes, you can still save part of the 80% …however, with the relentless rising of cost of living and property prices and public transportation, how do you think people can save? And oh…with regards, who do you think plays a huge part in that 2 out of 3 factor?

But, I must say, we must live within our means…There are youths nowadays working in a 2k job, and buying a 3k bag….

How to plan for retirement – how to even think about it – when one has difficulty meeting daily living expenses?

I am clueless!

I am finally realized that it is more and more difficult to withdraw my money in my CPF account as there are always changes in the system. Now I am telling my children, please use all my money in the CPF to your studies, medical care, housing as I do not think I am able to use them or with draw them till I die.
So if we have no money, how to plan for retirement?
Until now, I still do not understand why somebody has to decide for me when and how I should use my own money….

The fact is that we have the highest savings rate in the world. But over the years. the original intention of the CPF was diluted with investments, home ownership and education. Why ? they set the levels too high, almost 23 percent contribution from both employer and employee, with no cap. So we became uncompetitive as workers, in fact as Tony Tan would have said, more expensive than Australia and the US, which drew some disbelief. Contribution rates were reduced over the years, and if we have committed to buying a house based on either the stability of our jobs and the illusion of a high contribution rate, then the maths would have gone awry. If Im not wrong, since the last recession in 1997, when the contribution rates were adjusted down, there was never any serious attempt to revised this as it would cut into our competitiveness.

A lot of friends I know would draw down their CPF to buy a property, even a second property, knowing that they will be left with nothing in the twilight years. In the mean time, they can hope to rent out it out, and maybe the asset will hold its value better than just a figure from the CPF board.

Sure, Singapore looks very impressive to any visitor from around the world. Even our buses and bus terminals are airconned. The government fritters away “our” money in the cosmestics and making the Singapore brand work, but at what cost? Not sounding pessimistic, so what if Temasek of GIC made a killing at their investments. Will it ever reach the ground floor of society.? I very much doubt so. Many questions and issues are not resolved nor explained. We need a change.

The article asks are singaporeans clueless.

I think the main bulk are the post 65′ers none of whom have reached retirement age and the nearest one has to wait 20 years to retire.

Clueless? these people are well-travelled and the highest educated ever.
This does not, unfortunately, mean they are not totally clueless.

1 thing for sure, for the last 50 years, basically almost ALL policies if not ALL policies have been ACCEPTED without challenge or should say ‘protest’ (legal way lah).

Lets be clear, I earn high salaries such that my cpf contribution is not a big sum (cpf capped at $4500) compared to the non-deductable portions. So, though logically i have doubts on the cpf thingie, financially, i cpf scheme is not a big issue to me. But I have the following questions/doubts i like to share with Readers.

Questions for the policy makers:

1. In your educated scholarstic mind, what is the intention for the CPF scheme(s) for citizens in terms of how long you desire or IDEALLY would like it to be?
ETERNAL? 50 years? 30 years? 2 million years? Could you QUANTIFY rather than QUALIFY?

2. In your scholarstical mind, how PRACTICAL is it that the CPF schemes remain ETERNALLY where CHANGE is the Only Constant? How PRACTICAL is it that you expect the majority to continue to Support this thingie with each new generation sprouting up and with each new immigrant coming in? What are the unknowns?

3. Can 1 size fit all? Are there no Exceptions for ciizens to be able to Withdraw all their CPF for , lets say, LIFE AND DEATH Situations? Is Migrating out the only Way Out?

what say you folks?

Selamat pagi!

I think singaporeans are not Clueless. They just think they are smart. Thats all.

[i]But it is also true that Singaporeans’ pay had gone up substantially over the past few decades. A better measure is what proportion of their CPF they are using to pay for their housing. THis is not discussed here. [/i]

whoa! which department you worked for? the same cook who was sent to france for a 5 months trainnin course?
whose wages went up substantiaLLEE? beside the prime minister, his father, his brother, his sister, his cousin and his DOGs…

When they first started with CPF, the first mistake made was that the government did not make sure that CPF funds would earn a reasonable rate of return without its value eroding over time (there were restrictions at that time as to what one can do with their own CPF monies).

Subsequently they allowed CPF for investments, but the second mistake was not educating the public enough so that they can plan for their future. You may argue that the citizens should be responsible for our own retirement, but in the early 70s and 80s, how many of your parents (or even grandparents) know about financial planning and stock investing, like we do today? At that time, they are even not educated enough to fill up a form and needed help to do it.

Given the 2 mistakes above, with our parents’/grandparents’ generation retiring now, the government realised that whatever’s left in their CPF would not sustain their retirement. To avoid social problems of destitude old folks living on the streets, the obvious solutions implemented in the recent years are:

(1) increasing the age when you can touch your CPF savings (assuming life expectancy remains the same)
(2) increasing the interest rate on the CPF funds
(3) encouraging children to contribute to their parents’ CPF accounts
(4) introducing the SRS scheme
(5) reducing the fees charged by professional fund managers who manages unit trusts that CPF funds are allowed to be invested in

All of which in my opinion are too late for our parents’ generation, so guess whose filial sons and daughters are left to deal with the problem?

And don’t even get me started on how ever-rising HDB prices eat into CPF monies, how the rapidly rising cost of living makes the CPF grossly inadequate, how unsophisticated folks are sold complex structured notes….

my stand for the government is that most of their policies had been flop which is nothing productive but pay and pay in terms taxes, gst and expenses incurred till today.

we are given empty promises or should i say ’screwed policies’ by the elites who think they are high and mighty and can do as they wish.

i am f***king pissed with the system here. i have no ideas how i am going face the rest of my life living in such a expensive and uncaring government that only thinking of themselves except us.

E-Jay,

Despite what is said and done,
We have to admit to 1 thingie. That we the People ACCEPTed these in the 1st place.

Come, lets come together.
Its really the People.
They just implement what they could.

All is not lost, freinds. Downgrade your expectations. Sell off your five–room flat (hopefully one’s kids would have flown the coop when many of us reach 60). We just have to learn to live less comfortably in a three-room flat. At least, one will still have cash in the pocket to pay for one’s own meals at the kopitiam when we no longer have the energy to cook.
The thing is, can we lower our expectations, when all the time we have been told that we are first world, Swiss standard and so on? Friends, we have no choice. We just have to tighten our belts. No need to feel too bad. 80 per cent of us Singaporeans are, trapped as some of us feel, in the same boat.
The elite will have enough to live a good life. But alas, the vast majority of us will have to make do with less.
Can we manage to curb our restless souls, to forget this aspiration of wanting to live like the Swiss?
We have no choice, friends, if we want to survive.
But one thing we still can do. We can elect leaders who will not feed us the wrong line of thought. Frankly, if they had fed us the line that it is OK to live simple, humble lives, we will not be so exasperated today.
We need leaders to also live simple, humble lives like the majority of Singaporeans. This way, the politics of envy will not cause us so much unhappiness.
But first, we need a major mindset change — that success need not necessarily mean the accumulation of wealth and material goods. We should aspire towards living meaningful lives doing things that bring us happiness, well into our twilight years.

Downgrade?

Those living in rooms may find it hard to adjust in a small 3 room flat where most people would not stay there as much they could in the day and go outside for more fresh air and room to move.

My 3 room is full of mosquitoes some more.
Imagine the hell in a hell.

aiyoyo

own $ stuck inside

cant take it until retire, omg…

aiyoyo

The property that you live in is not an invetsment. The property that generates passive income is.

So when you are young, you load yourself with umpteen loans like car loan, house loan, credit card overdraft, you become a slave to the banks.This is living well before you can.

If you can accept delayed gratification, live simple until you can live well. Only when you are out of the threadmill of life will you start to enjoy the fruits of your effort.

But the key factor is delayed gratification.

Xian gu hou tian.

Or you can blame all the whole world for the miserable life that you engineered yourself into.

//KopitiamApek

As if every Singapore is doing that: spending excessively.

As if the average Singaporeans are not delaying their consumption through the CPF where almost 30% of their wages are locked up.

Can Singaporeans retire comfortably?

CPF is a open tap for govt to spend.

BTW, the average wage of singaporeans are low.

With the cost of living so high, it is very difficult to save 500 a month.

31) mon

You are entitled to your opinion, and live your life accordingly to your perception of reality.

Retirement planning is a subject that need serious planning when a person is in their early twenty to acheive a meaningful outcome. Many of the older generation, like my parent do not have the luxury of saving as they just earn enough to keep the family felt and clothed. If they were still alive today, they would be totally dependence on us which would not be a problem for me personally. However, they had passed on since the 80s. For present day Singaporean, they had to address this issue seriously and ideally early in their career. For those low income earners, even if they were aware of the issue would find it difficult to do much about it and this is where the state would have to step in. Failure to address this issue now would simpily leave the problem for later as everyone is fully aware, it will not goes away on its own.

Hello fellow citizens,

i am seeing a clearer picture now why we are not a nation and a country mentioned by our esteemed leader but a city …that the road is path with Gold ingots in the eyes of the riches soul…. very soon….in the next decade or more …..reading this morning zhaobao. Singapore fast becoming a dependency or province of mainland China and definitely there is no U-turn in their relaxed immigration policy… let move on

the trend now, not just the super rich but “normal rich” prc snapping up properties in this city more than the rich malaysian, indonesian etcs…. why our “citizen homes” prices never comes down instead the govt “artificially” planned as not to allow private property burst in-spite we are going through the worst economic recession.

and do u know why…. because the high price we pay through taxes for a safe and contribution by all citizens toward security…to be enjoyed by other guests contributing inflated to sustain higher GDP ….think logic citizens – why the guests are here and not surrounding islands – what make up the majority ethnic group in singapore.

property developers putting up road shows in overseas and providing 1st class and one-stop services… free air trips,nice accommodation and good food, school enrollment, banking and legal services and many more….everything you want to know singapore…all out to service You. Developers should thank our govt .. for saving them but in return… who benefit, your guess is as good as mine… Wow, what goes around, comes around… what a wonderful world.

real sad for this city meant for the rich, instead of solving the roots of the problems for the past 20 years which “they” claimed to have the good foresight, back then we still have the resources, now “they” only managed to think short-cut solutions, keep extinguishes all fire around “them” without looking into the social implications aspect affecting the people ….jobs, family, children, retirement etcs…the city outlook just look superficially good but, internally all cracks are appearing.

Like they had hinted “Please take care yourself” when you are out of your unproductive years.

Also, please our people-funded “scholarly citizens” don’t always workout huge economic figures to show to your ‘masters” how much can be collected through your pig head by “Pay and Pay” or “Profit and Profit”, left-hand pocket in(give) to right-hand pocket(out – time to return back to my master)scheme – Please “Stop all this nonsense – don’t keep fooling the citizens” if YOU ARE – have a sincere heart whatever in your policies planning – that have proposed, implemented and before legislated – must benefits both the people of singapore and hopefully the ever-changing elected govt truly mandated by its citizens – afterall, what is the basis moral roles of an government first and foremost. By then, hope it is not too late.

Citizens – U have to decide when the day comes – the “CROSS” you place in your ballot slip – ask yourself sincerely – hey, how is my life and family for the past 10 years – and think hard again – and how do I FEEL things going to impact my Life for the next 20 years still having H igh D ebt B urden….

Get Reals! Citizens, we have to Wake Up from our slumber for the past 44 years, hurray!

Dear citizens, hope the days will not come to us when we realized our retirement vaults might not be make available to issue our monthly pay-out without money contribution by new citizens – even though right now, you may feel happy looking at your yearly accounts statement showing whatever numeric figures…we might have on papers value.

That is WHY, there is no U-turn in their relaxed immigration policy…for new citizens – due to our low birth rates. Your retirement $ can be seen but not allowed full withdrawal by then, and required by new citizens to make-up contribution into the retirement vault.

Please don’t let yours eyes goggle out and yours jaw wide extended from your facial expression – what we have seen in this financial collapse in Lehman, tears coming, by then, it is too late….. Thing logic, what if…..

Always ask yourself – WHY! WHY! WHY! whenever “they” tweak our retirement $, ASK – what are they trying to do with our $ which we are not allow to be use but they decide how much you can use – to return you upon your unproductive years till you leave this mother land.

Think logic again, citizens, if I were to get a loan from financial institution, i can decide whatever i can do with the money upon granted the loan, think hard, what is the difference from the above paragraphs. is this how a how things works…..is .this institution still function like a trustee….without any audit and publish data to its citizen knowing. Is this trustee behave like a SWF.

Really, we have to think REAL and Hard to become Thinking City..

Only Heaven know what is written. I got a headache reading it.

Does the government allow talk of retirement , all I hear is that people have to work longer and longer , and save more and more for a retirement they will never atain due to very old age and bad health .
Remember people who retire have time to think about their life , the future of Singapore , and the things that went well and badly in Singapore , and how well its coverned and organised . Maybe the government does not want this , people who think , they could upset the governments fixed ideas