I got this from The Singapore Cancer Society:
So my Dad-in law finally reaches the age to 55 this year. And he doesn’t seem too pleased with the amount that he got from the CPF board. 10% is not a lot of useful cash, not even for the fact that his CPF savings is a couple of grands short of the present Minimum Sum ($131,000).
My real Dad though is lucky to be born earlier. He took his 50% and ran away with it years ago. Gone were the days when reaching age 55 means you can withdraw 50% of your CPF savings. It has been gradually phased out since January 2009 (if the image doesn’t appear, click the square thingy):
For some reasons, the authority concludes that by doing so, it would help sustain ourselves longer. And with the initiative of CPF Life, one will never run out of funds for as long as he live ($570 to $700 per month - enuff or not?).
Well if you ask me, it’s like the CPF board telling us this: “We are going to make buying annuity scheme compulsory, and we got rid of the 50% withdrawal rule so that people would channel the funds back into our CPF Life annuity scheme, instead of those already available in most insurance companies”
What does that means to the rest of us who cannot meet the Minimum Sum?
- No more cash “windfall” happening at age 55
- You can forget about sponsoring your children’s overseas education/wedding with your CPF
- You can forget about using your CPF for capital to start a business
- You have to count on your children to carry out the things you wanna do when you retire
So what could my Dad-in-Law do? Well he could appeal to CPF for further withdrawal, with his fully-paid property as a collateral. A friend of his got his appeal accepted and got more cash out of it (with term & conditions of course).
3 years from now when my mom-in-law reaches the age of 55, they could combine their Minimum Sum (at 25% discount) and withdraw the excess (don’t count on a huge amount here!)
Or he could sell off his home, encash the difference, and stay with one of his kids - or get a place in JB. How’s the market for property this year? Best time to sell?
Or why not rent out the whole unit? And stay with me, we could work out something.
What would you do? Are you still banking on your CPF for your retirement funds? Or your home?
Do you intend to work forever?
I have bad news for you, friend. It’s bad enough that the bank doesn’t tell you the financial risks they’ve been undertaking to get you that “kacang putih” interest rate. The worse thing that can happen is if the bank goes bust, they do not guarantee that you’ll get ALL your money back; if your savings exceeds $50,000 that is.
So the “don’t put all your eggs in one basket” rule applies here.
Speaking of banks, what if your insurance company fail?
The new thing in the insurance industry is the Policy Owner’s Protection (PPF) Scheme. It’s basically an “insurance scheme for your insurance policy”. The bad news, they may limit your insurance claim!
So if you’re a loyal fan of a sole company, and if that company runs out luck, so do you….
- Die too soon
- Live too long
- Involved in a non-fatal Major Accident
- Getting a major illness i.e. cancer
- The person you are caring for has met with one of the above (except point #1)
… if you can’t afford the bet, there are someone else who could take the bet for you. Who’s your guarantor?
- Accidents, Poisoning & Violence
- Cancer
- Ischaemic Heart Disease
- Obstetric Complications affecting Fetus or Newborn
- Pneumonia
- Other Heart Diseases
- Cerebrovascular Disease (including stroke)
- Infections of Skin and Subcutaneous Tissue
- Chronic Obstructive Lung Disease
- Intestinal Infectious Disease
Taken straight from the Ministry of Health (MOH) website. No surprise that Cancer is one of the top killers out there, in more ways than one. And it doesn’t look like its relenting any time soon. Do we have to pay the full price? Not necessarily…
Title: The Economic Argument
What works for you doesn’t necessarily makes it commercially viable..
Remember this show? An episode gives you 5 stories. Some are based on facts, others are fictions. Quite frustrating that I couldn’t get it right on every episodes. This story in particular has got something to do with life insurance.
A husband dies and live behind an insurance policy, but his widow couldn’t claim it because she lost the policy -> sounds legit, but my experience tells me that you could still file a claim without the physical document. The company would have the policy records and it’s just a matter of signing a ‘Loss of policy’ form.
So at the end of the story, her kid made some strange drawings that led the widower to uncover her late husband’s secret cash in the stash. And so they live happily ever after..
True or Fiction?
The answer is..
TRUE!
So the moral of the story is, at this Age, we don’t need a miracle to have enough cash in the stash for the love ones to tide over our eternal absence. Not even a missing policy document would deny you of that cash. True.. or false?
(Suspense)………
Donkey years ago, before Facebook was cool, there was Friendster. But way before Friendster, blogging was the coolest way to rant and share. Every kid has it. It was exciting to read about other people’s stuff, and especially when people read your stuff and leave comments on your posts & your “tagboard”.
If you had typed “MohdKhair.com” back then, you would have met Mister Robot. And he wrote stuff that were made for trash. If you were ardent readers of Mister Robot, then the bad news is that I’m now intending to use this space for something related to my profession. The good news is that this space is now used for a good cause!
No doubt that Singapore has gone a long a way in terms of financial literacy. The mission of this blog is to promote financial intelligence. I strive to be as broad as possible in the subject of Personal Finance, and most importantly, to be as layman as possible.
If I start to sound too textbook, please poke me in the eye and remind me to write in normal English! That’s it for now.
Stay tuned!
P.S. - Would you like to subscribe to this blog? Hit the “like” button on my page on Facebook!
As a reader of Mr Money Moustache’s blog, I got very excited when he got interviewed by a fellow Singaporean. This pretty much covers the grounds in making early retirement in Singapore possible! (Provided that misfortunes don’t happen!) And all the tools we need to make that happen are RIGHT HERE in this country. Tons of gems can be found here!
Live lean, invest right, save the Earth!
Instruction manuals not included.
