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11-06-2014, 08:03 AM
http://www.businesstimes.com.sg/specials...s-20140611
PUBLISHED JUNE 11, 2014
MONEY MATTERS
No reason to doubt CPF's intentions
To understand the CPF, we must understand that its primary purpose is to help us meet our basic retirement needs
BYCHRISTOPHER TANPRINT |EMAIL THIS ARTICLE
Serving a purpose: Our CPF is invested into special issues of Singapore Government Securities - otherwise known as Singapore Government Bonds - as they are rated AAA and deemed very safe. - FILE PHOTO
I KNOW for a fact that many of us do not really understand our CPF (Central Provident Fund) well. To many, it is just one of the many ways our government "hoards" our assets. Over the past two weeks, online postings and discussions have brought this mistrust to a higher level.
To understand the CPF, we must understand that its primary purpose is to help us meet our basic retirement needs. It is on this premise that the scheme was built upon and it is from this perspective that we must look from. All other uses of CPF monies are meant to support this purpose. Therefore, rules are set such that if you use your CPF monies for housing, children's education, insurance, paying medical expenses and investments, they must either help you in your retirement or not affect your retirement.
An example would be if you use your Ordinary Account (OA) monies to fund your children's education at one of the local universities or polytechnics. One year after they leave the course, your children have the obligation to pay back the money plus interest not earned by their parents in their OA. Another example will be, if you want to top up say, your parents' CPF account using your own CPF monies, you can't do it unless you have met your own minimum sum as CPF is meant for your own retirement, not your kids' education, nor someone else's retirement.
In the same vein, if you sell your property that was funded by CPF for the purchase, you need to put back the amount you have used plus the accrued interest not earned (if you had kept it in the OA), back into your OA. It is not that you are paying interest for your own money, but rather, this is to be sure that your retirement money is there when you need it.
PUBLISHED JUNE 11, 2014
MONEY MATTERS
No reason to doubt CPF's intentions
To understand the CPF, we must understand that its primary purpose is to help us meet our basic retirement needs
BYCHRISTOPHER TANPRINT |EMAIL THIS ARTICLE
Serving a purpose: Our CPF is invested into special issues of Singapore Government Securities - otherwise known as Singapore Government Bonds - as they are rated AAA and deemed very safe. - FILE PHOTO
I KNOW for a fact that many of us do not really understand our CPF (Central Provident Fund) well. To many, it is just one of the many ways our government "hoards" our assets. Over the past two weeks, online postings and discussions have brought this mistrust to a higher level.
To understand the CPF, we must understand that its primary purpose is to help us meet our basic retirement needs. It is on this premise that the scheme was built upon and it is from this perspective that we must look from. All other uses of CPF monies are meant to support this purpose. Therefore, rules are set such that if you use your CPF monies for housing, children's education, insurance, paying medical expenses and investments, they must either help you in your retirement or not affect your retirement.
An example would be if you use your Ordinary Account (OA) monies to fund your children's education at one of the local universities or polytechnics. One year after they leave the course, your children have the obligation to pay back the money plus interest not earned by their parents in their OA. Another example will be, if you want to top up say, your parents' CPF account using your own CPF monies, you can't do it unless you have met your own minimum sum as CPF is meant for your own retirement, not your kids' education, nor someone else's retirement.
In the same vein, if you sell your property that was funded by CPF for the purchase, you need to put back the amount you have used plus the accrued interest not earned (if you had kept it in the OA), back into your OA. It is not that you are paying interest for your own money, but rather, this is to be sure that your retirement money is there when you need it.