CPF was "100 per cent safe''

[tanjm]

Hi Tanjm,

That's an interesting view! the CPF monthly payout only starts from 65 but the payout is calculated at age 55 when you set aside the min sum amount. Having lived for 25 years since age 55, at age 80, you will still be receiving $1,200 monthly from CPF life yet inflation may have crept in and "your $1,200 is now worth the equivalent of slightly under $600" under the 3% inflation scenario.

And that 1200 is worth about 900 equivalent at age 65 at 3% inflation.

[egghead]

Hi Tanjm,

That's an interesting view! the CPF monthly payout only starts from 65 but the payout is calculated at age 55 when you set aside the min sum amount. Having lived for 25 years since age 55, at age 80, you will still be receiving $1,200 monthly from CPF life yet inflation may have crept in and "your $1,200 is now worth the equivalent of slightly under $600" under the 3% inflation scenario.

And that 1200 is worth about 900 equivalent at age 65 at 3% inflation.

I understand your point now. But need to make some clarifications.

I believe under CPF Life, your current $155,000 at 55 will get you $1,200 per month from 65. In other words, if assuming 3% inflation, $1,200 at 65 is about $893 now (55). And deflating it forward at 3% from 65 to 85 will mean $664 at 85.

[specuvestor]

^^ exactly. As per my previous posts, the minimum sum is only going to go progressively higher because of inflation and low minimum sum as a starting point

http://www.valuebuddies.com/thread-5216-...l#pid85739

IF ONE BELIEVES CPF IS FOR RETIREMENT, there is no logic in removing MS just because people cant achieve it, because it is already very minimum for people to survive on for next 20-25 years.

in the first place MS was created because people wanted to use CPF for other purposes. I think the principle should be that any amount above MS can be used for investment including house, and other contingencies including education can be drawn but must be repaid back. The govt has bowed to pressure in the 80s coupled with with 90s populist measures but ironically most people's gripe missed the point

i mean our $ has to be strong because we import almost "everything". And i agree it's a miracle. This i give credit to our G.

Now you understand the need for having our strong reserves.

Fiat currency is based on faith. So it is guesstimated by reserves and trade. Singapore and Swiss has reserves and relative convertibility, G7 currencies have trade ie acceptability.

[corydorus]

I think many of the complains is the lack of financial understanding that has to be applied to CPF too. Many of us know that money due to inflation has less purchasing power over time but when come to CPF MS, they were thinking G is playing a game to my amusement. Instead of helping to educate this folk, we complain on G and the policy. Btw I did not vote them last time but is for other reason.

We also know MS is not enough to support retirement so do prepared for more increase even to supplement basic level. To have a segment of our retirement fund that gives reasonable returns with ZERO RISK should be advantages. Worth a segment in my overall portfolio management.

[NTL]

I think many of the complains is the lack of financial understanding that has to be applied to CPF too. Many of us know that money due to inflation has less purchasing power over time but when come to CPF MS, they were thinking G is playing a game to my amusement. Instead of helping to educate this folk, we complain on G and the policy. Btw I did not vote them last time but is for other reason.

We also know MS is not enough to support retirement so do prepared for more increase even to supplement basic level. To have a segment of our retirement fund that gives reasonable returns with ZERO RISK should be advantages. Worth a segment in my overall portfolio management.

The name itself already state clearly it is for the "minimum" retirement. For basic food, utilities and transport and maybe (yet to work out) for basic medical purpose. Anything more will need other source of fund.

When talking to any insurance agents, they will say one need at least $1M to retire comfortably. I doubt anyone will be happy if government insist everyone to have $1M of "Comfortable" Sum. So while the government insist on a "minimum" sum of $155k, we still have to build up another $850k of retirement funds somewhere else.

[chialc88]

I think many of the complains is the lack of financial understanding that has to be applied to CPF too.

#1. We spend most of our time doing our own stuff. Who will have time to follow/study those G policies?

#2. Most of the policies were really old. When the changes/updates come, who would have time to digest and understand them? Lack alone, remembering them/the facts too?

Now, I can see the seriousness of this mis-understanding.
People (quite well educated one also), reading the online/forum posts on the "-ve" aspect of these policies and make a wrong conclusion.
To make the matter worst, these posts are not complete story aka half-truth.

I hold the current G responsible to simplify and communicate widely to explain their policies. (which previously I thought otherwise).

Otherwise, Singaporean will continue to suffers under half-truth scenario.
And, then, we spend so much time debating the wrong pictures (and then not enough time to analyze our favorite counters).
(ok lar, we ourself also must make it a point to spend some time to care 关心一下.)

Love Compassion



Earth day - save the world everyday.

[corydorus]

I think many of the complains is the lack of financial understanding that has to be applied to CPF too. Many of us know that money due to inflation has less purchasing power over time but when come to CPF MS, they were thinking G is playing a game to my amusement. Instead of helping to educate this folk, we complain on G and the policy. Btw I did not vote them last time but is for other reason.

We also know MS is not enough to support retirement so do prepared for more increase even to supplement basic level. To have a segment of our retirement fund that gives reasonable returns with ZERO RISK should be advantages. Worth a segment in my overall portfolio management.

The name itself already state clearly it is for the "minimum" retirement. For basic food, utilities and transport and maybe (yet to work out) for basic medical purpose. Anything more will need other source of fund.

When talking to any insurance agents, they will say one need at least $1M to retire comfortably. I doubt anyone will be happy if government insist everyone to have $1M of "Comfortable" Sum. So while the government insist on a "minimum" sum of $155k, we still have to build up another $850k of retirement funds somewhere else.

Exactly. Which is why is best we leave the CPF MS untouch and work on the "850k" with other means. BTW, by the time we have S$1M is not going to be enough due to inflation.

Depending your lifestyle and inflation, if you just FD, probably 15 years only. If you try investment without managing risk and understanding, and loss, could be shorter.
http://corylogics.blogspot.tw/2014/06/co...mount.html

Basically, learning to invest is so important. Not meeting minimum returns annually once you have the money is not sufficient because inflation impact on your absolute will be largest with higher investable amounts.

[NTL]

I think many of the complains is the lack of financial understanding that has to be applied to CPF too.

#1. We spend most of our time doing our own stuff. Who will have time to follow/study those G policies?

#2. Most of the policies were really old. When the changes/updates come, who would have time to digest and understand them? Lack alone, remembering them/the facts too?

Now, I can see the seriousness of this mis-understanding.
People (quite well educated one also), reading the online/forum posts on the "-ve" aspect of these policies and make a wrong conclusion.
To make the matter worst, these posts are not complete story aka half-truth.

I hold the current G responsible to simplify and communicate widely to explain their policies. (which previously I thought otherwise).

Otherwise, Singaporean will continue to suffers under half-truth scenario.
And, then, we spend so much time debating the wrong pictures (and t not enough time to analyze our favorite counters).
(ok lar, we ourself also must make it a point to spend some time to care 关心一下.)

Love Compassion



Earth day - save the world everyday.

The MOH had issued a report regarding MediShield Life, and to me, it is rather easy to read. It is also in the StraitsTimes.

The question is, how many are willing to read? Or everyone will say that they are too busy, and thus need to be spoon-feed? Even so, how many are willing to listen?

And as you said, alot are relying on forums and some of those "juicy" blogs, and I do agree that most of them are looking at things with negative light. So, how they government going to correct these misconception? Shutdown these forums and blogs, and these people will complain the lack of freedom of speech. Sue them, and they will say the government is a big bully. Trying to correct them, and they will throw out more half-truths to drown it. Very tough job!

[Porkbelly]

Yes, I agree too that over time, much of the policies, schemes have evolved to the extent that almost everyone is confused.

Take for example Medishield.

There is the Medishield stand alone which is administered by the CPF. It covers mostly hospital ward C.

Then there is the Intergrated Plans which is offered by private insurers. When it was introduced, the private insurers marketed their products in such a way that one would believe that the original Medishield Plan A or B would only be available through them.

I too thought that Medishield would no longer be available through CPF and signed up for NTUC Income shield.I realise that I am paying double the premiums just to be covered for ward B1 and B2

Now there is Medishield LIFE which replaces Medishield, and a challenge to private insurers offering the Intergrated Plans.

For the time being, it seems Medishield LIFE premiums ( with subsidy ) is cheaper too!

Anyway, it gets very convuluted. Annual value of residence to monthly household per capita income and a varying scale of subsidies for different groups.

With my contribution, its time to close the thread....

[chialc88]

Now there is Medishield LIFE which replaces Medishield, and a challenge to private insurers offering the Intergrated Plans.

My family is always on IP because of the as-charge thingy.
without the as-charge thingy - medishield is out of my comfort zone.

incidentally, I got mine from Dennis Ng (since the beginning of time)

LC




Earth day - save the world everyday.