Major CPF policy shift on the way
Clearly is for those who is in need or exploring early retirement. "Legacy" is for people who are rich enough.
Though we can learn how to be rich, we can't afford to behave to be rich if we are not. 
20-08-2014, 12:19 PM
Most parents even in an ordinary family(not rich at all) will sacrifice for their children (especially Asian's mindset). Even if you are childless lease back is not the best option as far as financial practice by the book says. Once lease back, you have no other financial choice to use your asset. Unless you need a large sum for emergency, i think there is better financial choice. i am not saying G's extra lease back offer for 4-room is bad. Any option one extra is not one too many. Of course if extend to 5-room is even better for some 5-roomers. i rest my case.
WB:-
1) Rule # 1, do not lose money. 2) Rule # 2, refer to # 1. 3) Not until you can manage your emotions, you can manage your money. Truism of Investments. A) Buying a security is buying RISK not Return B) You can control RISK (to a certain level, hopefully only.) But definitely not the outcome of the Return. NB:- My signature is meant for psychoing myself. No offence to anyone. i am trying not to lose money unnecessary anymore.
20-08-2014, 01:14 PM
Hi Temp,
Whats wrong in selling the remaining lease back to HDB? Unlike in other countries, where you sell the lease to the bank, there is a big risk on how Bank treat your lease. However, here the lease is sold back to the govt. I think there is relative safety in it. Most of the books talk about lease back to the bank. Also, it is one of the better ways when you are asset rich by cash poor. (20-08-2014, 12:19 PM)Temperament Wrote: Most parents even in an ordinary family(not rich at all) will sacrifice for their children (especially Asian's mindset). Even if you are childless lease back is not the best option as far as financial practice by the book says. Once lease back, you have no other financial choice to use your asset. Unless you need a large sum for emergency, i think there is better financial choice. i am not saying G's extra lease back offer for 4-room is bad. Any option one extra is not one too many. Of course if extend to 5-room is even better for some 5-roomers. i rest my case.
20-08-2014, 02:08 PM
The leaseback that is offered is not favourable to the owners. It does not take into account of the appreciation of the hdb value in future. I hope gov provide some explanation to the poor or less educated, before they sign on the paper. I would say a better option is to rent out rooms, if possible rent out whole unit. HDBs rental is among the highest yield in Singapore. And also becos of this reason, many PRs come here bcos can make some money out of hdb.
 (20-08-2014, 02:08 PM)Freenasi Wrote: The leaseback that is offered is not favourable to the owners. It does not take into account of the appreciation of the hdb value in future. I agree with you that renting out will likely provide the highest cash flow. However, it is simplistic to compare it with leaseback because: 1. You get a lump sum upfront in leaseback 2. The portion of the lease that is sold back is the least valuable part of the property (remember the value goes to ZERO after 99 years?) while the owner still gets to enjoy the property for the next 30 years 3. Appreciation? Why not depreciation? My point is - who knows for sure?
20-08-2014, 02:40 PM
(20-08-2014, 02:24 PM)egghead Wrote:How do you know how long you going to live exactly? How to compensate for the risk of living too long or too short after lease back? Or G got a "Fixed Formula?" These are just a few disadvantages.(20-08-2014, 02:08 PM)Freenasi Wrote: The leaseback that is offered is not favourable to the owners. It does not take into account of the appreciation of the hdb value in future.
WB:-
1) Rule # 1, do not lose money. 2) Rule # 2, refer to # 1. 3) Not until you can manage your emotions, you can manage your money. Truism of Investments. A) Buying a security is buying RISK not Return B) You can control RISK (to a certain level, hopefully only.) But definitely not the outcome of the Return. NB:- My signature is meant for psychoing myself. No offence to anyone. i am trying not to lose money unnecessary anymore. (20-08-2014, 02:40 PM)Temperament Wrote: How do you know how long you going to live exactly? I don't and nobody does. (20-08-2014, 02:40 PM)Temperament Wrote: How to compensate for the risk of living too long or too short after lease back? I don't. Say I am now 65 and do the scheme and I am still alive when I turn 95 without any dependent, I am prepared to bet that no Govt will risk the negative publicity of chasing out a 95 years old and let him die. In any case, refer to official HDB answers here.
20-08-2014, 02:58 PM
(20-08-2014, 02:50 PM)egghead Wrote:Maybe, maybe not. But can they put you in "Old Folk Homes" presuming you are still healthy? If you are not healthy, i don't think you can stay alone for so long.(20-08-2014, 02:40 PM)Temperament Wrote: How do you know how long you going to live exactly?
WB:-
1) Rule # 1, do not lose money. 2) Rule # 2, refer to # 1. 3) Not until you can manage your emotions, you can manage your money. Truism of Investments. A) Buying a security is buying RISK not Return B) You can control RISK (to a certain level, hopefully only.) But definitely not the outcome of the Return. NB:- My signature is meant for psychoing myself. No offence to anyone. i am trying not to lose money unnecessary anymore.
20-08-2014, 06:38 PM
(20-08-2014, 08:32 AM)corydorus Wrote: National Rally 2014 speech touches CPF and Financial Planning. I am in full agreement that the issue is not minimum sum but sustainability to support retirement through CPF commitments. Leaseback extends to 4 Room is good news. I hope this can be extended to all properties. I have a slightly different perspective. Like I posted in another thread, if I am asked if I "trust" the current government / incumbent political party, that they are competent and pragmatic; the answer is unequivocally YES for the PAP old guards, a definite NO for the Goh Chok Tong era (asset enhancement scheme, infrastructure falling behind population growth etc) and a MAYBE for the current leadership because I perceive too much populist tendencies (when you appease a monkey with peanuts, it grows into a chimpanzee and if you continue it grows into a gorilla and finally into King Kong!). The title of the article referenced at the start of this thread is "Major CPF Policy Shift On The Way". IMHO the only "Shift" is the ability to withdraw 20% of the minimum sum at the age of 65. The rest are "Tweaks": Extending lease buyback to 4 room flats (I note that this is not a popular option even amongst 3 room flat owners). A "new" Silver Bonus promising top ups for older Singaporeans who do not have enough in their CPF accounts, do not own flats and are without family support (ST estimated that this will benefit about 10% to 20% of Singaporeans which I find a really scary statistic) aka along the existing trajectory of more help for the very poor and vulnerable. An (last?) increase in the minimum sum to $161K in 2015 which is a continuation of the current policy trajectory without any "Policy Shift" towards helping Singaporeans achieve it. My ideal Government is one of leadership predicated on the ability to make hard headed decisions based on principles. The public need not always agree with their decisions but a majority should hold the opinion that the Government do have valid reasons behind them. The Government also need not always be right but they should be accountable for their mistakes and attempt to fix them rather than insist on maintaining an aura of omniscient. While I do appreciate that the incumbent government must be seen to be responding to public demands but, based on this standard, I really did expect more given that this was a highly anticipated nationally televised moment of truth to be delivered by the Prime Minister himself. So what is the standard that I expect from a "Major CPF Policy Shift"? I admit that I was impressed by the white paper put up by the National Solidarity Party (see https://docs.google.com/file/d/0B1axuAdy...hJaGs/edit ). To be balanced, their proposals will result in a major increase in business costs and affect Singaporeans' ability to service their existing mortgages so I do have strong reservations. But while I am not making a carte blanche plug for them, I do believe that credit should be given where credit is due. My hope is that when the MOM Advisory Panel on CPF Changes is convened, that they do look for good ideas even from the opposition parties. The aim should be to try to make CPF a world class retirement scheme and not for the incumbent Government to try to maintain their aura of omniscient. Btw I did not vote for this gov last time as well. That was after a most unsatisfactory dialogue with my MP over my perspective that foreigners were being treated better than Singaporeans. But that is a post for another day.
No one should ever blame the government for insufficient funds for retirement.
It is very much left to the individuals how they plan their life. I would rather the government do less in many areas. they have too much control over too many things already. Take a look at our biggest companies, or the companies that serve our daily needs...food, housing, water, transport, banking etc etc How much of your salary goes to the government DIRECTLY(or indirectly)? |
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