Put all $$$ into Cpf special account, pay housing loan using cash.

sandwicher

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Totally agree. The interest rates are appealing for a reason. It traps your money for life.

The recents bonds issues from REITS are giving at rates higher than CPF (3+%) yet they lock u for 7-10years. By comparison, CPF lock it for your entire life but give a measly amount of 4% is too little

Lol.

REITS gives higher yield because they are equities and you can lose your capital and/or have a decrease in yield. CPF is (almost) risk free.

Please compare apples to apples.

4% is measly for a risk free rate? Go find a better (almost) risk free instrument and see if you say CPF is miserable or not.

*Hint, find a bond, Fixed Deposit or Singapore Savings Bond which gives you 4% or higher yield.
 

sandwicher

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For those who are interested:

http://www.temasek.com.sg/investorrelations

By the way, the interest rate for Cpf special account stagnant for many many years already.

https://mycpf.cpf.gov.sg/Assets/common/Documents/InterestRate.pdf

From 1995 to 2015, 20 years.

Temasek invests in mostly equities, bearing the full brunt of the volatility.

CPF is NOT. It is meant to behave something like a free risk instrument. When Temasek was suffering from huge depression of fair value during the Lehman brother collapse, did your CPF rates decrease/ did you lose your CPF capital? No.
 

sandwicher

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Imagine buying into an endowment plan called "CPF retirement plan".

Their terms are:

The min sum is variable and can only increase over time(and not decrease) when you reach 55.

Coupon can be decreased or increased over time, no maturity date(ie cannot get back your principal and cannot sell and get back like bonds).

Changes to an annuity when you are 65(annuity age can be increased).

Cannot terminate at anytime, putting money into sa is like your money getting sucked into a black hole of no return.

This means CPF can invest your money as much and as long as they want to.

Is that a good plan?

Ps: Temasek Financial 4%-5% 20-30 years AAA bond will be much better if you can afford it. Now min 250k, but I think bonds are going to be changed to $1000 per lot soon.

Not sure if we prefer the CPF, or prefer:

Paying higher taxes (that's the real black hole) to supplement the pension scheme.
When we grow older, we can only HOPE that there's still sufficient funds in the pension scheme (oh look at all the western countries grappling with their crippling pension schemes).

When that hope is gone, due to the unsustainable nature of the system, then we would have paid higher taxes when we were young, but gotten nothing when we're old.

With zero savings too. Because a lot of us would have thought the government will support us with the pension scheme.
 

pcmdan

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Lol.

REITS gives higher yield because they are equities and you can lose your capital and/or have a decrease in yield. CPF is (almost) risk free.

Please compare apples to apples.

4% is measly for a risk free rate? Go find a better (almost) risk free instrument and see if you say CPF is miserable or not.

*Hint, find a bond, Fixed Deposit or Singapore Savings Bond which gives you 4% or higher yield.

Eh...when i say reits issued bonds I meant bonds not equity, did you read it right before commenting? Damn joker

When you put the word almost, it just meant to say u are not confident that it is risk free as well... Joker

please read and read again before you comment.

Compare apple to apple? Greece pension and Singapore CpF? you get to lose them is that apple and apple?

what makes you so confident that you wont lose CPF like equities? CPF covered by SDIC scheme or by any 3rd parties that in the event the govt defaults you will get paid?
 
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SCG8866T

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Temasek invests in mostly equities, bearing the full brunt of the volatility.

CPF is NOT. It is meant to behave something like a free risk instrument. When Temasek was suffering from huge depression of fair value during the Lehman brother collapse, did your CPF rates decrease/ did you lose your CPF capital? No.

What are you talking about? CPF rate is revised quarterly, Temasek financial bonds are AAA guaranteed by Temasek Holding and their coupon yield is set in stone(why, because they are bonds). They have been paying the same coupon for 5 years or more dependent on the issue time and year.

You cant compare a AAA bond with CPF retirement plan. AAA Temasek bond 1)Has a maturity date 2)Can sell anytime with accrued interest. CPF 1)No maturity date 2)Cannot sell. CPF plan is prone to changes as and when they like. Which means for CPF, you will almost never get back your principal and have totally no flexibility with the money locked up in there. In short, you are at the wimps of the person setting the ever changing rules.

Will you feel happy if once you reach 55, your min sum becomes 350k, withdrawal age becomes 72 and coupon becomes 1.5%. There is no rule in CPF that says they cant do that.
 
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pcmdan

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Temasek invests in mostly equities, bearing the full brunt of the volatility.

CPF is NOT. It is meant to behave something like a free risk instrument. When Temasek was suffering from huge depression of fair value during the Lehman brother collapse, did your CPF rates decrease/ did you lose your CPF capital? No.

Please lah if you are supportive of your CPF scheme by all means do so. There are 2 school of thoughts and none is fully right or wrong.

CPF did not reduce your 2.5% do u know why? Cause HDB interest loan is generating 2.6%. In case you did not know, in the event your CPf rates are to increase, people on HDB loan will have to pay higher interest for their loan.

Even if Temasek has a bad year there is a safety net at the back hedging against the poor period in market.

When Temasek earns big bucks did you see your CPF generate higher returns? No!
 
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pcmdan

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What are you talking about? CPF rate is revised quarterly, Temasek financial bonds are AAA guaranteed by Temasek Holding and their coupon yield is set in stone(why, because they are bonds). They have been paying the same coupon for 5 years or more dependent on the issue time and year.

This person is just a blind supporter of the scheme lah.

I dont deny the fact that having CPF is a good scheme. But using only cash to pay your house and letting govt to control when you can use is also the huge con of the scheme. There is no end on when I can really use the money in the future. The age you can withdraw can just keep going up and the amount you can withdraw will never stop to decrease.

20 years ago whats the min. sum.
Today whats the min. sum?

CpF acts like a pension scheme. Just that you pay via your salary and employer contribution. 30-50years down the road how can you tell that singapore will not walk the same path as the western countries you just mentioned? If you cant tell, then everywhere is the same.

You have money you can withdraw, you have CPF, can you withdraw? If one day SG govt falls into the same pblm with Greece (Hopefully never), and block your CPF access, what are you going to eat?
 
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pcmdan

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What are you talking about? CPF rate is revised quarterly, Temasek financial bonds are AAA guaranteed by Temasek Holding and their coupon yield is set in stone(why, because they are bonds). They have been paying the same coupon for 5 years or more dependent on the issue time and year.

You cant compare a AAA bond with CPF retirement plan. AAA Temasek bond 1)Has a maturity date 2)Can sell anytime with accrued interest. CPF 1)No maturity date 2)Cannot sell. CPF plan is prone to changes as and when they like. Which means for CPF, you will almost never get back your principal and have totally no flexibility with the money locked up in there. In short, you are at the wimps of the person setting the ever changing rules.

Will you feel happy if once you reach 55, your min sum becomes 350k, withdrawal age becomes 72 and coupon becomes 1.5%. There is no rule in CPF that says they cant do that.

Totally agree with you. He is just plain blind.
 

tabio80

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looking at the hatred towards PAP in Singapore, I'm not sure they will still be in power in 20years time.
 

pcmdan

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looking at the hatred towards PAP in Singapore, I'm not sure they will still be in power in 20years time.

Thats politics, got no comment. In true honesty, I think PAP is not perfect but they still did a decent job in running the country. Of course there are still many rooms for improvement. Hence I wont use the word hate.

I would still give them credit for running sg to what it is today

If only every PAP members think in this shoe, then I will say CPF is a good scheme for retirement

http://www.theonlinecitizen.com/2011/03/dr-lily-neo-a-rare-pap-breed/
 
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highsulphur

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All talk are cheap. Only way to compare is to wait when two persons of same age with different approaches hit 55 years old .
 

kehyi4

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By the way, SMRA interest of 4% is reviewed quarterly. It's been kept at 4% so far though, but it's not guaranteed. Then again, there must be extraordinary circumstances for them to allow it to drop.
Actually, it *is* guaranteed. 2.5% for the OA is the legislated minimum interest rate. 4% (1.5% more than the OA rate) is the floor rate for SMRA. It can't get lower than that (unless the legislation changes).

edit: oh my, I just read through the CPF FAQ and found out that the SMRA interest calculation is different from what I thought. It's pegged to 10yrSGS+1%, and not OA+1.5%. The "floor" rate of 4% has been in place since the change in 2008, but there's no guarantee that the govt will maintain it. The CPF Act provides a floor rate of 2.5% for all accounts.
 
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limster

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You have money you can withdraw, you have CPF, can you withdraw? If one day SG govt falls into the same pblm with Greece (Hopefully never), and block your CPF access, what are you going to eat?

I don't understand why the discussion/argument has gone in this direction.

TS suggestion is to move CPF-OA to SA.

As I understand it, whether OA, and SA, both can be "seized" by the government if they "feel" like it or if new govt takes over. If you use OA to buy property, the title deed of your property goes to CPF Board, so they can "seize" the property" if they like.

So this has nothing to do with the question whether or not one should move some funds to CPF-SA to earn a little more interest?
 

pcmdan

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I don't understand why the discussion/argument has gone in this direction.

TS suggestion is to move CPF-OA to SA.

As I understand it, whether OA, and SA, both can be "seized" by the government if they "feel" like it or if new govt takes over. If you use OA to buy property, the title deed of your property goes to CPF Board, so they can "seize" the property" if they like.

So this has nothing to do with the question whether or not one should move some funds to CPF-SA to earn a little more interest?

Dont think he explicitly mentioned CPF OA. He said transfer $$, of course we can assume it to be from OA to SA. Of course if he is not planning to use OA at all to get a house, not using the $$ for his/her kids education loan, not using the money in OA for different kind of investments, it might be better to put in SA for safer route.

I never know that just because you use your OA to buy property, the title deed of your property goes to CPF board. From what I know, once you finished paying the loan of your house, the title deed goes to you. If you have not, the title deed sits with whoever that give you the loan (HDB - HDB loan and Bank - Bank Loan)

As to your question as to whether is has nothing to do with a question or not, the answer is not meant for TS but to sandwich.
 
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limster

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I never know that just because you use your OA to buy property, the title deed of your property goes to CPF board. From what I know, once you finished paying the loan of your house, the title deed goes to you. If you have not, the title deed sits with whoever that give you the loan (HDB - HDB loan and Bank - Bank Loan)
you are right , it seems that leaving title deed with cpf is optional after the loan is fully paid, but there is a still a CPF "charge" on the property
 

sandwicher

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My apologies for misreading. Yes you meant REITS issued bonds.

And apparently it's my fault for derailing the topic. I'll take that fault too.

Maybe you may say I'm a blind supporter, but do read why the minimum sum has been accelerated in the recent years. At the current minimum sum, you'll get roughly $1.5k per month. Is that sufficient for monthly expenses (including rental, because that's the full minimum sum)?

If it's barely, then imagine not raising the minimum sum to this amount and then letting citizens complain yet again that the monthly payout being miserable, because frankly, the sum would be low to begin with.

But of course, who's allowed to lock up our money right? It's our money and no one should touch it. Like how the state should not interfere with our retirement needs and not render any assistance when needed too.

It's not a perfect system and I'm not sure what will make it so. Perhaps you've some suggestions to them?

Ok I'll zip it because I'm derailing this thread again. Let's agree to disagree before I'm called a pappies dog or something similar. Apologies if i misread any other comments again. I'm blur and don't know what I'm rambling actually.
 
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pcmdan

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My apologies for misreading. Yes you meant REITS issued bonds.

And apparently it's my fault for derailing the topic. I'll take that fault too.

Maybe you may say I'm a blind supporter, but do read why the minimum sum has been accelerated in the recent years. At the current minimum sum, you'll get roughly $1.5k per month. Is that sufficient for monthly expenses (including rental, because that's the full minimum sum)?

If it's barely, then imagine not raising the minimum sum to this amount and then letting citizens complain yet again that the monthly payout being miserable, because frankly, the sum would be low to begin with.

But of course, who's allowed to lock up our money right? It's our money and no one should touch it. Like how the state should not interfere with our retirement needs and not render any assistance when needed too.

It's not a perfect system and I'm not sure what will make it so. Perhaps you've some suggestions to them?

Ok I'll zip it because I'm derailing this thread again. Let's agree to disagree before I'm called a pappies dog or something similar. Apologies if i misread any other comments again. I'm blur and don't know what I'm rambling actually.

$1.5k might not be enough 20 years down the road. The govt is trying to absolve all duties for supporting the elderly upon retirement when one reaches old age. But this is like saying everyone cant handle their own $$ and needs the govt intervention.

$161k might not be enough, that I dont deny, but there are ways to make the $161k than to solely rely on CPF route. For this instance, I am agreeable that $161k is ok to be locked as min. sum. However, why is the age factor increasing as well? Honestly, based on statistics many people will live above 80, but how about those that dont? Even if there are many living past 80, whats the percentage of the population are there? Cant the govt give handouts for this specific group of people?

I myself, dont think that my suggestion that I bring forth here will make any differences, since Govt will listen to only their army of scholars and not peasants like me.

Anyway, imo, the CPF should have some flexibility, lets say someone is very ill and require the CPF for an operation he should be able to have full assess to his CPF. There should have some parameters in place that allow the use of CPF monies for extreme emergency cases. Next, if govt is not willing to fund the retirement via their own pocket, why not let Insurance companies do the job.

People should have the option to whether park their money in CPF or Insurance Companies or Banks. We should allow whoever who can guarantee higher returns to be holding our money. From my understanding, we are unable to use our CPF even if there is a better product out there giving a better return.

The CPF should be able to use for other things as well and not just limited to House and Education for children. Anyway it makes no sense that we cant use our CPF to pay back our parents' CPF Education loan to us.

I believe many people out there would have other suggestions.

As I am on HP, it is quite hard to formulate my thoughts right now as well, basically i just vomiting everything that comes to my mind without serious thoughts.

We are kinda digressing from the main topic. But why did your questions become the centre of the topic rather than what TS has intended to be is because you were thinking in line of how CPF benefits one and it should form the centre of a retirement plan without thinking of other investment route that can be used by liquid cash.

Anyway come to think of it, for people who earn $5k for 20 years (assuming no increase in salary), his/her OA and SA would contribute at least $161k (have not factor in interest). Hence the question as to whether we still need to put extra money into CPF is the crux. Which leads back to the question of this thread.

Since the salary will be able to give you the min. sum, why do one still have to put extra cash in CPF and not use the cash for more better investment or other opportunity?

Anyway as for TS question (i am assuming liquid cash), i am still in line with using CPF for house and Cash to keep. Why? Reason being, if I really need money I can still use the money that I have saved in the years to fund my emergency needs. Whereas if I locked it up in CPF, I can kiss it "goodbye" for a good 30-40 years.

Of course different people will have different style. I believe every style got their own merits. No one way is a true winning formula. It all depends on many factors and how different people see things. End of day, as long as one is able to meet its retirement needs is all that matters.
 
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OngHuatHuat

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$1.5k might not be enough 20 years down the road. The govt is trying to absolve all duties for supporting the elderly upon retirement when one reaches old age. But this is like saying everyone cant handle their own $$ and needs the govt intervention.

$161k might not be enough, that I dont deny, but there are ways to make the $161k than to solely rely on CPF route. For this instance, I am agreeable that $161k is ok to be locked as min. sum. However, why is the age factor increasing as well? Honestly, based on statistics many people will live above 80, but how about those that dont? Even if there are many living past 80, whats the percentage of the population are there? Cant the govt give handouts for this specific group of people?

I myself, dont think that my suggestion that I bring forth here will make any differences, since Govt will listen to only their army of scholars and not peasants like me.

Anyway, imo, the CPF should have some flexibility, lets say someone is very ill and require the CPF for an operation he should be able to have full assess to his CPF. There should have some parameters in place that allow the use of CPF monies for extreme emergency cases. Next, if govt is not willing to fund the retirement via their own pocket, why not let Insurance companies do the job.

People should have the option to whether park their money in CPF or Insurance Companies or Banks. We should allow whoever who can guarantee higher returns to be holding our money. From my understanding, we are unable to use our CPF even if there is a better product out there giving a better return.

The CPF should be able to use for other things as well and not just limited to House and Education for children. Anyway it makes no sense that we cant use our CPF to pay back our parents' CPF Education loan to us.

I believe many people out there would have other suggestions.

As I am on HP, it is quite hard to formulate my thoughts right now as well, basically i just vomiting everything that comes to my mind without serious thoughts.

We are kinda digressing from the main topic. But why did your questions become the centre of the topic rather than what TS has intended to be is because you were thinking in line of how CPF benefits one and it should form the centre of a retirement plan without thinking of other investment route that can be used by liquid cash.

Anyway come to think of it, for people who earn $5k for 20 years (assuming no increase in salary), his/her OA and SA would contribute at least $161k (have not factor in interest). Hence the question as to whether we still need to put extra money into CPF is the crux. Which leads back to the question of this thread.

Since the salary will be able to give you the min. sum, why do one still have to put extra cash in CPF and not use the cash for more better investment or other opportunity?

Anyway as for TS question (i am assuming liquid cash), i am still in line with using CPF for house and Cash to keep. Why? Reason being, if I really need money I can still use the money that I have saved in the years to fund my emergency needs. Whereas if I locked it up in CPF, I can kiss it "goodbye" for a good 30-40 years.

A lot of people forget that if they have properties, they can decrease the minimum sum to only half the value lor, but the payout gets lesser as well.
But come on, you are getting 1200 -1300 for life if you put aside 161000(current minimum sum).

CPF021.png

https://d1ezz44i5vacye.cloudfront.net/wp-content/uploads/sites/18/2015/02/CPF021.png?3af32a
 

OngHuatHuat

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$1.5k might not be enough 20 years down the road. The govt is trying to absolve all duties for supporting the elderly upon retirement when one reaches old age. But this is like saying everyone cant handle their own $$ and needs the govt intervention.

$161k might not be enough, that I dont deny, but there are ways to make the $161k than to solely rely on CPF route. For this instance, I am agreeable that $161k is ok to be locked as min. sum. However, why is the age factor increasing as well? Honestly, based on statistics many people will live above 80, but how about those that dont? Even if there are many living past 80, whats the percentage of the population are there? Cant the govt give handouts for this specific group of people?

I myself, dont think that my suggestion that I bring forth here will make any differences, since Govt will listen to only their army of scholars and not peasants like me.

Anyway, imo, the CPF should have some flexibility, lets say someone is very ill and require the CPF for an operation he should be able to have full assess to his CPF. There should have some parameters in place that allow the use of CPF monies for extreme emergency cases. Next, if govt is not willing to fund the retirement via their own pocket, why not let Insurance companies do the job.

People should have the option to whether park their money in CPF or Insurance Companies or Banks. We should allow whoever who can guarantee higher returns to be holding our money. From my understanding, we are unable to use our CPF even if there is a better product out there giving a better return.

The CPF should be able to use for other things as well and not just limited to House and Education for children. Anyway it makes no sense that we cant use our CPF to pay back our parents' CPF Education loan to us.

I believe many people out there would have other suggestions.

As I am on HP, it is quite hard to formulate my thoughts right now as well, basically i just vomiting everything that comes to my mind without serious thoughts.



Of course different people will have different style. I believe every style got their own merits. No one way is a true winning formula. It all depends on many factors and how different people see things. End of day, as long as one is able to meet its retirement needs is all that matters.

Thanks for the input.
This is my current CPF balance as of today.
CPF%20balance.jpg


Have been receiving around 5 K plus then 6 K plus interest for the past few years. I din intend to top up further.

Just let it be like my retirement pot and grow on its own.

Currently only contribute 400 plus per month to the MA due to compulsory contribution by self employed.

At the end of 55 years old, should be able to reach around 550K.

This is my safest retirement fund. Chose CPF special coz it din allow withdrawal, so i won't hand itchy to withdraw it and buy stock.
 

SCG8866T

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A lot of people forget that if they have properties, they can decrease the minimum sum to only half the value lor, but the payout gets lesser as well.
But come on, you are getting 1200 -1300 for life if you put aside 161000(current minimum sum).
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You do know that the 1200-1300 that you get is your "forced saving" money right? Not everyone in Singapore needs force saving mandated by the garmen to plan for a retirement. I don't speak for everyone but most of us here can force save and invest safely ourselves in a much better and flexible way.

Treat CPF Retirement Plan as an endowment-annuity hybrid, when you realize the terms in it(three variables that can change without your consent, no maturity, no termination option etc), you will know that it isn't really a good plan.
 
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