Full retirement sum trend

[henrylbh]

Doesn't Singapore want new citizens who willingly and eagerly volunteer to become citizens? You seem to be suggesting that Singaporean citizenship so awful, so terrible that extreme pressure is required. Seriously?

10 years or so to consider conversion and you consider that extreme pressure? After so long, most will pack up when they got enough or they would just stay at PRs forever.

Quite a number were forced to convert to SC because of their children schooling, leaving one spouse SC and the other PR.

I bought a flat from an angmo last year. He is a professional. He managed to buy a HDB flat as a PR. After 5 years MOP, he decided to leave Sg and balek kampong, even though he is a RC grassroot member.

My friend has been a PR since 1983, though wife and children are SC, but he never agreed to convert.

Conclusion - most never has intention to convert. Ready to abandon ship when tide turn Frankly, it's stupid to convert if I can be PR forever, unless forced by circumstances.

 

[henrylbh]

Actually I won’t rely entirely on cpf life because I have other sources of income too. Thinking of taking responsibility for my own retirement rather than rely on government to do it.

You know the CPF well enough and it's history. If you have faith in it, you can still plan your other sources around the CPF scheme for retirement securely without worry of other sources turning sour, like Noble

Your maths good right? Imagine how much you would have in CPF if your were to contribute to the CPF Annual Limit as a retirement plan for 25/30 years or so.

Besides the amount in RA (whether FRS or ERS) at 55, you would really have a big chunk of savings siting in OA and SA and they are growing till you are ready to withdraw. So besides life payout from 65, you can start amortising your savings in OA/SA anytime from 55 with flexibility and with fairly good sum of money for retirement needs as well as a certain sum as you wish for second honeymoon etc with no penalty Spouse do the same?

But you not "buying the idea of raising the annuity to an insane amount"

 

[havetheveryfun]

Taking responsibility for your own retirement means looking at all the options and working out that the government's way is the best way.

 

[foozgarden]

How old are you?

Once you hit the FRS, the contributions from employment income and yearly interests will definitely be enough to cover the yearly adjustment of the FRS. I just hit FRS in Jan this year, my SA is projected to increase by about 8% every year. As the base grows bigger, the percentage of increase of the SA balance will likely go down but if the FRS is only going to increase by 3% every year on average should be very safe.

 

[starlight318]

How old are you?

39. Did some top ups and transfer from OA

 

[henrylbh]

​

Please translate for non-cina readers.

 

[Opps-gal]

Current projection is till 2020, every year rise around 5000 but percentage wise, it is decreasing due to larger base.

Will the government shift goal post after 2020?
Is there an election next year?

2010-2011 is $8K amount rise
2012 -2013 is $9K amount rise. Not always only rise $5K. Got one time rise $11K (2008-2009)?

What happens if top SA till minimum sum, then need to rise the amount beyond the 4% interest rate increment? Will affect or the sum will take care by itself?

 

[Opps-gal]

​

Please translate for non-cina readers.

The one/two child policy?

http://eresources.nlb.gov.sg/infopedia/articles/SIP_2016-11-09_103740.html

 

[01asdf]

​

Please translate for non-cina readers.

PRC propaganda pieces to have only one child and rely on the government for retirement

The 2nd 2 articles are to delay retirement and rely on own savings rather than government pensions.

 

[OngHuatHuat]

I thought you always bias against malaysia and say Malaysia is a lousy place with a lot of ongoing criminal activities?

Anyway the main reason why I don’t convert is because there is some family lands in Malaysia.

Insane amount no good? Your payout will also be insane. Isn't that what you planning for in retirement? Let the government plan for you

When your CPF savings reached insane level, you got choice to balek kampong. I no choice. No good?

 

[OngHuatHuat]

It won’t, but it will affect your plans at 55 years old.
The additional 1 % actually kind of taking care of part of the increment.

2010-2011 is $8K amount rise
2012 -2013 is $9K amount rise. Not always only rise $5K. Got one time rise $11K (2008-2009)?

What happens if top SA till minimum sum, then need to rise the amount beyond the 4% interest rate increment? Will affect or the sum will take care by itself?

 

[BBCWatcher]

10 years or so to consider conversion and you consider that extreme pressure?

Adjectives aside, it’s certainly pressure. How about carrots instead of sticks?

After so long, most will pack up when they got enough or they would just stay at PRs forever.

That’s not an actual, experienced problem, though. There are data available. The PR inflow is running around 30,000 per year, and the citizen inflow is at about 20,000 per year. Approximately two thirds on a flow basis is (are) progressing to citizenship. That’s not enough? That’s a lot!

Quite a number were forced to convert to SC because of their children schooling, leaving one spouse SC and the other PR.

That’s both a carrot and a government decision. Yes, it’s possible for part of a household to apply for citizenship, e.g. one spouse and the children. The government is under no obligation to approve anybody’s application, and a lot of citizenship applications are rejected.

I bought a flat from an angmo last year. He is a professional. He managed to buy a HDB flat as a PR. After 5 years MOP, he decided to leave Sg and balek kampong, even though he is a RC grassroot member.

And that’s a problem...why? Plenty of citizens leave Singapore, terminate their citizenships (see below), and (if they wish) withdraw CPF funds.

There’s also the reality that Singapore probably would not have enjoyed that particular professional’s peak productivity years, and associated tax revenues, if he were still on an Employment Pass. He would have left years ago. And some citizens were able to resell their HDB unit to him, at a profit compared to their BTO costs, no doubt. And his PR status ended, so somebody else (with about a 2/3rds chance of becoming a citizen) fills that slot. In short, Singapore and Singaporeans still got the better end of that deal. What’s not to like?

Your flat seller is extremely unusual, by the way. It’s even more unusual that he owned a HDB flat. The government sometimes reports PR data with age and racial category breakdowns. The professional you describe fits into the “Other” category, the smallest racial cohort. The best, educated guess is that there are fewer than 500 Caucasians granted PR each year out of the ~31,000 granted. Most likely, most of them are spouses of Singaporeans, although that too is an educated guess based on applying logic to the limited data available. A few of these few “Westerners” are “big whale” investors such as Eduardo Saverin. (OK, maybe he’s not the best example, but as long as he’s not bothering anyone he’s at least stimulating the economy.) If that’s important to you.

The days when the government rubber stamped prototypical Western executive PR applications are long, long gone, and the vast majority of them are gone, too. Singapore and its immigration policies have changed, a lot. The “citizen yield” is quite high now.

Seriously, go look at the data. Everything I’m describing is reality. I don’t know what you’re harping about here — it’s weird. Maybe 15 years ago you might have had a point, but the government already responded to these complaints at least two general elections ago.

My friend has been a PR since 1983, though wife and children are SC, but he never agreed to convert.

So what? You’re upset that he isn’t getting the bigger subsidies and benefits that citizens enjoy? Because...why? You’d like your friend to have more public funds spent on him?

I don’t get it. He’s here not bothering anyone, he’s helping his family (citizens) stay happy, he’s a much lower burden on public funds than citizens are, and...his passport is the wrong color? Seriously, this is a problem that bothers you? I really don’t get it. How would ejecting him from Singapore after 10 years help his family or Singapore? Answer: it certainly wouldn’t.

Conclusion - most never has intention to convert.

Go look at the flow data. There just isn’t this problem you imagine. I’m amazed the flow rate is as high as 2/3rds (PR inflow v. citizen inflow). Moreover, the PR population has been falling as a percentage of the total population in recent years. Up until very recently it has been falling in absolute terms, too.

There are approximately 1,200 citizens who terminate their Singapore citizenships every year, by the way. The numbers of overseas Singaporeans are gradually rising, too. Are these facts problems?

 

[OngHuatHuat]

Now I go overseas trip on annual or semi annual basis, no difference for me.

If I don’t support CPF, I won’t top a huge sum of funds into SA and MA, but this ever increasing retirement sum is worrying because I may need the fund at 55 years old.

You know the CPF well enough and it's history. If you have faith in it, you can still plan your other sources around the CPF scheme for retirement securely without worry of other sources turning sour, like Noble

Your maths good right? Imagine how much you would have in CPF if your were to contribute to the CPF Annual Limit as a retirement plan for 25/30 years or so.

Besides the amount in RA (whether FRS or ERS) at 55, you would really have a big chunk of savings siting in OA and SA and they are growing till you are ready to withdraw. So besides life payout from 65, you can start amortising your savings in OA/SA anytime from 55 with flexibility and with fairly good sum of money for retirement needs as well as a certain sum as you wish for second honeymoon etc with no penalty Spouse do the same?

But you not "buying the idea of raising the annuity to an insane amount"

 

[OngHuatHuat]

@BBCwatcher

I not sure if you were in Singapore during 1990s. That time really Singapore golden years, I really missed Singapore during that period of time.

3 apples 1 dollar. 1 school bag 10 dollars.

Weather also not as hot as current weathers

 

[BBCWatcher]

If I don’t support CPF, I won’t top a huge sum of funds into SA and MA, but this ever increasing retirement sum is worrying because I may need the fund at 55 years old.

The much, much greater worry is that you would need to withdraw anything from what is a 4% interest savings account at age 55. (Withdrawals come first from your Special Account.) That’s the potential problem to fix. If you need to withdraw such funds at that point in time, it’ll be because you’re financially struggling. Can you do something to avoid that?

And if you’re concerned about the BRS/FRS/ERS then that means you’d be withdrawing funds at age 55 such that your age 65 income would be pulled down to something like $800/month (2018 dollars) or less. Which is, of course, not a lot of money to live on. Is that the goal? Hopefully not.

The bottom line here is you fear that you’ll be in poverty at age 55, oversimplifying only slightly. Can you avoid that? Focus on avoiding that, with prudence.

For the record, no matter how the BRS/FRS/ERS evolve, it’s highly likely you’ll still be allowed to withdraw at least $5,000 at age 55 if you wish. Same thing, though: you’d only rationally withdraw from a 4% interest savings account if you’re broke, oversimplifying only slightly.

I not sure if you were in Singapore during 1990s. That time really Singapore golden years, I really missed Singapore during that period of time.

Practically everybody gets nostalgic from time to time, but I find it’s best not to get too carried away with that. There are all sorts of ways the present is better than the past. Not every way necessarily — that would be unreasonable — but, on balance, much better.

 

[tangent314]

If I don’t support CPF, I won’t top a huge sum of funds into SA and MA, but this ever increasing retirement sum is worrying because I may need the fund at 55 years old.

If you need really the fund at 55 years old then you are doing something wrong with your cash.

 

[OngHuatHuat]

After I set aside the retirement sum, I may need some extra cash to venture into another small business or pay down my mortgage loans.

The much, much greater worry is that you would need to withdraw anything from what is a 4% interest savings account at age 55. (Withdrawals come first from your Special Account.) That’s the potential problem to fix. If you need to withdraw such funds at that point in time, it’ll be because you’re financially struggling. Can you do something to avoid that?

And if you’re concerned about the BRS/FRS/ERS then that means you’d be withdrawing funds at age 55 such that your age 65 income would be pulled down to something like $800/month (2018 dollars) or less. Which is, of course, not a lot of money to live on. Is that the goal? Hopefully not.

The bottom line here is you fear that you’ll be in poverty at age 55, oversimplifying only slightly. Can you avoid that? Focus on avoiding that, with prudence.

For the record, no matter how the BRS/FRS/ERS evolve, it’s highly likely you’ll still be allowed to withdraw at least $5,000 at age 55 if you wish. Same thing, though: you’d only rationally withdraw from a 4% interest savings account if you’re broke, oversimplifying only slightly.


Practically everybody gets nostalgic from time to time, but I find it’s best not to get too carried away with that. There are all sorts of ways the present is better than the past. Not every way necessarily — that would be unreasonable — but, on balance, much better.

 

[henrylbh]

Now I go overseas trip on annual or semi annual basis, no difference for me.

If I don’t support CPF, I won’t top a huge sum of funds into SA and MA, but this ever increasing retirement sum is worrying because I may need the fund at 55 years old.

You need fund at or from 55, read what I wrote again. If you done what I thought in lieu of relying on other sources for retirement, you would have a big chunk of CPF savings outside RA (whether FRS or ERS) that you can amortise from age 55. In amortising, quite a sum would be from interest earned, which if not enough then from SA. If you don't need to withdraw, you should still consider withdrawing all the accrued interest and recycle it as VC so that the part of the withdrawal gets into SA ... but that depends on how much interest from SA was withdrawn.

 

[OngHuatHuat]

Seems like a good idea.

Withdraw interest then if funds not needed, can VC back to earn interest.

That’s why I hope they don’t increase too much, coz it will affect the funds in OA and SA which is available for withdrawal after 55.

You need fund at or from 55, read what I wrote again. If you done what I thought in lieu of relying on other sources for retirement, you would have a big chunk of CPF savings outside RA (whether FRS or ERS) that you can amortise from age 55. In amortising, quite a sum would be from interest earned, which if not enough then from SA. If you don't need to withdraw, you should still consider withdrawing all the accrued interest and recycle it as VC so that the part of the withdrawal gets into SA ... but that depends on how much interest from SA was withdrawn.

 

[henrylbh]

OK I do rough calculation (did not double check) for yyhwin. If invest 37,740 at beginning of each year from 30yo to 55yo CPF would accumulate to -

OA $723k
MA $330k
SA $406k

based on prevailing rates of 2.5% and 4% without counting additional interest on 1st 60k and no overflow of MA to SA/OA and no government top-ups.

Assuming SA is the actual FRS at 55 and half of MA overflow to OA after meeting BHS, there will be $888k in OA.

Interest alone would be $22,200 a year from 55, if OA is not withdrawn. If 888 is withdrawn over 35 years to 90yo, go calculate how much can withdraw a year. You get even more if you can shield your SA just before 55.

No easy for me to rough guess what CPF Life payout would be based on 406k at 55.