Recently, there are a lot of debates on the merits of CPF Minimum Sum (MS) Scheme. Many Singaporeans are upset that the CPF MS has increased yet again and there are certainly anxiety among Singaporeans who are concerned whether they are able to retire comfortably. This has prompted Manpower Minister Tan Chuan Jin to come out and defended the CPF system.

Well, let us be clear what CPF MS is all about. According to the CPF website, “The CPF Minimum Sum (MS) Scheme provides members with a monthly income to support a basic standard of living during retirement. For members who are unable to set aside the full MS in cash, their property bought with their CPF savings will be automatically pledged, for up to half of their MS. Members may also join CPF LIFE with their MS so that they may have a stream of income for life. Alternatively, they may continue to keep their MS with the CPF Board to earn 4% interest per annum currently. The interest rate is revised yearly.”

The reason why many Singaporeans are disgruntled over the rising CPF MS is because they thought that their savings would be locked in their CPF account forever and their money could not be extracted early or prematurely. But is this really true? Apparently this is not so. Generally, there are two ways the money could be disbursed from your CPF account before you hit 55 years old. Firstly, you can withdraw your CPF if:

1) You are a Malaysia citizen and have left Singapore permanently to reside in West Malaysia;
2) You chose to migrate out of Singapore

Alternatively, your CPF monies would be released if you pass away. In this case, your CPF savings will be transferred to the Public Trustee for distribution to your family under the intestacy laws. This way of distribution will safeguard the welfare of your family members. For example, if you are single, your CPF savings will be distributed by the Public Trustee equally between your parents. If you are married, your spouse will receive half of your CPF savings, and your children will share the remaining half.

Actually there is no need for Singaporeans to dwell too much on this issue because there is really nothing Singaporeans can do to change the policy. But Singaporeans can certainly do something for themselves, instead of complaining over an issue which they have no control on. Always bear in mind that if you cannot change the world, you can adapt and change yourself. A survivor will always find ways and means to overcome the various hardships that he encounters in life and become a true champion. This was the hallmark of our forefathers, who had endured and went through so much hardships to achieve what we have today. Of course, life is tough in Singapore, but then again, who said that life is ever a bed of rose?

If you fear that you don’t have the financial means to retire and enjoy life, then take action and start building your wealth immediately. Complaining and procrastinating will not solve the problem because life is really short. You would realize that inaction or delaying investing for retirement would probably cost you more because the younger you start investing, the longer your investment horizon. Generally, a longer investment life-span would have more money-making opportunities and also smooth out the market highs and lows. In addition, make sure you don’t put all your eggs in one basket. Allocate your assets across different investment classes, such a shares, bonds, cash, real estate and gold bullion.

Be a champion, don’t be a whiner. You have a choice.

Magically yours

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