Tag Archives: retirement

Even as Singapore's political parties are preparing for GE2020, three People's Action Party (PAP) members announced their resignation with less than a week to Nomination Day (30 June). The three ex-heavyweights millionaires are Yaacob Ibrahim, Goh Chok Tong and Khaw Boon Wan, who were all once Cabinet Ministers. As these men bid farewell to politics, let us remember them for some of their more memorable quotes.

SDP said in a strongly worded statement that “The current system manipulated by the present generation of PAP leaders have turned the scheme into a nightmare for Singaporeans, and Clifford Theseira’s case highlights the problems”. SDP also questioned the PAP's continued claims that citizens will squander their CPF savings and would turn to the government for help, stating that there are no data provided to back up these claims. SDP indicated that many Singaporeans are being penalised for the actions of a few.

Will we have enough for our own retirement if CPF lowers the prerequisite for us to make more transfers to our parents/grandparents?

I refer to the article “CPF extends 4% interest rate until end of next year” (Straits Times, Sep 23).

After I wrote “CPF: “No action is required if you wish to start your payouts at age 70”?” (Sep 7) – one of my schoolmates from Raffles Institution called me to ask about a similar letter which his wife has just received – saying that she would receive $910 monthly from age 64, for 24 years – but that she would have to opt for it at cpf.gov.sg (no specific link address).

With the interest rate of the CPF Ordinary Account having remained at just 2.5 per cent since 1999 – using the same calculation (rule of 72) in the remarks of the subject news report – it would take about 29 years (72 divided by 2.5) for your CPF OA money to double.

If you are buying arguably, one of the most expensive public housing (ratio of price to net income) in the world … If you may be putting a lot of your savings for retirement into your flat – leaving you with insufficient funds for retirement … If your flat’s value starts to decline when potential buyers perceive that it may be too old … If at the end of the day (99 years lease) – your flat may become worthless … Do you think you are “smart” or “stupid”?

So, in summary – does “A HDB flat is a “good store of asset value” for those who plan ahead and make prudent housing decisions”, arguably mean that one has either to downgrade to a tiny 2-room flat (assuming one is able to pay the resale levy) or give up the future equity and value of one’s flat in exchange for a lease of say 30 years and some money into one’s CPF?

My last blog on choosing a HDB resale flat generated some discussion and debate. Let me share some additional perspectives. HDB flats, like many private properties, are sold on a 99-year lease. They provide a good store of asset value, so long as you plan ahead, and make prudent housing decisions. The general point is that your HDB leasehold flat is not only a good home, but also a nest-egg for future retirement needs.

I was in Langkawi from 12 to 15 February and spoke to about 10 people about life in general. In particular, I talked to a taxi driver who had worked in Singapore for about six years before returning to Langkawi. He said although he earns much less now as a taxi driver in Langkawi - about RM3,500 a month - he is much happier.