Monday, 18 January 2021

Inconvenient Truths About CPF Voluntary Contributions


Looking at the title of this post, and reading the CPF contribution rates below, can you see or guess where I am going with this post?


 CPF Contribution Rates from 1 Jan 2016



Its painfully obvious for those old fogeys that are older than me; I'll be 54 years young this year.


Let's start with a bit of foreplay to make things smoother for youths to appreciate. Wink.


Just look at the Employee Contributions Rates for now.

At age 55 and below, its mandatory (forced) that you contribute 20% of your pay every month to CPF - all the way to the CPF salary cap of course.

Eh?

Once you hit age 56 and beyond, you can contribute less and less? 

So when old fogeys age 56 and beyond share they are voluntarily contributing to CPF, are they?

I mean, they have to voluntarily contribute in dollar amounts beyond what they had previously contributed at age 55 to really meant its extra money into CPF right?

Remember, we are still looking just at the Employee Contribution Rates side of the equation.

LOL!

I think some of you know where I'm going with this.


Mind you, I am completely happy with the current setup for this Employee Contribution Rates setup.

I've always liked options.

Some don't. 

Ai yeah! Have to make decisions again!!!

Imagine in an alternative universe, we put the mandatory Employee Contribution Rate at 5%, and allow CPF members to decide how much extra they would like to voluntarily contribute to CPF up to a cap of 25%?

Just saying.

Nah. 

I don't think we are ready yet... 

I'm super impressed with the Swiss for rejecting helicopter money just for being a Swiss citizen,

One day when Singapore is ready for small government; not a nation of daddy's little girls and mama's little boys.

Maybe.




OK, enough foreplay. 

Let's do it!

Get ready for some pain though...

Now look at the Employer Contribution Rates column.

Pain right?

Especially for those of us old fogeys who tasted what's it like to have our employers contribute 25% into our CPF.

My only regret was that I was earning too little at age 16 to really benefit from the higher employer contribution rates then. I mean 25% of $500 is not the same as 25% of $2,000...

But its for our own "good".

I mean if we don't lower the employer CPF contributions (pay cut is pay cut), how can we be competitive? Wait recession how?

Wait a minute.

When CPF was first introduced, I would think there were smart people (scholars?) that did the math to come up with the 25%/25% formula for us to have enough after our retirements at age 55 right?

Did they just pluck the 25%/25% figures out from thin air?


OK, that was then. Now is now.

Especially when we are living longer, have higher standard of living, with ensuing higher inflation (HDB 1 million); and all the wonderful things that come with growth and longevity...

See the irony?

We moved the goal posts on CPF withdrawal age, increased the CPF minimum sum, introduced CPF Life so we can patch West wall with East wall; yet, as we grow older, our CPF contribution rates in percentages are going southwards... 

Even more interesting when compared to the initial 25%/25% contribution rates!!!

What gives?


Of course something has got to give.

They tried it with CPFIS. 

That's the Earn More option for CPF members with higher testosterone levels to close the gap.

That turned out "not fit for purpose"....

Got to feel sorry for big daddy.

He must be face palming himself and muttering, "My children can't do anything without me..."


Sometimes its good to know a bit of financial history to get the total overview.

If more CPF is good, better, best, wouldn't it be better to restore the Employer Contribution Rates back to 25%?

Cannot!

Buy you are most welcomed to voluntarily contribute from your Employee Contribution side anytime!

I see what you did there daddy!

LOL!








Thursday, 7 January 2021

Too Young and Too Old for MRSS

 

Ai yeah! 

I'm too young and mom is too old to qualify for:


Matched Retirement Savings Scheme



Eh? 

Aren't I the one who abhor doing voluntary contributions to CPF?


Hello, its only $3,000 lah. 

If lockup $3,000 can get $3,000 extra for "free", why not?

I wouldn't say no to "free" money!


At my age, this "free" $3,000 will come mighty handy for future medical expenses.

Too bad mom don't qualify though...



You know what's interesting?

The article says 53% of CPF members qualify for this scheme.

I'll pause and let you sink in.


Do you see what I see?






Monday, 4 January 2021

Another Money Losing Year - This Got To Stop!

 

I'm down -3.5% for year 2020.

Started the year at $11.28; ended it at $10.88.


Eh... I wanted to breakout of my $11 to $12 hentak kaki band in recent years, but that's not exactly what I had in mind...

LOL! 


That's the the price we pay for Earn More. 

You want ZERO capital losses in nominal terms, please move over to the Save More camp.


To recap:


2013 - Doubled my trading account (Rampage!)

2014 - Tripled it! (Godlike!)

2015 - Up 88% (Double happiness!)

2016 - Up 13%... (Shy, Shy, Shy - Yes, its from K-Pop Twice's Cheer Up MV)

2017 - Down -8% (Opps!)

2018 - Up 6% (Road to recovery?)

2019 - Down -3% (Smack to the face. In your dreams! Recover your head!)

2020 - Down -3.5% (This got to stop!)


And to think year 2020 started so well.  I was almost kissing $12 during March 2020.

Oh well, I guess its not to be...


A broken clock can still get it right twice a day. I've even underperformed a freaking broken clock!!! 

"Malu" or what?


I am taking off the magi mee pot protecting my man-whore face (tunk chia one). 

Come everyone, you can throw eggs at my face.





 

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