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Monday, 9 June 2014

Know your CPF queue number

During 2011, when the Greece economic crisis was brewing, I remember an interesting conversation with my Greek colleague in his early 30s.

This colleague came from a privileged background - let's say his parents were the equivalent of the Bukit Timah landed class.

My colleague questioned his dad on how his dad's generation has fuxxed-up the whole country...

His dad admitted to the many mistakes they made upon Greece joining the EU in 2001.

With access to cheap credit, Greece went on a spending spree. Both in the public and private sectors.

It was boom time charlie as the Greeks spent USD15 billion for the 2004 Athens Olympics - most of the venue infrastructures are now abandoned or rusting away... 

During my 3 years there from 2009 to 2011, there were announcements to lower the taxes each year. Not that I was complaining. 

Of course the planned tax reductions did not materialise in 2011 and I had to participate in the extra Solidarity Tax (nice name to mean a tax to bail out the country) when the government admitted to EU they had "cooked the books". 

I had to cough up the tax savings I received during 2009 to 2010 - sounds a bit like some Singapore REITs doesn't it?

The retirement age in Greece during 2011 was 57 years young. And for selected class of workers (if you meet the requirements), the retirement age can be as young as 50! 

That's what another of my Greek lady colleague did at age 50 in 2011. She told me she better do so before the rules get changed. Now that's savvy! The berry in my pocket is worth two in the bush.

Of course taxes got raised, pensions got cut as part of the austerity program imposed on to the new Greek government in return for EU bailouts. If you are a German tax payer, would you want to subsidise your Greek neighbour?

During my last months in 2011, suicides there started picking up, soup kitchens sprang out everywhere, and rioting and strikes were common affairs. Entitlements easy to give; hard to take back.

Everyone suffered. But those retired Greeks age 50 and above at least got to enjoy 10 years of generous pension benefits from 2001 to 2011 till the party ended.

Imagine the sense of betrayal if you were in your mid 40s as a Greek during 2001? Now in 2011 they say you must work longer, and by the way, the pension benefits will be a fraction of what were promised by the politicians that are now no longer around...

And if you are in your mid 20s, retirement is far from your consciousness when youth unemployment is more than 50% today. I think you have more pressing issues to focus on.

I will be 47 years young end of this year. The recent CPF thingy don't really affect me. It's a case of heads I win; tails I win.

But if I am 25 this year, I don't think I would be carrying any placards at Hong Lim Park. Even if the rules changed, 30 years is a long time. My queue number is quite a bit far off.

If I withdrew every CPF cents at 55, and come crying back at 60 that I've lost everything to wine, women, and song, would you make it whole to me again? What say you for those 25 years young now?

Don't be so like that lah! 

Weren't you the same one who cried murder when you saw senior citizens collecting cardboard cartons and clearing dishes at food centres?   

Put your money where your mouth is. 

Pay for my 2nd bite of the retirement cherry?

I promise. This will be my last time asking you for bail-outs.


  1. SMOL has finally board the CPF debate bandwagon of the blogger sphere.

    Could it be more generous for the lower income?

    Many many financial bloggers dun give a hoot about CPF, they dun mind status quo, but not many think like this.

    Enagament is also always on the facts, I.e head. Please... So creative marketing guru need to join the PAP

    1. sillyinvestor,

      We believe what we want to believe. I not so sure more facts or more spin will change anything, hence my radio silence on this matter - until now.

      The focus so far is mainly me me me - "I can manage my money better", "it's my money and I can do whatever I damn please", "I don't trust you", etc... Which is valid from a me and everyone for themselves perspective.

      The question comes when I - the prodigal Singaporean son - who takes everything out at 55 and comes back at 60 asking for 2nd bite of the cherry...

      Do we want a society where everyone is for themselves and we let those that failed or made mistakes thrown out on to the street and left hungry?

      If no? Who then pays for my handouts for the next 25 years assuming I live till 85?

      The State?

      Remember! Those who are not working (destitute me again) do not pay taxes nor contribute to CPF once I stop working at 55 when I got my CPF "windfall".

      Those who will be contributing to the State for the next 20-30 years, you better be clear what you want. Your skin is pretty much on the line.

      And those of us near or after 55 that have less and less skin in the game, maybe beside thinking only about ourselves, do spare a thought about the children and grand children that come after us.


      Once upon a time in Singapore (now still practiced in some countries), wages were paid weekly instead of monthly. Guess why?

      Parents with teenage children, how many dare to give your children an annual allowance? How many of you choose weekly or daily allowance over monthly allowance? Why?

      Some grown-ups are still acting like children...

  2. High income earners got cap at $5K per month so not much impact on CPF

    1. CW,

      My focus is not so much on income level since it will be coloured by our social standing in society. The rich will feel they pay too much; the poor will feel the "State" should contribute more...

      If we collectively prefer an everyone for themselves society, then we can probably scrap CPF. Now that's meritocracy at it's finest or what?

      Or do we pool our resources and support those who can't "restraint" themselves. Human nature being so, maybe let's set an example and forgo annual payments to ourselves and opt for weekly allowances?

    2. What can we learn $1 Million gone in one year story?

      Pooling of resources.

      Money gone like that!

      No heart pain?

    3. CW,

      That's why pooling of resources go hand in hand with "weekly allowances".

      Many have read the fable about the man who killed the golden goose; few will realise it's really about us.

      Why so eager to kill the CPF goose just to access all the money at once?

  3. Hi SMOL,

    I like the way you have put it. Echoes my sentiments exactly!

    1. Endrene,

      Thanks ;)

      Wars are fought by young men; the spoils of war are divided by old men.

    2. Old men became wiser after surviving too many of such wars.

    3. CW,

      I asked my emigrating Mainland Chinese colleagues why they want to leave when people like me from outside can't wait to come in to share the China boom?

      Simple math:

      Due to the 1 child policy, 2 young married couple are supporting 4 parents, and that's not counting any surviving grandparents.

      Multiply that nationwide and make a guess what happens when these 2 young couple reach their retirement age in 30 years?

      That's part of the reason those who can will leave...

      I heard Singapore students are good in math too.

      But then what good is math if we agonise over 1% extra interest here, 2% inflation there... When the big elephant in the room is DEMOGRAPHICS.


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