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Wednesday, 4 February 2015

2 suggestions I like from the CPF Life review panel

1. Option to contribute more into CPF Life to get a bigger payout

This option would come in handy when I reach 55 years young in 8 years' time.

If at 55 I can't find any good parking space (everything overpriced) for my "spare cash", I would very much like this option to increase my CPF Life payout.

I think this may also appeal to cash flow fanatics out there - especially those who are worried sick they may run out of cash during their happy hour years...

Cash flow for Life anyone?

Of course it's not totally risk free. 

Just look at Iceland, Greece, Portugal, Spain, etc. 

And if I am a Jap, I don't think I'll trust the Shogun's promises looking at the way they are trying to debase their currency to banana republic status...

The main consideration for me at 55 would be - political risks.   

2. Option to delay my CPF Life payout at 65 to a later date for bigger payout

If I hesitated at 55, there's another 2nd chance at 65 (I hope).

To those who are healthy and working merrily at 65, wouldn't it be nice to have the option to delay our CPF Life payout to 70 in order to secure a bigger payout for Life?

Works for those who are in great financial health at 65 too!

Imagine after diligently doing dollar cost averaging in a low cost fund for 30 years, you cash out at 65 during a multi-year bullrun! (Please don't ask what happens if I am stuck in a multi-year bear run? You get outta here! Choy!)

Or you sold your HDB apartment for an obscene figure and now has downgraded in glee to a HDB studio apartment. Boo hoo hoo. You poor thing. Downgraded. Now asset light; cash rich!!! (Psst, you'll be super popular at OG Chinatown, and some say in Batam too!)

Just switch landed property to shoe-box apartment if you are in the more exclusive private property club.

The main consideration here for me at 65 will be - would I be lucky? (As in would my financial goals and plans turn out the way I envisioned them decades ago?)

What about my physical and mental health?

Glad you asked!

Look, if I've lost my mental capacity or I'm in a poor physical health, do you think financial matters will be high in my list of priorities?

I rather go with a smile than with clenched fists...

If my maker recalls me home, I'll echo, "Hi! I'm home!"

I rather not bitch, "Why you call me back!? Can't you see I am beeeeeesy???"

With the way some young children are talking back to their parents, I won't be surprised!


  1. i often heard about some people have millions in their CPF cos their pay is very high, is it true?

    if my pay is 10k a month, will my CPF be a million if i reach retirement?

    1. oh by the way, my last check with my wife, she say i have about 20k or 30k in it, or 50k i can't really remember. something like that.

    2. wow haha...

      correcion! just saw my statement, its

      OA - 0.16 (i wonder how like that?)
      SA - 15,528.17
      MA - 12,019.36

    3. coconut,

      The paradox with CPF is:

      The more we desperately need our CPF money back at 55, the more we reveal how bad shape we financially are... (stay at home dads and moms have only love to rely on)

      There's a salary cap for CPF contribution. So even if you high earner, there's only so much CPF you can contribute (I too lazy to check CPF website)... Now who says big daddy is desperate to have our money?

      Looks like you have cleaned out your OA for housing?

    4. looks like it but i don't have much to begin with, i also pay cash for the house so i don't owe anything.

      guess i have to trade til i see the coffin.

    5. coconut,

      I think it would be fun to have an arcade with 80 years young warriors trading their hearts out on 6x32 inches monitors!

      Monitors too small can't read mah!

    6. Hi coconut, how come your SA is only $15.5k? How old are you? The SA value should be in the mid $20-30k for people with some years of working experience.

  2. Hi SMOL,

    I also like the ability to top up and contribute more to CPF life for a bigger payout. Some pple say CPF is riskfree.. I think as you've said, there's political and policy risks involved. With a stroke of a pen, whatever is promised might not be so anymore. It's good to have a strong mountain backing u up, but I prefer to have several small mountains behind me too :)

    I'll have my private backup plan just in case :)

    1. LP,

      Yup, if the CPF Life payout is $2000 per month for Life, it can be a good complement to our private cash flow plans.

      Even out the volatility a bit ;)

  3. At the back of my mind, i always feel majority of Singaporeans still afraid not to back PAPYS because of their money in CPF. i am afraid too what if there is a change and "Old Mother Hubbard Went to the cupboard. To get her poor dog a bone; But when she came there. The cupboard was bare, And so the poor dog had none."
    So why did 40 % still voted against the PAPYS (the last election)?
    Can't think properly lol isn't it !!!???
    And i was one of them.

    1. temperament,

      I think some people have not thought things through deep enough ;)

      I quite like the Party of Hammer and the Men in White.

      First, let's take out the 2/3 majority first before we do anything drastic.

      Baby steps.

      Taiwan and Japan got their test of "regime change" and what happened?

      As an agnostic, I'll rather capitulate and turn my lot with supernatural beings than to trust a politician has my best interests.

      Unless I'm a crony or cadre member of the party in power ;)

  4. It was surreal.

    I blog this post in the late morning about my thoughts and in the afternoon, big daddy announced the 2 suggestions I liked best have been adopted!?


    Another case of blind cat caught dead mice!

  5. SMOL,

    I always wonder, why in religion there are so many choices (OK, once you believe then you will say there is no choice).

    But in retirement we have only 1 choice (or some say no choice at all)? Why not have various non-profit organizations preach different philosophy on retirement scheme and people can choose which one they want to join...
    Some will promise you heaven at 65.
    Some will tell you save nothing and spend like there's no tomorrow.

    1. ckw-I99,

      There's always choices ;)

      OK, some religions must be careful for once entered; cannot leave - punishment is not just death; but eternal hell... Now that's hatred or what!?

      Back to retirement, phew!

      I have a Swedish colleague who left Sweden because he can't stand paying for the loafer neighbour of his through high taxes - he came to Middle East and then settled in Asia. "Free" cradle to grave system does not appeal to him.

      When I was away for 7 years, I did not contribute a cent to CPF. Discovered a new system called company pension.

      I guess for self-employed, less freedom but you do have a choice on how much to voluntary contribute.

      We have Malaysians, Indonesians, Indians, Mainland Chinese friends who have decided to earn their living in Singapore. Many angmoh love our low taxes too!

      And with our stronger exchange rate, retiring in Penang or JB is not that far fetch. You think why I am picking up Malay from my Malay colleagues?

      Sometimes in life, if the mountain don't move; we move.

      Unless you consider yourself a vegetable; vegetable can't move.


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