Cannot invest CPF money????
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Read in today's straits times about the changes being made to CPF.
One of it being that the first $60,000 from CPF (all accounts combined) cannot be used for any kind of investment. (meaning no CPFIS, no shares , no ETFs ect).
Does anyone here know anything more about this rule cos the papers didnt mention anything else.
In particular,
1. how exactly is this amount calculated (eg 40,000 from OA, 20,000 from SA)?
2. what if i already have invested my CPF money and the remaining amount does not add up to the 60,000? Will i need to liquidate my investments to meet the $60,000?
Any info would be appreciated. -
Isn't it good thats is now 3.5%?
many CPF linked investments like unit trusts all are loss making or cnt even match 2.5% interest p.a.
other option is shares, but also high risk -
Isn't it good thats is now 3.5%?
First of all 3.5% is not a lot. After you factor in inflation of, say 2%, you are just left with only 1.5%. I do agree that it comes risk free but still its a measly amount if you consider how expensive Singapore is getting every day.
many CPF linked investments like unit trusts all are loss making or cnt even match 2.5% interest p.a.
other option is shares, but also high risk
To answer your second concern that unit trusts are losing money and can't match the current 2.5%, i would just say this, if you carefully plan your investments for LONG TERM, do your research & home work, and most importantly stick with your plan, its quite easy to achieve returns far superior to the OA return of 3.5%.
Do not get carried away by what your investment "adviser" tells you. Do not just rely on investment companies to "choose" unit trusts for you. Most of the time they are only interested in making money for themselves and you will end up with an opinion that "unit trusts cant even match 2.5% interest p.a" -
The very next moment you sell your share, they will take back whatever your account needed. I experienced this after I throw some of my stock recently. So it's either you don't throw or you get ready to be out of market. -
So far... all my unit trusts are making good $$$ far better than bearing of interests in CPF!!! They got no right to stop me!!! Fart them all!!!
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Ah..a sign that PAP's coffers is running low
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WTF???Originally posted by fox_hound_33:Read in today's straits times about the changes being made to CPF.
One of it being that the first $60,000 from CPF (all accounts combined) cannot be used for any kind of investment. (meaning no CPFIS, no shares , no ETFs ect).
Does anyone here know anything more about this rule cos the papers didnt mention anything else.
In particular,
1. how exactly is this amount calculated (eg 40,000 from OA, 20,000 from SA)?
2. what if i already have invested my CPF money and the remaining amount does not add up to the 60,000? Will i need to liquidate my investments to meet the $60,000?
Any info would be appreciated.
First $60K cannot make any investments?
Then we cannot make average returns from Stocks, only can take their measly 4%?
WTF!!!! -
The average annual return in the US stock market from 1990 to 1999 is 18%.
US Stock Market Average Annual Return
Now they pay CPF members 4%, means they pocket the other 14% (18%-4%).
I think they should pay us the somewhere near the average returns in the Singapore stock market, I think that would be fair.
They used our low interest funds, invest some stock market, then give us measly 4% while they pocket the 14%. -
We had been taken as a fool.Originally posted by maurizio13:The average annual return in the US stock market from 1990 to 1999 is 18%.
US Stock Market Average Annual Return
Now they pay CPF members 4%, means they pocket the other 14% (18%-4%).
I think they should pay us the somewhere near the average returns in the Singapore stock market, I think that would be fair.
They used our low interest funds, invest some stock market, then give us measly 4% while they pocket the 14%. -
The very next moment you sell your share, they will take back whatever your account needed. I experienced this after I throw some of my stock recently. So it's either you don't throw or you get ready to be out of market.
@king108
when did you sell your investments and how exactly did they take it away? Are you telling me that this "$60,000 cannot invest" rule has been already implemented? If so, i will be damned. i was planning to buy a couple of thousands worth of funds from my OA. I am hoping it will take them some time to actually implement the rule. -
Let's distill this simply. We all know the Govt uses our funds for something one way or another, so why would it give any of it back to us? Obviously they want to use it for themselves, whether or not for our benefit or not.
Either that, or the Govt is pulling a fast one on us. -
I wont be surprise... after all beside those P4P, only god knows where the CPF $$ gone to...Originally posted by ceecookie:Ah..a sign that PAP's coffers is running low -
the rules keep changing i bet a lot of people are confused.
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well said. OA funds avg returned 9.71%paOriginally posted by fox_hound_33:First of all 3.5% is not a lot. After you factor in inflation of, say 2%, you are just left with only 1.5%. I do agree that it comes risk free but still its a measly amount if you consider how expensive Singapore is getting every day.
To answer your second concern that unit trusts are losing money and can't match the current 2.5%, i would just say this, if you carefully plan your investments for LONG TERM, do your research & home work, and most importantly stick with your plan, its quite easy to achieve returns far superior to the OA return of 3.5%.
Do not get carried away by what your investment "adviser" tells you. Do not just rely on investment companies to "choose" unit trusts for you. Most of the time they are only interested in making money for themselves and you will end up with an opinion that "unit trusts cant even match 2.5% interest p.a" -
maybe you ppick the wrong one, or your consultant helped you pick the wrong one.Originally posted by 105090:Isn't it good thats is now 3.5%?
many CPF linked investments like unit trusts all are loss making or cnt even match 2.5% interest p.a.
other option is shares, but also high risk -
if interest rate can be 3.5%.... tat means inflation is keeping up....
dun be too happy... the actual rate is more than wad is reported... -
I mentioned in a previous posts that many among our current generation can surely manage their finances and get better returns for ourselves with regards to the new CPF 3.5%.Originally posted by Fingolfin_Noldor:Let's distill this simply. We all know the Govt uses our funds for something one way or another, so why would it give any of it back to us? Obviously they want to use it for themselves, whether or not for our benefit or not.
Either that, or the Govt is pulling a fast one on us.
Granted this percentile is far greater than any bank currently available, however this appreciation of the prevailing interest rates is long overdue. It is probably in their best interest to improve the rates, either because the govt's own investments have not been doing well and they need to replenish their coffers, or foreign banks are offering more competitve perks that undermine their stagnant policies and they have no choice but to up the interest rates for CPF to remain relevant.
Either way, inflation is fast overtaking the ability for CPF to keep up. The choice to invest or withdraw CFP savings past the original age of 65 should be left to the individual, and not a govt doctrine. -
Well, use the money to buy freehold property, at least can pass to your kids.
Use all your CPF since u cannot take it out, don't use cash to pay even if u have it.
Use the spare cash to invest in blue chips or insurance. -
They will be even harder pressed, if the near 5% interest rate savings accounts which are getting more popular in the US comes to Singapore (I heard a foreign bank here is offering it now though I'm not sure). Just imagine banks offering these rates and our CPF is earning much less. I wonder what the Government will say to that.Originally posted by BillyBong:I mentioned in a previous posts that many among our current generation can surely manage their finances and get better returns for ourselves with regards to the new CPF 3.5%.
Granted this percentile is far greater than any bank currently available, however this appreciation of the prevailing interest rates is long overdue. It is probably in their best interest to improve the rates, either because the govt's own investments have not been doing well and they need to replenish their coffers, or foreign banks are offering more competitve perks that undermine their stagnant policies and they have no choice but to up the interest rates for CPF to remain relevant.
Either way, inflation is fast overtaking the ability for CPF to keep up. The choice to invest or withdraw CFP savings past the original age of 65 should be left to the individual, and not a govt doctrine.
But the Govt has always taken the nanny way, and it still is. For all the talk of loosening, quite frankly the reluctance to release its hold on this key important bastion of control makes it clear the Govt has other uses for it. -
Shouldn't this be optional only? Compulsory hah??
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Guys, just got this info from a friend of mine who works in the investment line. According to her the CPF board does not confirm this new rule(meaning officially the rule has not YET been brought into practice), however they will be making an official announcement some time in September during which they might implement this rule.
I have a heavy hunch that this rule will be made official since it was mentioned in the papers right after the recent PM speech. So for those of you who are thinking of buying some shares or unit trusts do so quickly, I did!!! -
not sure about the percentage from the various cpf accounts but don't think we'll force you to liquidate your investments to meet the $60,000.Originally posted by fox_hound_33:Read in today's straits times about the changes being made to CPF.
One of it being that the first $60,000 from CPF (all accounts combined) cannot be used for any kind of investment. (meaning no CPFIS, no shares , no ETFs ect).
Does anyone here know anything more about this rule cos the papers didnt mention anything else.
In particular,
1. how exactly is this amount calculated (eg 40,000 from OA, 20,000 from SA)?
2. what if i already have invested my CPF money and the remaining amount does not add up to the 60,000? Will i need to liquidate my investments to meet the $60,000?
Any info would be appreciated. -
http://www.petitiononline.com/annuity/petition.html
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Originally posted by 105090:
Isn't it good thats is now 3.5%?
many CPF linked investments like unit trusts all are loss making or cnt even match 2.5% interest p.a.
ot 7768.1
Unanswered questions about CPF changes
By Leong Sze Hian
Posted by theonlinecitizen on August 24th, 2007
This is in reference to media reports that the CPF Special, Retirement and Medisave accounts' rates will be modified next year.
The question that may be in every Singaporean's mind is whether the peg to "an appropriate long term bond rate" may result in a higher or lower average rate, compared to the 4 per cent fixed rate now?
Channelnewsasia reported Manpower Minister Ng Eng Hen as saying:
"Â… the new rates will be lower initially than the current rate of 4 percent but it should do better than 4 percent over time." (link)
What is the basis for the statement that "the new rates will be lower initially than the current 4 per cent but it should do better than 4 per cent over time"?
Bonds fluctuate and are dependent on various factors like interest rates, default risks, etc,and have no correlation to the future "should do better" than the present.
The only answer to this question is nobody knows.
[b]Since "the new rates will be lower initially than the current rate of 4 percent but it should do better than 4 percent over time", why not wait until the new rate is better before un-pegging it?
Why give 1 per cent more on the first $60,000 in CPF, and then announce two days later, that the 4 per cent rate will no longer be guaranteed?
Most Singaporeans may not benefit
Since most Singaporeans use the bulk of their CPF for housing in the early years of their working lives, many may only enjoy the extra 1 per cent on very small CPF balances. In contrast, as the Special, Medisave and Retirement accounts cannot be used for housing, most Singaporeans may have much larger balances, which may end up earning less than 4 per cent.
I would like to ask how much of the average of about $45,000 in CPF members' accounts are in the three accounts affected, compared to the balances that are able to earn the extra 1 per cent?
Has any study been done to estimate the net effect on CPF members?
Will some or most Singaporeans be better or worse off?
Contradiction
As to "the one per cent additional bonus interest for the CPF will be put into the Special account and not the Ordinary account" (as) "this additional bonus will enhance the CPF's existing risk-free framework", (CNA) I find this to be somewhat contradictory, because isn't removing the 4 per cent fixed rate increasing the risks of "the CPF's existing risk-free framework" much more than the small sums from the bonus interest?
Pooling of risks?
With regards to every CPF member having to set aside a compulsory amount from their Minimum Sum, as a pooling of risks, so that those who are alive after age 85 will be able to receive a monthly annuity for life of between $250 to $300, I believe Singapore may have achieved another world first and history first.
We are the first and only nation to compulsorily have all citizens contribute towards providing for the annuity payouts of those who live longer.
Those who die before age 85 may receive little or no benefits from the compulsory annuity scheme, as is being proposed now.
In any case, I think it may be quite difficult for anyone to live on just $250 to $300, from age 85 and beyond.
As the compulsory annuity will only apply to those below 50 years old now, the first annuity payout at age 85 will be in 2042. Assuming 1.5 per cent inflation, the $250 to $300 monthly annuity, is equivalent to $149 to $178 today.
Wasn't raising the GST supposed to help the poor?
As we have more than $250 billion in Temasek and the Government Investment Corporation, why are Singaporeans being required to pay for those who live beyond age 85?
As the reason given to raise GST was to help the poor, isn't the additional estimated annual $1.5 billion revenue enough to provide for Singaporeans who are over age 85 and destitute?
Since the economy is expected to grow at 4 to 6 per cent in future years, to what extent will the increasing GST revenue be able to provide for the increasing over 85 destitutes' aging population?
One of the key focus of the the Prime Minister's National Day Rally speech, was reducing the income gap.
As one gets older, earnings tend to decline?
According to the Ministry of Manpower, for workers aged 55 and above, 18,600 earn gross monthly income of under $500, 64,000 earn less than $1,000, and 46,400 earn below $1,500. This means that 42 per cent of elderly workers earn less than $1,000.
The statistics indicate that the older one gets, the larger is the proportion who earn less. For example, those earning less than $500 and $1,000, jumped from 8,600 and 36,600 to 18,600 and 64,000, respectively, from age 50-54 to age 55 and above.
This means that those who crossed from age 50-54 to age 55 and above, who earned less than $500 and $1,000, increased by 116 and 75 per cent respectively.
Why is it that it would appear that as one gets older, earnings tend to decline?
How long has this trend been persistent?
Two policies affecting older workers
The proportion of older workers who are in menial jobs is quite high. 54,300 age 55 and above workers are cleaners, labourers and related workers, and 35,600 are plant and machine operators and assemblers. About 49 per cent of workers aged 65 and older are cleaners, labourers and production line operators.
For these lower-income elderly Singaporeans, two policy changes may affect them more adversely, than the general population.
The first, is the gradual phase-out of the 50 per cent CPF Minimum Sum (MS) withdrawal starting 1 January 2008. From 2013, those with less than the then prevailing MS of $120,000 at age 55, can only withdraw $5,000.
The second, is the compulsory purchase of a deferred to age 85 life annuity, with the premiums deducted from the MS. This will reduce the monthly MS payout from age 65 to 85.
I would like to suggest that the above policies be reviewed, perhaps along the lines of Workfare, that is to help to increase the ultimate total disposable income of older lower-income Singaporean workers.
The reduction in CPF cash-flows due to these two changes, may further strain their meagre income sources, after age 55.
Minimum Sum
The above CPF cash-flow issue is perhaps exasperated by the CPF Board's statistics that "The percentage of active members who met the required MS when they turned 55 declined from 57.1% in 1996 to 36.4% in 2006Â… The proportion of members aged 55 years and above displayed a four-fold jump from 5.5% in 1985 to 22.9% in 2005″.
The MS which started in 1987 has increased by 232 per cent from $30,000 to $99,600 now. This is an annual compound rate of increase of 6.2 per cent.
To what extent has the 6.2 per cent rate of increase, relative to inflation of only 2 per cent, contributed to the CPF cash-flow woes and corresponding total disposable income of lower-income Singaporeans when they cross age 55?
Also, to what extent will the one per cent increase in CPF interest rate, one-off CPF bonus for those affected, and higher workfare for older workers, offset the reduced CPF cash-flow sources described above, in the light of the increasing trend of more elderly Singaporeans in menial jobs earning less wages?
her option is shares, but also high risk[/b] -
Come on... this is just another U-turn on the policies thought out by out ultra-smart, ultra-high pay ministers.
When they opened up the CPF for investment, they forgot the fact that not many citizens are financially savvy. The idea started off as a good one to increase the CPF savings but too bad, it wasn't well thought off.
A reflection of how out of touch our ministers are.
When the idea was first introduced, my friends and I in the financial market already fret at the thought of many aunties and uncles rushing into the market without a single clue on what they should or should not buy.
It's just like when the stocks are doing well and people are buying for the sake of buying... only to be the biggest losers of all.
The best of the breed my ass... like what MM Lee said, they are well qualified, just that they are not tested... simply put; these people are smart people with zero field experience. Particularly the type you'll avoid following into battles.