10/18/2013

Affordable has destroyed our retirement plans

SG+ is a new programme very similar to Talking Point. Last week’s topic was about CPF and whether Sinkies have sufficient money left for retirement. After the two experts gone through with Melanie, the host, it was a glaring admission that many Sinkies will be in deep shit when they retire. The only hope to survive those greying years is to downgrade their homes, provided they have one and is down gradable.
 

The two were talking about having more savings and more schemes to bolster the existing schemes which would not be enough due to high inflation and the huge amount of money sucked into housing and medical insurance. The recommendations are something like another CPF to cover for the shortfalls in the current CPF and more insurance schemes to cover for the inadequate schemes that the people are paying now. 

The assumption is that the people have a lot of spare cash to pay and save. My ballpark figure to ensure that these people have enough to retire, to live well and to pay for their medical is to save 70% of their current income. Madness is another word.
Don’t blame the recommendations or the experts. Basically our retirement savings through the CPF are screwed. Despite being one of the biggest savers in the world, we don’t have enough for retirement. No joking. If the planners would have their full proof schemes, everyone must earn 3 times what they are earning today or save 2/3 of their incomes if they want to be safe.
 

What went wrong? Affordable is the word. By declaring everything is affordable or priced to be affordable, the savings of everyone is at risk, to be just enough for the day, for all the schemes, including housing and medical but somehow retirement was forgotten. They computed everything to be affordable, ‘gum gum ho’, and nothing left for retirement.
 

How did it start? It goes back many years ago when housing was priced to one income and to be paid off by 15 years. At this kind of affordability, many people’s savings started to grow. They genuinely smiled when they looked at their CPF statements, I mean the average workers. They would have paid up their housing loans and started to save everything they put into their CPF. And better still, if the spouse is also working, the whole CPF contribution would be in the CPF, and growing at 4 to 6% pa.
 

Then someone must have noticed the big and bigger savings in the people’s CPF. Heheh, they got plenty of money. Public housing prices must be made affordable to these people. They can afford to pay more. The prices became affordable for one income from 15 years to 25 years. Still got a lot of money leh. Make it even more affordable, with two incomes and 25 years. And then even more affordable to stretch it to 30 years or more. They called it market pricing or market subsidy or something like that, but very affordable.
 

Today, the first 30 years of CPF contributions by both spouses would be just enough for the affordable public housing. The real savings will come after 30 years of working, when both are about to retire or already retired. How to have enough for retirement? And there are the minimum sums to set aside, and now another great scheme, the Medishield Life is going to make retirement a less stressful time without the fear of big medical bill, but would tax on whatever is available in the CPF. The premium sure affordable, to who?

20 comments:

Anonymous said...

in this very uncertain and cruel world, we must be DEBT-free or at least DEBT-low....

simple living is the way going forward.....this will ensure you and your family live a stress-free or at least less stress life....

not only the expensive house you got to pay...how about other endless commitments.... such as high medical fees, expensive education and tuitions, high cost of living, retrenchment, salary freeze, etc etc etc....

don't join the crowds.....

my friends...listen to me .....simple living is the only way going forward.....ha ha ha.....cheers.....

Anonymous said...

@ RB: Today, the first 30 years of CPF contributions by both spouses would be just enough for the affordable public housing. The real savings will come after 30 years of working, when both are about to retire or already retired. How to have enough for retirement?


RB, must move with the world mah! Super talents say one! Now new normal liao lo: 30 years old - 60 years old, cpf saving pay affordable housing because both husband and wife can afford mah! Super talents definition what - affordable housing means both couple can afford pay for 30 years until 60 years old.

Affordable retirement: 60 years old - 80 years old still working cpf saving for retirement.

Affordable living: 81 years old to 91 years old work in food courts clear plates/ bowls/ cups/ soiled tissue papers, left over chicken bones, fish bones, etc etc.

See!

Sinkieland everything plan swee swee. Where got problem? Super talents paid millions too much meh? "Peanuts only lah", scoffed Mrs Peanut.

sgcynic said...

When couples use up their CPF to pay for their affordable HDB loans, they are screwed twice - not only do they only get to save only late in life, they also lose from from their inability to accumulate savings from interest compounding. In addition, they have to budget and pay for annual affordable "adjustments" in fares, fees, bills...

Anonymous said...

The real savings will come after 30 years of working, when both are about to retire or already retired. How to have enough for retirement?
RB

Of course not 100% of Sinkies will have enough for retirement lah.

But if only 60% have enough and more, and hence happy and satisfied to vote PAP, it is very good already.

So Sinkies, get real. There is no such thing as 100% or a perfect world.


Anonymous said...

RB, u forgot about net Hapiness that count according to woody. So there is no such thing as absolute Hapiness only
Net Hapiness so if net Hapiness 60% are happy then sorry hor for the other 40% lor. Correct or not, u tell me lar, knn Tio Bo?

TongBuayTiow Papayaya said...

@ 11.58 am
[[[ But if only 60% have enough and more, and hence happy and satisfied to vote PAP, it is very good already.

So Sinkies, get real. There is no such thing as 100% or a perfect world. ]]]


anon 11.58 am, what if only 43% or less have enough only, what will happen? And this percentage get smaller and smaller each passing month?

Are you Co-k-sure realistically 60% or more Sinkies would have enough in their retirement funds?

Didn't you watch any TV programme or read up survey or statistics published? Or you are one of those equally blind and deaf TOADLETS who just follow the self-proclaimed blind and deaf TOADS BLINDLY AND DUMBLY???

Anonymous said...

Are you Co-k-sure realistically 60% or more Sinkies would have enough in their retirement funds?
TongBuayTiow Papayaya 12:56 pm

I may not but I think PAP is Co-k-sure lah.

U know why? Because from IRAS, PAP know how many earn big bucks. From CPF, they know how many got enough.

That's why PAP no worry one. They got all the data, so they know majority are happy and satisfied because they got money enough. And confirmed by 60% every election.

U mean U, I or RB know the data better than PAP meh?

Anonymous said...

Of course PAP know something that most Sinkies and netizens don't know.

Or else how can PAP be in power for so long if they don't know, tio bo?

Anonymous said...

@ 1.47 pm: /Of course PAP know something that most Sinkies and netizens don't know.

Or else how can PAP be in power for so long if they don't know, tio bo?/


Tiok!

Tiok! Tiok! Tiok!

No need "fight" liao.

Election time come PAP put up all their WHITE FLAGS WITH LIGHTNING, oppo just put up white flags CAN LIAO ! TOTAL CAPITULATION!

Before rallies start even nomination day also all carry plain empty white flags can liao! All join in shout "PAP! PAP!"

Like that can?

No need fight mah!

Might as well capitulate on nomination day!

Our grandmaster also happy can fully totally retire! PM Lee also happy, with his mouth smile until touching both ears.

Good idea?

Nomination day all carry white plain empty flags except PAP of course carry lightning flags lah!

Laggi good all also wear white on white oppo also sappork ruling party, UNIQUELY SINGAPORE mah! Tiok Bor?

Happy liao hor?

Anonymous said...

30 years to pay for housing and the rest of your life to pay for Medishield Life.

b said...

All these wayangs and singsongs are to squeeze out more from the people. Will the daft voters still believe in entrusting the country to a bunch of wolves? Can only find out in GE2016.

Anonymous said...

Long long time ago, the chief said to us, if you save 200k you're safe for your retirement, then it became 400k and then now by gods will, a million, with housing more expensive than gold, you'll be lucky if you own one if not, then 300 to 350k gone to that house, because with our yuppy generation, its better to live on your own, and with the blessing of odin, if you'll fit and die fit, then ok, no problem, if not then another 300 or 400k gone.

Even when you leave alone you have your bills which can come to a few hundreds, adding all that up, you'll be lucky if you have 200k left, that's provided you have a financial plan, an insurance etc, if not you'll almost screwed.

So, my friends, do you have that million and is that enough??, if not, the alernative other than farting your comments here, which only a couple of hundred of ppl if all goes well, reads. Dying young isn't all that bad.

Kaki

Anonymous said...

Affordable did not destroy my retirement plans.
Lousy PAP government policies destroyed my retirement plans.

Anonymous said...

Old grand master more often than not gets the outcome he wants, arguably including GE 2011. Next GE may not be any different. Look at AGRC, TPGRC, BTPYGRC, MGRC etc. 2nd G all gone. Look at those helm by 3rd G. Mostly 65% - 70% sappork. He is the Grand Master not for nothing. Want to take him on? Good luck to you. Be prepared next GE likely not the outcome hoped for by some oldies in Sinkieland but most probably what grand master envisaged is the best. So while given and having the chance to kpkb here, be prepared that affordable retirement is in your own hands. There are many Sinkies ( probably > 50% ) having or likely going to have reasonably comfortable retirement. Ha ha ha, RB is one of them isn't it? Though he kpkb most of the time in a sublime way a lot here, you didn't see him scavenging rubbish dump for discarded card boxes and drink cans? You didn't see him pushing a rusty, going to fall apart cart full of card boxes in the vicinity of MBFC, MBS, Marina Residences, Asia Square, Marina Boulevard etc, did you? But you still see him going around in leisure taking arguably more than professional standard photos. Otherwise, he is sitting in the mid floor comfort of a grand tower in MBFC in full aircon and arguably 5 or 6 star renovated office environment with a good view to boot. Kpkb to fart extra steam can but don't have high hope for revolutionary change in next GE.

Chua Chin Leng aka redbean said...

Heheh, before I start to rummage through the bins for cans and leftovers, I will post a pic of the view from my window, a million dollar view from MBFC when every other person you met is a foreigner, or more.

Anonymous said...

@ RB: " Heheh, before I start to rummage through the bins for cans and leftovers, I will post a pic of the view from my window, a million dollar view from MBFC when every other person you met is a foreigner, or more. "


RB, they say a photo speaks a thousand words. The Chinese has a saying: “ 百闻不如一见 ”!

For our continued "buying of kopi" for you, it is for the road side stories that you help keep the sinkies' spirits going and daily lives enlivened! And maybe the "common understanding and empathy" that may evolve from all these "interactions".

Awaiting with patience the various "million dollars views" to "educate" the masses.

Anyway, whether many Sinkies economics, banking and finance, business management, accounting, legal, IT ..... etc talents are not well represented in arguably one of the "most sinful parts of SinCity" if not the most, is due to employment discrimination, unfair HR practices/ favouritism or their disdain and scorn for such materialistic, "mad", "decadent", "immoral", "greedy" ...... etc culture and working environment widely pervasive or a combination of both shall be KIV for future "juicy" discussions if you were to start a thread .....

Whatever it is, it shall not stop our "continued unwavering support to buy you kopi" for your insightful, analytical and entertaining and at times riveting and nail biting road side stories ......

heh heh heh ......

Cheers :)))))))

Chua Chin Leng aka redbean said...

Thank you, and please be very generous with OPM and buy me more kopi. It is always easier when it is other people's money. I guarantee you that you need not spend a cent for being generous: )

The thread you are asking for is in Xenophobia frenzy above.

Ⓜatilah $ingapura⚠️ said...

Please lah. Stop the hypocrisy.

Decades ago the govt already said CPF alone is not enough for retirement so they allowed certain leeway for investment and buying of property. They also encouraged Singaporeans to take out insurance policies -- and many people have such plans.

The CPF is a Ponzi-Tax Scheme used as a political tool to manipulate people. If you haven't noticed that by now you deserve a lesson in REALITY, you dumb motherfuckers.

Get real lah.

Anonymous said...

RB, with such a trashy commentator littering your blog big time with loads of rubbish, I believe some if not many readers are put off coming to your blog

Ⓜatilah $ingapura⚠️ said...

@622:

By the rotting scrotum of Chezus Chrust....wow, since when did you become spokesperson for internet readers?

Pssst...just because you BELIEVE something, don't make it true.

You're welcome. Always happy to enlighten ;-)