I searched on the net, interesting comment.
The Big Truth about CPF Annuity
LKY- We don't want to see you in 20 years time at the meet the
people session and complaint that you got no money to eat.
Then we will probably give your food stamp...
That is the grant scheme of things.
In 2001, PAP knew that more than 50% of people don't even have
the mimium sum when they reach 55. They are worried.
They stop people from taking out the money and at same time
increase the minimum sum so that chances of taking out is almost
zero at 55.(for the poor)
They increase the minimun sum to $120,00 by 2013 and they knew
that again more thant 50% cannot match that sum at 55.
2008 Annity scheme, the objective is that most people who live
until 85 can have something $600.... and got no reason to see the
government for food stampo
So that how it work.
To earn interest on your CPF, someone have to borrow the CPF
money and invest something that is at least higher than 2.5%.
That someone is GIC or various government agencies.
The CPF board buy government bond and earn the interest in order
to pay you.
So, Dr Ng at first said No and then said the relationship is not
simple. The truth is Yes.
Now how do earn interest with the pool of money for the
annuity.
the trick is the same. THe pool has to be big enought, so that
any big distortion payout along the way can be smoothen out. That's
why it must be complusory!
The money will be invested on the government bond again and earn
a low interest of 3%. by the way there is no mention of rate of
return in the CPF
annuity schemes.
the CPF annuity is very clear give you a choice to choose, at
65, 70 75, 80, 85, 90
with payback or no payback when you goes to heaven!
You have to choose at 55, but you cannot get it until 65
earliest. So that 10 good years of your money is pooling inside to
fun the payout. Ha ha 10 years, go and buy the savest bond in
singapoe or dividend yield from good company SPH, you get at least
3 to 5%. Go and count yourself, you lost at least 50% of capital
appreication on your money compounded from premium
So how do you choose?
Now, let say you are OK fellow, work 30 years in your life
middle income, at 55 got 135K in the minimum sum.
Hint from LKY
1. check you family history, your anuty, uncle, how long they live,
die of what illness?
2. Estimate what is your likely hood of your Life expectancy. If it
is below 65
Choose 90, minimum premium committed is (4%)annuity and the rest
return to your family if you die before 65.
But you contribute 10 good years of money to the pool for
investment.
2. If you expect to leave until 80, Choose 65 and get your money
fast but you pay a high premium.
3. If you father/mother, uncle and auntie are at least 90 years
old and you live a healthy lifestyle, choose 65 and pay maximum
premium ,get maximum payout from annuity account every month.
4. From 85 to 90, not many people are sane?
Finally, if you follow what Dr NG said, well I have not think
about it, you know most Singaporean are lazy, I will leave it at
default 80, ha ha good luck to you.
Dr Ng is rich, Cancer surgeon before and minister for at least
another 10 years. He don't need this annuity.
The truth is most people die at 75 to 85. you get nothing before
80, you are not only lazy but also stupid!
So the Default is 80, ha ha for the lazy and stupid.
If what the newspaper said that the scheme is easy to understand
and it only takes 3 to 5 minutes to explain to the layman(security
guard, delivery man) than I am sure this people will choose 80
default.
CPF hopes many people choose 80 because that is the best
outcome.
why, A big pool of money to invest for next 25 years and then
the majority of the payee will die at that age. No refund is even
better.
Whan happen when everybody choose 90, no refund. The is scheme
will work but the people can go and see the MP when their money in
the retirement account is depleted.
MP will give you food stamp! from 85 to 90 years old.
What if everyone choose 65, it is a big responsibilites for the
CPF, if everyone live until 90. (that will never happen!)
So my prediction for the next ten years
GST will raise to 10% as they attempt to reduce the personal
income and company tax down.
ERP will be paid as you move the car from your house.
Mimimum Sum will be raised along with inflation and again
>50% can never make it.
The govenment will raise the retirement age to 65 or even 70 to
make sure as long you work and don't need to give food stamp.
The Mean Test by Mr Khaw will be refined and expanded to make it
even More Mean?
Guess what all this they will do it after election and before
election a lot of goodies......
Collect $2 return $1 and collect again another $2 and return
$1......
Bao Chiak---Dr NG said about the CPF annuity scheme. ya ya where
got bao Chiak
Posted by limcy | February 25, 2008 12:44
AM
