[This article was written by Ryan Ong, and first appeared in SingSaver.com.sg] Love it or hate it, CPF is part of being Singaporean. Some of us don’t like the forced savings, while others feel it’s a great idea. But amid the constant arguments, some common myths have emerged. Here are some of the most common ones you may have heard of:
As a Certified Financial Planner™, whenever I even mention the word “investment”, people are way too eager to ask about “stocks/equities”, “bonds”, and “funds/unit trusts”, thinking that these are the best, sure-fire ways to financial security and financial freedom. But they are always surprised when I instead mentioned CPF. Although most people think CPF is a retirement tool, I’d like to think of CPF as an investment tool. What other investment is low-risk (or virtually no-risk) and has a guaranteed return of 2.5% up to 6%? What other investment is inflation-adjusted, commission-free, out of reach by creditors, and has an annuity payout that you cannot outlive? To learn more about CPF, please visit the CPF website. (more…)
It seems that everywhere you look, there’s some guy hosting a free seminar who’s going to tell you secrets on how to pick winning stocks. Sometimes these talks are hosted by financial services companies like RHBInvest and Phillip Capital. Or, they are given by notable “experts” in the field, like Mark Lin and Nicholas Tan. Other seminars are held by financial education companies, like Wealth Mentors, where much of what they teach could be found in a good book (free, from the library).
As a former financial educator who was not tied to an investment company or to selling certain products (and therefore, I had absolutely no conflicts of interest), I can honestly say that for the vast majority of people, these seminars won’t benefit them. They will mainly benefit the organiser(s). So what should these people invest in? (more…)
I recently attended a focus group discussion on various aspects of CPF. These included the minimum sum scheme, how much one needs for retirement, how much of a part should CPF play in retirement, the possibility of a partial lump sum withdrawal, and different considerations on the life annuity payouts. My discussion group was very diverse. There were people in their mid-20s, who have just started their careers, and retirees who were in their early-70s. These are my insights and take-away points from the discussion: (more…)
When Prime Minister Lee Hsien Loong listed the various ways in which a “cash poor” senior can get extra income from his/her home in retirement, he said, “It is better if you keep your property. Even if you rent out the whole flat. It does not matter, it is yours. And you can fall back on it for your old age, just in case anything happens.” Here’s why I disagree, and why I think selling then renting is a viable option. (more…)