Its amazing isn’t it?
One would expect questions on CPF Life Plans to come from financially illiterate people or those not very into DIY investing or trading – not those from our community of financial freedom seekers…
I mean if one can’t make an independent decision ourselves, it sort of brings into question our abilities to practice active DIY retail investing and trading, doesn’t it?
Half the readers will leave in a huff now.
Good. Now that I’ve filtered out the freeloaders, lets move on…
I come with foreplay; I’m the man with the slow hands.
Its all our fault
Remember a time when seniors before us can withdraw their CPF savings at age 55 pronto without ifs and buts?
That worked well for the majority of seniors at that time were quite “obedient” in selling salted eggs at around age 65 – more or less exactly as what the actuarial science has predicted.
Then something went horrifying not according to plan…
People started living longer than “forecasted”.
CPF savings that were “enough” suddenly became woefully inadequate…
Make a wild guess who is the party most concerned with everyone doing an Oliver Twist act and begged, “Sir, can I have more?”
Hence, the start of the “crash got sound” era of constantly moving goal posts.
But that came at a political cost…
Surely we can’t move the goal posts indefinitely!?
I do like our CPF system.
When I were in Athens, Greece, I had the opportunity to witness how the pension system can be ponzi scheme like – those who collected the pension benefits early are better off than those who collect much later.
The Greek senior who retired 20 years earlier had the consolation he got 20 years of full pension benefits in contrast to that poor soul who just retired when the Greek economy blew up – and found out his “promised” pension is now cut by half…
Similarly, some cities and states in the US are near bankrupt… Would you like to be the young working adult contributing to social services to fund the generous pensions promised to seniors ahead of you? And knowing the kitty is pretty much empty when its your turn to collect?
How about those rapidly aging countries like Japan, China (due to the one child policy), and Western Europe? I suspect when their pension systems were designed, it has 5 working adults (or more) supporting 1 retiree; not 1 working adult supporting 5 retirees…
No. I like our CPF system much better!
Our monies are clearly compartmentalised. My money is my money; its not mixed with my neighbour’s. If my neighbour blew his money on wine, women, and song, that’s his business! I’m not subsidising his indulgences!
Spreading the Risk
You show me yours; and I show you mine
If you game enough, it would be fun to hear what’s your chosen plan, or what you intend to choose when you reach age 65.
Of course I’ll show my choice and reveal my reasons why in my part 2 post.
Singapore Man of Leisure (welcome to my blog; just google it!)