How to retire at least better than with only CPF

For those who are betting on CPF retirement will be in for a shock. Well at the it will only come in like 40 years later. Since it has been viewed as the retirement fund for many, the system has been very protective of it. Currently the system is to allow couple to use the full 100% from their CPF to pay for their first payment for their houses. Very soon, it will decrease to 70%. For me, I find it a step backward instead of forward with this changes.

For many who know, you will be paying 60% worth of the housing you bought just to pay for the interest loan. This can quite clearly explain how so many family have difficulty retiring. So with 100% we have so much problem, 60% will only be more problematic with higher interest rate to pay. On the side note, maybe its a way to force us to get a smaller flat.

Singaporean has always been trying to aim for bigger flat or better location. Think about it, even if there’s capital gain, you still need to lock that profit by moving to another house. So where to live next? My eyes rolled when my friend told me she’s looking for flat in Clementi, which will cost her more than $400k. Sigh good luck to paying more interest. In terms of strategy, the first is always to defend and than attack. Always get something you can afford and save/invest so that after 20 years or so you can upgrade to a bigger one.

Secondly, interest rate will only get lower with the high savings rate of Asian. Sometimes, its quite hard to understand that many just put so much money in their bank to earn the interest rate only to be eaten away by  inflation.

All the other points like lowing of CPF contribution by employer and so on have already been mentioned by this post.

The only way out of this situation is to become more financial savvy. For those who have spare cash may as well put in stocks for capital gain. If not buy those defensive stock that gives high dividend. It will still be much better than getting the interest from bank. Or better, get bank stock. Sure they will pay much higher dividend than account holder right.

CPF as retirement measure

Quite a interesting video on CPF. Individually, I’ve also been thinking hard about managing my finance for retirement despite I’ve just started working for only 6 months. Kudos to singaporenewsalternative and theonlincitizens for sharing. Another post will be up based on my personal observation.

Details on Shield plan

Follow up on my post on types of insurance cover, this post will provide 2 important links to evaluate Shield plan. As all shield plan in Singapore is approved by MOH, you can follow this to get all the plan details. Do follow up the comparison chart for research.

Even after meeting so many insurance agents, I still feel such a n00b. A feeling I don’t quite like. Like what I talk about being responsible in my previous post, it can be quite draining to get to meet up so many times. At the same time, there will still be so many things you will not know since it’s their trade secret. It’s how they make their living. Shrugs.

I think the point is many people realised the importance of insurance and yet do not know how to plan for it. I come to realised that my dad wasn’t his fault to buy so many useless insurance because of the complexity for people to understand what it is. Well except for the part to buy because feel paiseh (bad) to reject relatives.

Glad to get personal advice from a friend to plan backward rather than forward. Well at least I know what i need for now. But a lot more work is to be done.