CPF & Medisave minimum sums
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MMM:
Exactly. It's all personal choice. Nothing shameful about it. I hope this thread doesn't die like the 'in-laws\" one did. :siam:
Pls lah, 3boys. You are getting emo. No one is saying that one shouldn't work past 55 and of course it is not a shameful thing to do. Alot of people around us who are past 55 are still working... Is it a rare thing??? Of course not. Some is by choice while some don't have a choice.3Boys:
Is it shameful? Is it disgusting that one has to work at that age for financial reasons and not out of 'love of the job'?
I don't see why it's such a psychological problem for people to accept this.
If one has low CPF savings, why shouldn't one continue to work between to ages of 55 and 65, and defer drawing down on the CPF until one is at an age where perhaps it really becomes more challenging to be employed?
Why all this emotional response? Makes no sense.....
We just need to respect everyone's personal decision if someone thinks that they would want to stop working at 55. Or someone feel that they should be getting their own CPF $. There is also nothing wrong with that thought. -
MMM:
Actually, that's what quite a few a few people in this thread are implying, with emptional statements like 'slog until you return your ic'. There is a mistaken notion that if one is low income with low CPF savings, then one ought to have the right to access all of it at a young age. Under the guise of 'personal choice'.
Pls lah, 3boys. You are getting emo. No one is saying that one shouldn't work past 55 and of course it is not a shameful thing to do. Alot of people around us who are past 55 are still working... Is it a rare thing??? Of course not. Some is by choice while some don't have a choice.3Boys:
Is it shameful? Is it disgusting that one has to work at that age for financial reasons and not out of 'love of the job'?
I don't see why it's such a psychological problem for people to accept this.
If one has low CPF savings, why shouldn't one continue to work between to ages of 55 and 65, and defer drawing down on the CPF until one is at an age where perhaps it really becomes more challenging to be employed?
Why all this emotional response? Makes no sense.....
We just need to respect everyone's personal decision if someone thinks that they would want to stop working at 55. Or someone feel that they should be getting their own CPF $. There is also nothing wrong with that thought.
But pensions are pensions. They are meant to be drawn down over time and drawdown is related to how long the person is expected to live and how much he needs to subsist in his golden years. Just deal with that on a practical basis and it becomes obvious that to release the full sum at age 55 to everyone is just asking for trouble.
The government would be derelict in its duty if they did so, just to win popularity. -
Canvas:
Exactly. It's all personal choice. Nothing shameful about it. I hope this thread doesn't die like the 'in-laws\" one did. :siam:[/quote]If its all about personal choice, then why bother with CPF at all? Why not just give the whole lot to the employee every month and let him do what he will?
Pls lah, 3boys. You are getting emo. No one is saying that one shouldn't work past 55 and of course it is not a shameful thing to do. Alot of people around us who are past 55 are still working... Is it a rare thing??? Of course not. Some is by choice while some don't have a choice.MMM:
[quote=\"3Boys\"] Is it shameful? Is it disgusting that one has to work at that age for financial reasons and not out of 'love of the job'?
I don't see why it's such a psychological problem for people to accept this.
If one has low CPF savings, why shouldn't one continue to work between to ages of 55 and 65, and defer drawing down on the CPF until one is at an age where perhaps it really becomes more challenging to be employed?
Why all this emotional response? Makes no sense.....
We just need to respect everyone's personal decision if someone thinks that they would want to stop working at 55. Or someone feel that they should be getting their own CPF $. There is also nothing wrong with that thought. -
I’m surprised by the emotions exhibited here, but then again maybe I shouldn’t be.
Being curious, I decided to do a simulation with the following assumptions:
1. Started with $2,000 pay at age 24.
2. Annualised increment of 3% a year =>pay at just b4 55 yrs is around $4,850.
3. Annual bonus (whether AWS or VB) assumed to be zero.
4. CPF Special Account contribution rates based on current rates, i.e. 6% at <35, 7% <45, etc.
5. Interest rate on CPF SA assumed to be 4%
6. Interest on CPF balance is calculated on a 1 year lag basis, i.e. new contributions to CPF is assumed to earn interest only in the following year.
7. The data point that once Medisave ceiling is reached, the Medisave contribution will go to CPF SA is ignored.
Given the above conservative assumptions, at age 55, CPF SA balance will become …ta dah… approximately $150k. -
Re assumption 2, there will be increments when changing jobs and promotions. Increments when changing jobs can be quite substantial depending on industry. Also $2k starting pay may be a bit conservative.
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$2k @39 yrs ago is not conservative if you are looking at someone who will turn 55 soon.
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Irrelevant:
Not everyone can earn $2k as starting pay. Depends on what line the person works as.I'm surprised by the emotions exhibited here, but then again maybe I shouldn't be.
Being curious, I decided to do a simulation with the following assumptions:
1. Started with $2,000 pay at age 24.
2. Annualised increment of 3% a year =>pay at just b4 55 yrs is around $4,850.
3. Annual bonus (whether AWS or VB) assumed to be zero.
4. CPF Special Account contribution rates based on current rates, i.e. 6% at <35, 7% <45, etc.
5. Interest rate on CPF SA assumed to be 4%
6. Interest on CPF balance is calculated on a 1 year lag basis, i.e. new contributions to CPF is assumed to earn interest only in the following year.
7. The data point that once Medisave ceiling is reached, the Medisave contribution will go to CPF SA is ignored.
Given the above conservative assumptions, at age 55, CPF SA balance will become ....ta dah..... approximately $150k.
CPF amount also need to deduct for paying of housing and insurance coverage.
Put in SA means money cannot touch anymore? Why not let people has a choice to use CPF or not anytime, instead of put a minimum sum? Wonder if someone's CPF amount almost reach the minimum sum when reaching 55, then minimum sum increased again every year? What happens? :faint: -
http://madstranger.blogspot.sg/2013/05/cpf-minimum-sum-for-jul-2013-and.html
Came across this blog...just to share. -
Nebbermind:
$2k @39 yrs ago is not conservative if you are looking at someone who will turn 55 soon.
If a person works from 24yrs old to 55, he would have worked for 39 years? D minus for your maths.
It all depends on the age group that you are describing. For a person who is almost 55 now, he would have bought his flat in the 80s at 100k or less? His CPF contribution would have started at 50% instead of 36% currently. It is more likely than not that he would also have started work at age 16 or so, which would have allowed the wonderful effects of compounding work for him. -
Oppsgal:
CPF amount also need to deduct for paying of housing and insurance coverage.
A D minus to you too!
Since you are referring to my scenario, the focus is the CPF SA and not the OA. Since when do you plan to use the SA to pay for housing and insurance?
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