Monday, November 5, 2012

CPF Hungers for MORE of our MONEY

Seems like CPF hunger for citizens money can never be satisfied. Their policies are forever changing in order to get more and MORE money from us. Previously in order to con more money from us, they encourage us to top up the CPF of our spouse and parents, who are our immediate family. As CPF appetite increases, they ask us to top up money into our siblings, grandparents and even NON-immediate family such as spouse's siblings, parents-in-laws, grandparents-in-laws CPF account (s).

Their carrot is the 2.5% interest which is higher than what local banks offer. Bear in mind, we can do what we like with our money in the bank. But we have no control over our money in CPF account. CPF dictates if we can draw it out, when we can draw it, how much we can draw out,...etc.

Another of their carrot is the tax incentives. However, it is limited to $7000. Anyway the direct personal income tax rate is relatively low. It is the INDIRECT taxes such as GST, ERP, COE....etc, etc that are making life hard for the citizens. Thus, this is NOT really a carrot even for high income earners.

When it comes to conning money from us, our govt is very creative. So now they twit the CPF policy again in order to get more money into CPF.  Previous there is a cap to the top up amount, which is the Retirement minimum sum required minus what is in the Special account, approved sum used for investment, etc. Now they claimed they 'simplify' it. Basically, they minus off less items so that the top up amount increases tremendously. The difference in the previous cap and current cap can be as much as $50K or more !

For those who are enticed by CPF 'carrots' - BEWARE ! Remember that CPF has the habit of changing the policies and shifting goal post. It is more practical that we give cash outfront to those we loved than deposit it into their CPF, whereby they can't even 'touch' it.

S'pore has low external debt but very high internal debt as CPF money is used to buy into govt bonds, directly and indirectly filter into GIC and Temasek which in recent years gone into high risk investment and incurred heavy losses. We the public do not know how much fund is left untouched in CPF and how much went into buying bonds and investment.

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