Viaticle settlement and the CPF dilemma

Instead of owning an insurance policy, Mdm Tan owns her CPF Retirement Account savings. Her CPF savings earns a tidy 4% risk free interest in CPF and she can draw it down at 65 (can you think of a bank that offer a better risk free rate?

But what if she has the ability to withdraw it earlier? Similar to the viatical scenario, where Mr Smith can cash in his insurance policy at a discount early, if Mdm Tan can cash in her CPF savings by foregoing the compounding 4% interest rate the CPF pays, she will withdraw a much smaller amount.

Mr Smith risks having nothing for the family he left behind when he dies.

Mdm Tan risks having nothing to support her old age.

So when some Singaporeans want to withdraw their CPF retirement savings earlier and not when they reach 65, it can put the Government in a moral dilemma.

The Government actually saves money by allowing early withdrawal, because it is costly to pay 4% on the CPF

savings. And saving money leads to some Singaporeans having no income nor savings in their old age, and living with little dignity.

- http://www.fivestarsandamoon.com/viaticle-settlement-and-the-cpf-dilemma/

Confuseous said:

But what if she has the ability to withdraw it earlier? ... if Mdm Tan can cash in her CPF savings by foregoing the compounding 4% interest rate the CPF pays, she will withdraw a much smaller amount. Mdm Tan risks having nothing to support her old age. So when some Singaporeans want to withdraw their CPF retirement savings earlier and not when they reach 65, it can put the Government in a moral dilemma. The Government actually saves money by allowing early withdrawal, because it is costly to pay 4% on the CPF
savings. And saving money leads to some Singaporeans having no income nor savings in their old age, and living with little dignity.

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If you are a PR, you can get your full CPF money in one lump sum and fuck off from sinkie land. They can enjoy their CPF money.

If you are a sinkie, no full lump sum withdrawal. You get certain sum per month until you die. What is the use of getting 4% per annum if you cannot enjoy your own money while still alive, kicking, screwing, drinking or smoking? PR get better deal.

Confuseous said:

Instead of owning an insurance policy, Mdm Tan owns her CPF Retirement Account savings. Her CPF savings earns a tidy 4% risk free interest in CPF and she can draw it down at 65 (can you think of a bank that offer a better risk free rate?

But what if she has the ability to withdraw it earlier? Similar to the viatical scenario, where Mr Smith can cash in his insurance policy at a discount early, if Mdm Tan can cash in her CPF savings by foregoing the compounding 4% interest rate the CPF pays, she will withdraw a much smaller amount.

Mr Smith risks having nothing for the family he left behind when he dies.

Mdm Tan risks having nothing to support her old age.

So when some Singaporeans want to withdraw their CPF retirement savings earlier and not when they reach 65, it can put the Government in a moral dilemma.

The Government actually saves money by allowing early withdrawal, because it is costly to pay 4% on the CPF

savings. And saving money leads to some Singaporeans having no income nor savings in their old age, and living with little dignity.

- http://www.fivestarsandamoon.com/viaticle-settlement-and-the-cpf-dilemma/

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Five Stars and a Moon is a pro PAP website. But that fact aside, the argument is illogical. The insurance buyout benefits both parties because it plugs a loophole in the extremely stringent insurance payout clause that states that the sum assured is only paid out on death. In the meantime the family may be in dire financial straits and the man may need urgent cash for his medical bills. The buyout gives the family a significant portion of the sum assured to tide over. Note that the family has not been robbed - the buyout figure is usually higher than total premiums paid.

4% return on CPF will not give someone an adequate retirement when there are little funds to begin with. And if there are lots of funds, he can invest it elsewhere at his own discretion. It is choice given to the consumer. GIC and Temasek make huge sums off our CPF savings and yet return only a paltry 4%. The Malaysian govt returns an even higher rate. Who is being robbed here? Singaporeans.

The article is also factually so incorrect it is pointless to actually go and correct it. The govt does not return the full sum. It keeps a large part as compulsory annuity of which it pays a pittance. Double robbery. The compulsory annuity scheme lets the govt earn huge excess returns on CPF member savings whilst paying them a miserly monthly payout after the age of 65.

Confuseous said:

Mdm Tan risks having nothing to support her old age.

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There is nothing stopping the Mdm Tans of this or any other Madame for that matter opening a savings account and contributing regularly.

The power of compound interest will ensure that she has a tidy sum which she has full control over.

The sums can be done at http://www.thecalculatorsite.com/finance/calculators/compoundinterestcalculator.php

Hi whole article does not make sense. He is freely admitting CPF is inadequate. The only exact same name Tey I could find was a sinkie living in Vietnam. Maybe he is the asshole who wrote it.

4% is worthless considering the funds are being used to fund the HDB Ponzi scam which results in inflationary prices thanks to massive CPF funds flowing into the already overheated market Which means prices go even higher and others have to spend even more of their CPF funds to buy their ponzi shoebox.endless cycle of fuckery.

In order words money in CPF is as good as monopoly money.

frenchbriefs said:

4% is worthless considering the funds are being used to fund the HDB Ponzi scam which results in inflationary prices thanks to massive CPF funds flowing into the already overheated market Which means prices go even higher and others have to spend even more of their CPF funds to buy their ponzi shoebox.endless cycle of fuckery.

In order words money in CPF is as good as monopoly money.

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4% is useless because the inflation rate is at least 6% and in some years, its double digits. This dumbshit who wrote the article thought that 4% is damn big fuck.

Confuseous said:

Instead of owning an insurance policy, Mdm Tan owns her CPF Retirement Account savings. Her CPF savings earns a tidy 4% risk free interest in CPF and she can draw it down at 65 (can you think of a bank that offer a better risk free rate?

But what if she has the ability to withdraw it earlier? Similar to the viatical scenario, where Mr Smith can cash in his insurance policy at a discount early, if Mdm Tan can cash in her CPF savings by foregoing the compounding 4% interest rate the CPF pays, she will withdraw a much smaller amount.

Mr Smith risks having nothing for the family he left behind when he dies.

Mdm Tan risks having nothing to support her old age.

So when some Singaporeans want to withdraw their CPF retirement savings earlier and not when they reach 65, it can put the Government in a moral dilemma.

The Government actually saves money by allowing early withdrawal, because it is costly to pay 4% on the CPF

savings. And saving money leads to some Singaporeans having no income nor savings in their old age, and living with little dignity.

- http://www.fivestarsandamoon.com/viaticle-settlement-and-the-cpf-dilemma/

Click to expand...

the moral dilemma of the gahmen is regretting not fleecing enough from the ppl.

the moral dilemma of the ppl is not having enough daily screws from the gahmen. once they have had enough, the gahmen can go and screw themselves permanently and for good and the betterment of the ppl.