Re: PAP Should Stop CPF Wayang, Just Return OUR CPF
My advice is not to leave. Singapore is the best place in the world.
My advice is not to leave. Singapore is the best place in the world.
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The Hard truth is CPF is based on a big fat lie! Here's why...
- Thread starter Sinkie
- Start date
We are all capable of independent thought. I grew up in Singapore and was told that CPF would take care of my retirement and that a good degree would secure my future. I listened to this mantra but I knew that I needed to do the calculations myself.
All I had to do was to take out a simple financial calculator (HP used to make great products before the age of the PC) and do some basic math.
It showed me in a matter of minutes that the estimated $900,000 that I would accumulate in CPF based upon salary projections would not be enough for me to retire on without making significant sacrifices in my lifestyle.
I decided there and then that I needed to be self employed if I was to retire at 40. I then took small but regular steps towards achieving that goal. It took me a bit longer and I made it 4 years late. However late is better than never.
I don't think sinkies are capable of independent thought. They are trained since young not to have any individuality at all... That is why I stay away from sinkies.
Re: PAP Should Stop CPF Wayang, Just Return OUR CPF
When you pay yourself a monthly salary, you're not self employed, but a salaried employee, whether you're running your own business or not. The question to ask yourself is how you file your income tax return if you pay yourself, and how you manage your business, because business profits or loss fluctuates and it do not make a lot of sense to pay yourself if it is a sole proprietor or even a partnership, as it is tricky and you will potentially flag IRAS if you pay yourself inappropriately. Furthermore, contrary to what you say that 'all of Singapore's self employed do it that way', I'm doubtful, for it makes little business sense and also most self employed are freelancers, insurance agents and other commission agents and self-employed hawkers, besides sole proprietors. I find your answer pretty suspicious, because how do you pay your income tax then?
Then don't compare CPf with the NZ pension scheme. I raise the comparison with EPF of Malaysia to show you that members can withdraw 30% at age 50 and full withdrawal at age 55, even though Malaysia had adjusted its retirement age higher, because this is the way to manage long-term scheme, where the so-call maturity date or age cannot be a moving target that surprises everyone when it comes the time to withdraw, the date gets further and further down the road. Clearly, the Malaysian EPF is honorable and adheres to its promise of the EPF withdrawal age, even though the retirement age had changed, because the two ages are materially different and should be mutually exclusive as evidently it is for the Malaysian EPF, but not CPF, which uses bait and switch to hoard the member's CPF. How can one trust a scheme that keeps moving its goal posts as and when it feel like it. This is a form of deceit, not honorable.
Ok, this point I do not like to comment further, because it is a distraction. In a nutshell, my opinion is the strength of the Singapore dollar is a double edged sword. MAS has been pulling on a tightrope all these years to ensure the Singapore dollar is competitive vis-a-vis its trading partners and other variables, like inflation, cost of living, cost of sales, currency hedge, etc, etc.
As far as I know, "upon reaching the age of 55, members can withdraw the full amount of his CPF contributions and its accrued interests' is a promise cast in stone, so to speak. If it is not, then show me the document that says it isn't. Also, let me turn the question back to you. If it is not a promise, then what is it then? Also, please enlighten me where in which document that said the withdrawal age of 55 can be changed at a future date, when CPF was mooted years ago. Show us and we'll quietly fade away, with our balls squeezed but boh piang, cannot do anything because we've been stupid to trust so blindly.....can only Ren Min......LOL
When you pay yourself a monthly salary, you're not self employed, but a salaried employee, whether you're running your own business or not. The question to ask yourself is how you file your income tax return if you pay yourself, and how you manage your business, because business profits or loss fluctuates and it do not make a lot of sense to pay yourself if it is a sole proprietor or even a partnership, as it is tricky and you will potentially flag IRAS if you pay yourself inappropriately. Furthermore, contrary to what you say that 'all of Singapore's self employed do it that way', I'm doubtful, for it makes little business sense and also most self employed are freelancers, insurance agents and other commission agents and self-employed hawkers, besides sole proprietors. I find your answer pretty suspicious, because how do you pay your income tax then?
Then don't compare CPf with the NZ pension scheme. I raise the comparison with EPF of Malaysia to show you that members can withdraw 30% at age 50 and full withdrawal at age 55, even though Malaysia had adjusted its retirement age higher, because this is the way to manage long-term scheme, where the so-call maturity date or age cannot be a moving target that surprises everyone when it comes the time to withdraw, the date gets further and further down the road. Clearly, the Malaysian EPF is honorable and adheres to its promise of the EPF withdrawal age, even though the retirement age had changed, because the two ages are materially different and should be mutually exclusive as evidently it is for the Malaysian EPF, but not CPF, which uses bait and switch to hoard the member's CPF. How can one trust a scheme that keeps moving its goal posts as and when it feel like it. This is a form of deceit, not honorable.
Ok, this point I do not like to comment further, because it is a distraction. In a nutshell, my opinion is the strength of the Singapore dollar is a double edged sword. MAS has been pulling on a tightrope all these years to ensure the Singapore dollar is competitive vis-a-vis its trading partners and other variables, like inflation, cost of living, cost of sales, currency hedge, etc, etc.
As far as I know, "upon reaching the age of 55, members can withdraw the full amount of his CPF contributions and its accrued interests' is a promise cast in stone, so to speak. If it is not, then show me the document that says it isn't. Also, let me turn the question back to you. If it is not a promise, then what is it then? Also, please enlighten me where in which document that said the withdrawal age of 55 can be changed at a future date, when CPF was mooted years ago. Show us and we'll quietly fade away, with our balls squeezed but boh piang, cannot do anything because we've been stupid to trust so blindly.....can only Ren Min......LOL
Re: PAP Should Stop CPF Wayang, Just Return OUR CPF
I can tell you that I am currently paying myself a salary in NZ too. A company is a separate legal entity in any jurisdiction.
There are 2 directors that own 50% each of the company.
For income tax purposes, both of us pay ourselves a salary which is determined by my accountant to be within industry norms. This reduces the tax burden because company tax is higher than personal tax in the tax bracket that I am in. This has been done for the last 7 years with no problems from the IRD because the salary is not off the scale.
At the end of the year, the company pays dividends to each of us.
Directors/owners paying themselves a salary is not unusual. It is done in every country I have lived in.
Now regarding the CPF "promise".... as far as I can see it wasn't a "promise" cast in stone. It was simply the CPF rule at the time the scheme was adopted by the PAP. Rules change with time and so they should because what was appropriate in the 60s is no longer feasible. It would be ridiculous to use the same rules that were drafted in the last century to manage today's retirement plans.
There used to be a rule that when you were driving, you had to stick your hand out of the window to signal turns and stops. I actually followed these rules in order to pass my driving test.
The rule has since been discarded for obvious reasons.
I can tell you that I am currently paying myself a salary in NZ too. A company is a separate legal entity in any jurisdiction.
There are 2 directors that own 50% each of the company.
For income tax purposes, both of us pay ourselves a salary which is determined by my accountant to be within industry norms. This reduces the tax burden because company tax is higher than personal tax in the tax bracket that I am in. This has been done for the last 7 years with no problems from the IRD because the salary is not off the scale.
At the end of the year, the company pays dividends to each of us.
Directors/owners paying themselves a salary is not unusual. It is done in every country I have lived in.
Now regarding the CPF "promise".... as far as I can see it wasn't a "promise" cast in stone. It was simply the CPF rule at the time the scheme was adopted by the PAP. Rules change with time and so they should because what was appropriate in the 60s is no longer feasible. It would be ridiculous to use the same rules that were drafted in the last century to manage today's retirement plans.
There used to be a rule that when you were driving, you had to stick your hand out of the window to signal turns and stops. I actually followed these rules in order to pass my driving test.
The rule has since been discarded for obvious reasons.
Re: PAP Should Stop CPF Wayang, Just Return OUR CPF
round and round we go,
4 legs good, 2 legs bad,
3 legs and you win.
:o
round and round we go,
4 legs good, 2 legs bad,
3 legs and you win.
:o
Re: PAP Should Stop CPF Wayang, Just Return OUR CPF
Boss, have you not heard of the saying 'a bird in hand is worth two in the bush'?
Boss, have you not heard of the saying 'a bird in hand is worth two in the bush'?
Re: PAP Should Stop CPF Wayang, Just Return OUR CPF
The money is in my hands. It's no different from a term deposit. In fact it is better than a term deposit as far as interest rates go.
Boss, have you not heard of the saying 'a bird in hand is worth two in the bush'?
The money is in my hands. It's no different from a term deposit. In fact it is better than a term deposit as far as interest rates go.
Re: PAP Should Stop CPF Wayang, Just Return OUR CPF
Tax deduction on corporate tax, makes sense vs personal income tax hit. Salaried owners are a business cost, and what gives if yours is not out of whack (with others in the heap). Even with perks as in entertainment, travel and car (not for Singapore with fiscal constraints on cars)
Re: PAP Should Stop CPF Wayang, Just Return OUR CPF
It's easy to work things out nowadays. All tax accountants have spread sheets that can tell you within minutes how to structure your taxes.
In my case it made sound business sense to rent the premises that I own to the company while the company pays me a salary.
It's easy to work things out nowadays. All tax accountants have spread sheets that can tell you within minutes how to structure your taxes.
In my case it made sound business sense to rent the premises that I own to the company while the company pays me a salary.
Re: PAP Should Stop CPF Wayang, Just Return OUR CPF
Your advice is akin to a eye surgeon marketing and promoting that his patient undergo lasik surgery so that they can do away with their spectacles but he is wearing specs himself! LoL
Your advice is akin to a eye surgeon marketing and promoting that his patient undergo lasik surgery so that they can do away with their spectacles but he is wearing specs himself! LoL
Re: PAP Should Stop CPF Wayang, Just Return OUR CPF
What was appropraiate in the 60s is where their hands are OFF the money and it should still apply today, shouldn't it?
You don't take someone's money, make lots of money from it, pay yourself a hefty 'service fee' for using that money, channeled whatever you deem excess back to your safe keeping and pay crumps back to those who actually are the owners of those money.
Of course, if those owners had willingly 'given permission ' for their money to be used ( like morons buying unit trusts) and in doing so reward these ppl with hefty service fee, then this is their own choice in doing so.
Make sense to you?
What was appropraiate in the 60s is where their hands are OFF the money and it should still apply today, shouldn't it?
You don't take someone's money, make lots of money from it, pay yourself a hefty 'service fee' for using that money, channeled whatever you deem excess back to your safe keeping and pay crumps back to those who actually are the owners of those money.
Of course, if those owners had willingly 'given permission ' for their money to be used ( like morons buying unit trusts) and in doing so reward these ppl with hefty service fee, then this is their own choice in doing so.
Make sense to you?
Re: PAP Should Stop CPF Wayang, Just Return OUR CPF
If you go to an eye specialist, chances are you'll find that is indeed the case. :p That's why I haven't done Lasik.
If you go to an eye specialist, chances are you'll find that is indeed the case. :p That's why I haven't done Lasik.
Re: PAP Should Stop CPF Wayang, Just Return OUR CPF
It's not an ideal situation but if you compare it to welfare states that rob you dry of your hard earned money so you never see it again, it's the lesser of two evils.
It's not an ideal situation but if you compare it to welfare states that rob you dry of your hard earned money so you never see it again, it's the lesser of two evils.
Re: PAP Should Stop CPF Wayang, Just Return OUR CPF
Again, you're digressing. As I said, if you're paid a monthly salary, you're a salaried employee in the eyes of CPF and not a self-employed. Since you now let us know your business entity is a company and not a sole trader or partnership, then the company is taken as a separate legal entity, as if it was a person in the eyes of the law, especially IRAS. When you receive dividends, you've to declare as income and be taxed on an individual level. Usually, if the business entity is a company, then it is possible to give yourself a salary, but usually, most business owners will draw a small salary only (to avoid IRAS' query on its appropriateness) and the rest as dividends, because a company needs operating costs. Singapore's company tax is not low and IRAS is not so stupid to close one eye if it has evidence to show you're shifting profits to convert them to costs, like drawing a high salary.
If you're drawing a small salary, then I don't know how you can end up having so much in your CPF account and more importantly, why you lock yourself into a scheme that pays 2% interest thereabout and mind you, back in the 70's, the fix deposit rate is hovering at 6% to 8%, unlike what is this decade or more, at 1% thereabout, making the scheme attractive compared to fix deposit.....but still not attractive if you invest your dividends in equity instruments, for example and not having the absurdity of having to pay for medisave, which when it started, is not possible to will the reminder to your beneficiary when you die....and it is highly suspect for a 'shrewd' business owner like you not to take advantage of the equity bull-runs in the 90's and 00's, instead of leaving your money in CPF earning paltry sums and even if you had invested, your choice of funds are limited and you can only buy gold in limited quantities, etc, etc. So, I'm calling your bluff here!
What do you mean by rule? It is a law and laws are cast in stone and can only be amended through parliament. You're trying to say that rules can change with times, but you must not forget that rules are in fact laws and laws cannot be changed easily. For this CPF withdrawal age of 55, this is the law, liken to someone signing a contract that mentions the completion of a project by a certain number of years and such salient determinants like completion date cannot be change unilaterally because everyone buys in with such an expectation of the date of completion and if there're changes that any one party does not accept, the contract laws cannot be changed to suit one party alone.
It's the same as a marriage contract. You marry because of love or whatever, but finally, when you want to divorce for whatever reasons, you cannot just walk out or follow sharia law, just repeat 3 or 4 times to your wife and you're divorced, without your wife having to consent to it, just like that. One needs to honor the terms of the contract and not give excuses like times have changed. Nothing change until and unless all parties agree to the change.
Again, you're digressing. As I said, if you're paid a monthly salary, you're a salaried employee in the eyes of CPF and not a self-employed. Since you now let us know your business entity is a company and not a sole trader or partnership, then the company is taken as a separate legal entity, as if it was a person in the eyes of the law, especially IRAS. When you receive dividends, you've to declare as income and be taxed on an individual level. Usually, if the business entity is a company, then it is possible to give yourself a salary, but usually, most business owners will draw a small salary only (to avoid IRAS' query on its appropriateness) and the rest as dividends, because a company needs operating costs. Singapore's company tax is not low and IRAS is not so stupid to close one eye if it has evidence to show you're shifting profits to convert them to costs, like drawing a high salary.
If you're drawing a small salary, then I don't know how you can end up having so much in your CPF account and more importantly, why you lock yourself into a scheme that pays 2% interest thereabout and mind you, back in the 70's, the fix deposit rate is hovering at 6% to 8%, unlike what is this decade or more, at 1% thereabout, making the scheme attractive compared to fix deposit.....but still not attractive if you invest your dividends in equity instruments, for example and not having the absurdity of having to pay for medisave, which when it started, is not possible to will the reminder to your beneficiary when you die....and it is highly suspect for a 'shrewd' business owner like you not to take advantage of the equity bull-runs in the 90's and 00's, instead of leaving your money in CPF earning paltry sums and even if you had invested, your choice of funds are limited and you can only buy gold in limited quantities, etc, etc. So, I'm calling your bluff here!
What do you mean by rule? It is a law and laws are cast in stone and can only be amended through parliament. You're trying to say that rules can change with times, but you must not forget that rules are in fact laws and laws cannot be changed easily. For this CPF withdrawal age of 55, this is the law, liken to someone signing a contract that mentions the completion of a project by a certain number of years and such salient determinants like completion date cannot be change unilaterally because everyone buys in with such an expectation of the date of completion and if there're changes that any one party does not accept, the contract laws cannot be changed to suit one party alone.
It's the same as a marriage contract. You marry because of love or whatever, but finally, when you want to divorce for whatever reasons, you cannot just walk out or follow sharia law, just repeat 3 or 4 times to your wife and you're divorced, without your wife having to consent to it, just like that. One needs to honor the terms of the contract and not give excuses like times have changed. Nothing change until and unless all parties agree to the change.
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Re: PAP Should Stop CPF Wayang, Just Return OUR CPF
hi there...im a singapore pr [malaysian from johor] and 29 years old. recently i have attained sarawak pr status and wish to withdraw my cpf after renounce my singapore pr status. can anyone advice me regarding this thing and is it possible for me to withdraw my cpf? thank you
hi there...im a singapore pr [malaysian from johor] and 29 years old. recently i have attained sarawak pr status and wish to withdraw my cpf after renounce my singapore pr status. can anyone advice me regarding this thing and is it possible for me to withdraw my cpf? thank you
Re: PAP Should Stop CPF Wayang, Just Return OUR CPF
So Leongsam should have cash out minus the min sum.... CPF...upon age 55....$600k but can't transfer to NZ as will kanna tax...hmm....... if you so have faith with sg... u should have bought a business or property in sg.
my 2 cousins passed away at age 54.....life is shorter than it seems to be..
CPF have it pros and cons....
So Leongsam should have cash out minus the min sum.... CPF...upon age 55....$600k but can't transfer to NZ as will kanna tax...hmm....... if you so have faith with sg... u should have bought a business or property in sg.
my 2 cousins passed away at age 54.....life is shorter than it seems to be..
CPF have it pros and cons....
Re: PAP Should Stop CPF Wayang, Just Return OUR CPF
There is another saying: "Two birds in her hand is worth one in her bush".
There is another saying: "Two birds in her hand is worth one in her bush".
Boss, have you not heard of the saying 'a bird in hand is worth two in the bush'?
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