http://www.theonlinecitizen.com/201...scheme-increase-intergenerational-inequality/
The article, with inaccuracies, is actually a catalyst to solving the CPF issues. The writer is assuming that:
- an HDB flat will continue to appreciate in value even when the index has already touched 200
- there are no recessions
- Singaporeans are immortals, even at 65, homeowners still want to enjoy an "appreciating and wealth enhancing asset"
- the exit point for investment is indefinite
- paper wealth can put food on the table
- all Singaporeans are married with children, not widowed, not divorced, not single, and have beneficiaries
It's strange, isn't it? When it comes to Sentosa Cove, wealthy people can decide when to take profits/cut losses. But when it comes to government flats, people cannot decide for themselves when to exit. They should stupidly sit on paper profits without smelling their CPF money, accidentally leaving their properties to their relatives/public trustees.
CPF money is meant for retirement use, not as bequest. Though we shouldn't stop the well-off from doing so as they have the luxury.
We have been allowed to withdraw our money prematurely during our youth to invest in a home to generate investment income. That's why at 55, we have to return the money, unless we are high-income earners who have surplus CPF money to meet the Minimum Sum. For low- income earners, we are allowed to pledge our flats rather than made to do force-sale.
When we invest in shares/gold/castles in the air, selling to take profit is a very joyous occasion. Some people have been trying to paint selling houses as something very negative. Rich people change homes many times. The filthy rich rent to experience different lifestyles. Heartland widows happily sell their flats to move in with their children and go for China tours/afternoon karaoke.
Giving the next generation a better chance? Yes, by investing in an education when they are of school-going age, with money of course. Not dropping out of school because the parents are cash poor. Anyway, in usual cases, by the time the parents are retired, their children should be adults and giving their parents allowance, not the other way round. If so, is there a need to sell their property?
We have been (at least for the older generation) enjoying "appreciating and wealth enhancing asset" from the day we bought our flat till retirement. That's easily many decades. Anyone cash-poor retiree who still want to continue is either very greedy or mentally unsound.
The government is overwhelmingly strong-handed in deciding how we should manage our CPF funds. But people cannot choose when to die. Looking at the mortality table, a huge percentage of Singaporeans are actually collateral damage.
There is a compromise to returning our CPF at 55 and retaining them beyond 65. It is simply to give the people the freedom to exit their property investments anytime from 55 to 65. So studio apartments/retirement villages at 55 is a necessity. 55 also matches the year of mandatory setting up of Retirement Account and pledging of property. Any mismatch is a serious mistake.
Solving the retirement problem has the extra bonus of solving the housing problem of the nation. Over-building will be a problem. Not building more will lead to unaffordable housing for the young. The population is 5.4 million now, not 2.5 million. So realistically, we should be staying in smaller flats. Retired single-member households will lead the way since young families are still quite resistant.
The article, with inaccuracies, is actually a catalyst to solving the CPF issues. The writer is assuming that:
- an HDB flat will continue to appreciate in value even when the index has already touched 200
- there are no recessions
- Singaporeans are immortals, even at 65, homeowners still want to enjoy an "appreciating and wealth enhancing asset"
- the exit point for investment is indefinite
- paper wealth can put food on the table
- all Singaporeans are married with children, not widowed, not divorced, not single, and have beneficiaries
It's strange, isn't it? When it comes to Sentosa Cove, wealthy people can decide when to take profits/cut losses. But when it comes to government flats, people cannot decide for themselves when to exit. They should stupidly sit on paper profits without smelling their CPF money, accidentally leaving their properties to their relatives/public trustees.
CPF money is meant for retirement use, not as bequest. Though we shouldn't stop the well-off from doing so as they have the luxury.
We have been allowed to withdraw our money prematurely during our youth to invest in a home to generate investment income. That's why at 55, we have to return the money, unless we are high-income earners who have surplus CPF money to meet the Minimum Sum. For low- income earners, we are allowed to pledge our flats rather than made to do force-sale.
When we invest in shares/gold/castles in the air, selling to take profit is a very joyous occasion. Some people have been trying to paint selling houses as something very negative. Rich people change homes many times. The filthy rich rent to experience different lifestyles. Heartland widows happily sell their flats to move in with their children and go for China tours/afternoon karaoke.
Giving the next generation a better chance? Yes, by investing in an education when they are of school-going age, with money of course. Not dropping out of school because the parents are cash poor. Anyway, in usual cases, by the time the parents are retired, their children should be adults and giving their parents allowance, not the other way round. If so, is there a need to sell their property?
We have been (at least for the older generation) enjoying "appreciating and wealth enhancing asset" from the day we bought our flat till retirement. That's easily many decades. Anyone cash-poor retiree who still want to continue is either very greedy or mentally unsound.
The government is overwhelmingly strong-handed in deciding how we should manage our CPF funds. But people cannot choose when to die. Looking at the mortality table, a huge percentage of Singaporeans are actually collateral damage.
There is a compromise to returning our CPF at 55 and retaining them beyond 65. It is simply to give the people the freedom to exit their property investments anytime from 55 to 65. So studio apartments/retirement villages at 55 is a necessity. 55 also matches the year of mandatory setting up of Retirement Account and pledging of property. Any mismatch is a serious mistake.
Solving the retirement problem has the extra bonus of solving the housing problem of the nation. Over-building will be a problem. Not building more will lead to unaffordable housing for the young. The population is 5.4 million now, not 2.5 million. So realistically, we should be staying in smaller flats. Retired single-member households will lead the way since young families are still quite resistant.
