Wednesday, August 22, 2007

Hear only the good news

Pardon my post on the CPF rates much earlier. I've said too much too soon.

Seems like the style that PM introduces new schemes or plan is like the TV advertisement on one of the radio stations, "Hear only the good news". In this case, say only the good news. Yes, the CPF rates for the first $60,000 combined will increase by 1%. But here's the catch, the rates will be now pegged to long term government bond (around 3-3.5% for 20 yrs). I'm supposed to get a smaller rates now, so I can get a higher rates in the future, so they say. No longer will we have guaranteed 4% returns now, so the lesson here is nothing is guaranteed.

I wonder why we have to put in CPF and get miserable long term bond rates (and expose ourselves to volatility and risk). The bond rates can't even cover inflation, my god.

This just means I have to work harder on my own investments than rely on anybody, even the government. Makes me rethink about putting more into CPF when i mentioned in my previous post on the same topic.

The gripe I have is more about the compulsory annuities scheme imposed on a portion of the minimum sum with CPF members below age 50. CPF members can withdraw their CPF amount at age 55, leaving a minimum sum behind which can be withdrawn at age 63 - 65. Now the powers that govern us wanted members to buy a compulsory annuity using a portion of the minimum sum, so that we can get monthly payout for life, to protect us against longevitiy. The problem is that if we did not live past 85, the remainder of the annuities sum we purchased will be given to a pool so that it can be given to those who are still living. If we want to get out the remaining money upon death, we have to pay a higher premium on the annuities.

Hello? I can't even decide to donate my money to others or my family now? I still need to pay more money so I can get out my own money? This must be a real eye opener - state controlled people funded welfare system. Government controlling our funds so that we can pay a portion to fund others...what the hell? Just go to cna forum market talk section and see how people respond to this. It's both funny and sad.

SO what's next? Compulsory euthanasia upon hitting age 85 so that we won't burden the nation, our families and fellow singaporeans? Longevity is a disease in this new world.

I can only think of this song by Story of the Year - Until the day I die.