Time really flew and before I realised, I haven’t written for a whole month! But there are people and things to take care of, and also Dirty Shoes has been entertaining all of you for the past month, so that hasn’t been such a long wait I hope. Also, I saw Dixon complaining about how old my posts were =\
Anyhow, this recent trip back to Singapore threw light on a lot of things. For the longest time, I’ve read about how evil the CPF is. Granted, I do see a number of “weird” rules about it that I don’t like, but I’ve never really thought it evil. For one, having to put back 2.5% p.a. of accrued interests if you used it to buy your home and then decide to sell it some many years later is really odd to me. But if the rule is already in place, it makes it even odder that people would want to pay for their houses by CPF. The simple reason is that, you are not really losing the 2.5% accrued interest; you are losing 5% interest. The 2.5% you didn’t earn + the 2.5% you have to pay back.
Honestly, perhaps it’s because I didn’t understand the details enough that I find it a reasonable system all in all. But what happened to Dad recently made me realise, perhaps it isn’t such an evil system as what people described after all.
Dad is a fishmonger. He is his own employer, so no employer puts his salary into CPF and no one to contribute an additional 16% or so to his CPF either. But the law makes it that it is mandatory for the self employed to contribute to the Medisave. In the CPF Board’s words:
As a Self-Employed Person, you do not receive regular Medisave contributions from employers. It is therefore important to contribute regularly and make sure you have sufficient Medisave savings for your future healthcare needs. This is especially important during old age, when you may have stopped working.
Extracted from https://www.cpf.gov.sg/Members/Schemes/schemes/self-employed-matters/self-employed-scheme
As Dad also doesn’t make a lot of money, he contributes minimal amount to his Medisave regularly as stipulated by law. And perhaps for people like him who doesn’t make much money, contributing to Medisave is a bother because if I already don’t have a lot of money, why do you still want to take my money and lock it up?
Now, Dad doesn’t have insurance. I learned that he got it cancelled only very recently just before he was diagnosed with cancer, so that was a big slap to the “insurance is a waste of money” face. Frankly, I didn’t know about Dad’s Medisave contribution nor Medishield coverage either until recently, when I was prepared to dig out my savings to pay for his treatment that I learned his Medisave amount and Medishield coverage was enough to cover his entire treatment (minus the medicines and consultation since there is a limit to the coverage).
Yes, he’s probably got next to nothing in his OA and SA accounts, but thanks to the government’s stipulated mandatory contribution to Medisave and coverage of Medishield, his treatment is well taken care of.
Sure, not being able to work during treatment (and probably after) still poses challenges to the family financially. But having saved some 20- to 30-thousand dollars for the treatment is a huge relief for us. And guess what? If he had made himself contribute what little amount he had to his OA and SA, the past 40-50 over years of contribution would likely definitely have placed him in a better position (no matter how little) than where he is now.
Perhaps it’s only when you are in deep shit that you realise how the CPF is beneficial. For those complaining about it, be thankful you are in a financially ok position to talk shit about it. But when the storm comes, I hope you have yourself covered.
Welcome back!! Woohoo got an honorable mention wahaha 😡
Ya sia, you have not written in such a long time that i had to go back to the beginning of your blog to read again (like how you re-watch an anime series while waiting for season 2 lol) i noticed there were some gaps between 2010-2011, can’t remember if you were busy back then or did the posts not get transferred when you move your servers =s (e.g 2 articles for whole of Aug 2010 only!?)
Glad you managed to find some time to catch up with your family, hope everything goes well with your dad and all! 🙂 Going on this CPF topic, maybe i have not reached the situation where i need to use so i don’t know what’s everyone’s beef with it but i i kinda like the idea (sure they lock up 20% of my salary, but the gahmen makes our employers contribute 17% (i think)?!?! isn’t that essentially free money?!
Another point i like (which i guess is only applicable to us who like to live outside of Singapore) is that if you renounce your citizenship, you get to withdrawal all your CPF money, so people who make noise about not being able to access the funds until they die etc should really consider this option (i mean if this is such a terrible country with bad policies that don’t suit your lifestyle, why not reconsider relocating hehe).
Anyway glad to see you back, hope you will write more this month! 🙂
Hmm, I’m not sure about that. It’s been so long, I don’t remember though it’s possible I only wrote that little during that time since this blog was initially meant to keep my friends and family updated on my situation in Japan.
Thanks for re-reading! I take that as a compliment lol. And good point about relocating.
annnnnnnnnnd the emoticon with the X as a mouth =X turns out to be the angry emoticon again >_<) どうして T_T
Lol, the trick is to use the equal sign for the eyes
Hear hear! It’s been a decade or so since I came out to work, and along the way, I’ve heard so many youngsters who go travelling and live almost pay check to pay check because, YOLO, and it’s so alarming as I watch them nearing the 30s and not saving nor investing. Somewhere along the way I realised what the govt’s CPF was for and how important it was. To protect itself and these citizens who do not think for themselves.
And now you just got me hesitating about paying for my house using CPF.
I’d think it is best to not use CPF for housing but few, especially young couples who just finish paying off their tuition fee loan as well as wedding and not to mention, upcoming reno that will require cash, can afford to not use their CPF. Furthermore, not paying off the property cost as much as possible i.e. use CPF, means accruing more interest with a higher loan amount. Of course, another catch is that in order to take up HDB loan, one has to wipe out their OA (if I’m not wrong) so that’s another problem, unless bank loan is an option to the couple.
So I’d say, I’d totally love the system if I’m rich! Don’t have to worry about minimum sum and I’d even throw money into SA to offset tax and get higher interest for my money.
Hope I get to ‘love the system’ one day, lol.
Hahaha wah if dont use CPF, where got money buy house!??!? If you got enough money to buy house without CPF means you super rich, then again this CPF problem don’t even apply to you anymore hahaha.
Actually on the CPF interest problem with housing, if you don’t sell the house and use it forever, you don’t need to repay the CPF thingy i guess? Haha and if you do need to sell your house and tyco manage to sell for higher price, i guess it helps lessen the CPF “repayment”?
Hope Japan has a better “CPF” >_<
Yea, I guess the CPF system is meant to protect those who YOLO too much.