Monday, May 26, 2014

Why CPF system is better than other systems: Tan Chuan-Jin


Reference: Why CPF system is better than other systems: Tan Chuan-Jin

The government is too kind putting out all those arguments.

It should just say that Singapore citizens are too short sighted, irresponsible and not smart enough to manage their own money.

I just read this story from TRS: MY CPF – WHO DECIDE? YOU OR ME?.

This guy Dr DOS earns $2000 monthly, belongs to a family of 5. His total CPF contributions has dropped from 32.5% to 23.5%. That drop has resulted in him not having enough money to pay for his mortgage. So he wants to use the remaining CPF savings make up the difference and pay. CPF says no.

Let's be clear about one point first. Dr DOS has no savings besides his CPF savings. What's going on?

Dr DOS has already shown that he can't save money on his own due to whatever circumstances.

With the CPF system, his savings is locked up so that he can only withdraw at a much later date. Without CPF system, he would have absolutely no savings at all very soon. He's just going to spend more than he saves until he has no more savings - remember he is unable to save.

By allowing money to be withdrawn now to tide over financial difficulties is just a recipe for more trouble in the future.

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