In a previous commentary, I tried to ask some questions to the readers what they should be unhappy about, when the minimum sum keeps rising.
What refuses to go away is the preaching of Roy Ngerng on 55% of the population not being able to meet the minimum sum.
There are a few things we cannot run away from:
- CPF and Your networth sans CPF make up your total networth
- Its just that your CPF is locked up. But its still part of your networth
- What is meant for retirement (CPF) becomes available to be used for mortgage payments. 50% of your property can go towards meeting the minimum sum
- Normal folks hate that their money is locked up for a long time, CPF or no CPF. They would rather put it in endowments since at most they can surrender them at a loss
- The majority of the people don’t understand why do you need an annuity like the CPF Life and treat it as something they won’t see it forever
- The rates at 2.5% and 4% are reasonable but not the 6-7% to attract people to lock up their money to see good growth
If you hate to see your money being locked up, and that you understand that you won’t see your money forever, why would you want to top up something like that?
It seems we don’t have much statistics showing how much networth folks have sans the CPF and their housing. They could very well top up with their savings if they want to. Perhaps a statistic how many own endowments, second property, cost value at CDP accounts would answer that.
What would make people force top up? I believe the rates are too low. If you pump it up 1.5% for both, or that you introduce some TEMASEK or GIC good investment bonus, people will top it up.
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