Referring to the article “Prepare for retirement ‘by using less CPF money when young'”, which unfortunately, gave the impression that Lim was trying to urge Singaporeans not to use their CPF monies before retirement for any purpose, including housing, healthcare and education for children, Lim clarifies that this is a wrong interpretation of what his article had meant.
Lim had made three points about the CPF:
1) The CPF is your money and nobody can take that money from you.
2) Your money with CPF is 100 per cent safe and continues to earn risk-free interest, even during challenging times such as the global financial crisis in 2009.
3) The money is mainly for your retirement purpose. Besides housing, healthcare and education for your children, a very important part of CPF is to cater for retirement. So, for every dollar, if you can defer the use of the dollar, it is better to defer the use of the dollar when you are still young.
Many citizens are lamenting that they can see their money in CPF but they cannot use it, thus they are feeling resentful. Where are those citizens who have happily made use of their money in CPF to buy a house? None bothered to turn back and thank the government for safe-keeping and growing that sum of money which allowed them to comfortably get a more than decent roof over their head. Gratification. Many know the word but few truly understand it and even fewer practice it.
I would like to refer to the article “$1m gone in a year: Widow of Changi Airport worker killed in accident now broke”. After her husband was killed in a freak accident while working at Changi Airport’s Budget Terminal, Madam Pusparani Mohan, 34, received nearly $1 million in insurance payouts and donations. Today, the money is all gone in just one year. She does not have enough for her children’s future. Madam Pusparani had thought that she could use the money put aside for her children’s future for some investment and put the money back when she has made a profit from the investment. What she did not plan for is a failed investment.
I am not trying to claim that all of us will squander off $1 million in a year but what I am trying to illustrate here is that it can happen to any of us. Making a bad or wrong investment is very common in the market.
CPF is like forced savings. CPF is faced with so much protest, yet people are signing up for endowment plans to force themselves to save. More ridiculously, these endowment plans do not come with a guaranteed growth. Surely, we know that these endowment plans allow us to withdraw money any time we are in need. They allow withdrawal with a sum of penalty whilst we can enjoy the use of our CPF to buy a house without having to pay a sum of penalty.
Are we starting to behave like some recalcitrant, complaining for the sake of complaining, ignoring the good intentions behind the policies? Like a 2 year old protesting to meal time because the toy right in front of him entices him more but failing to foresee that skipping meals will lead to the discomfort of hunger pangs and possibly gastric problems. We do not have the excuse of being as ignorant as a 2 year old. We cannot just look at the luxury of spending our CPF money now and only think about retirement when the time comes. The phrase “planning for rainy days” should have a familiar ring to all of us, thinking adults.