Showing posts with label CPF. Show all posts
Showing posts with label CPF. Show all posts

CPF, Medisave minimum sums raised from July 1

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SINGAPORE: There will be changes to the CPF Minimum Sum, the Medisave Minimum Sum and the Medisave contribution ceiling from July 1.

The CPF Board said the new CPF Minimum Sum will be S$106,000 – up from S$99,600 currently. CPF Members who set aside this amount will get a monthly payout of S$910 from age 64 for about 20 years.

The new Medisave Minimum Sum will be S$29,500, up from S$28,500.

The Medisave contribution ceiling, which is the maximum balance a CPF member may have in his Medisave account, will be raised from the current S$33,500 to S$34,500.

Any amount in excess of this will be transferred to the Special Account if the member is below 55 years old.

The CPF Board said these revisions are to ensure that Singaporeans have sufficient savings for their retirement and to meet their hospitalisation expenses.

The amounts have also been adjusted for inflation.

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CPFIS Account

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If you are not in the loop, this is what gonna happens. Under the new rules, which will take effect on April 1, a CPF member will not be allowed to invest the first $20,000 of his CPF Ordinary and Special accounts savings under the CPF Investment Scheme (CPFIS). Money already invested through the CPFIS will not be affected. A member can still use Ordinary Account (OA) funds for housing, CPF insurance and education schemes.

Wendy and I went to DBS this afternoon to open our CPFIS account. CPFIS account is needed if you want to invest using your CPF money. We have decided to invest our CPF OA in unit trust before the amount gets locked in. With regards to which UT to purchase, we are still doing our due diligence. I am leaning towards the Infinity Index Fund by Lion Capital due to the low expense ratio and its an equity fund! I love equity.

What is Index fund? (Extracted from Wikipedia)

An index fund or index tracker is a collective investment scheme (usually a mutual fund) that aims to replicate the movements of an index of a specific financial market, or a set of rules of ownership that are held constant, regardless of market conditions.
I have already got Wendy to open her unit trust account at Fundsupermart, Singapore's No.1 Unit Trust Distributor. While I am handling most of our unit trust/shares investment, Wendy is in charge of our wine investment which she has more extensive knowledge than me. You can visit her blog at http://winelov3r.blogspot.com. (note: this is not a paid review :P)

 

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Singaporeans need to boost their investment literacy: financial expert

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SINGAPORE : Community Development Minister Dr Vivian Balakrishnan says Singaporeans lack financial and investment knowledge.

And he says this is one area the Ministry will have to focus on - which a financial planning expert agrees.

Thousands of senior citizens and their families thronged the inaugural Silver Industry Exhibition.

Many came to check out innovative products and services that cater specially for the silver-haired.

Some also took opportunity to find out if they are 'retirement ready'.

Dr Balakrishnan, who opened the exhibition, says the huge turnout is a good sign that Singaporeans recognise that ageing is an important area worth paying attention to and investing in.

But retirement financial planning is one large area which he feels Singaporeans could brush up on.

He says: "The level of financial knowledge in Singapore is still inadequate. So I'm also glad that we also have several booths in this exhibition which will hopefully give more information to people so that they can make informed choices.

"Or if they don't have enough knowledge on their own at least they know where to go for help, who to ask, who to rely on for financial advice - so this is another large area which we in the Ministry will have to focus on - which is to increase the level of fiscal and financial understanding and knowledge in Singapore."

One expert in financial planning says Singaporeans need to make their CPF savings work harder by keeping a sensibly diversified portfolio of investments.

Arun Abey, Head of Strategy, AXA Asia Pacific Holdings, Australia, says: "The CPF scheme in Singapore has been a marvellous innovation and periodically it's been adapted and modified and those modifications are good. What Singaporeans need to understand is that they cannot simply rely on CPF.

"Nor should they be looking to the government to bail them out. We need to take more personal responsibility for the quality of our retirement - so we need to supplement CPF savings one, and secondly, we need to make our CPF savings and other sources of savings work much harder."

Mr Arun says if Singaporeans could capture from their CPF savings an additional 5 percent return - over and above the inflation rate, when compounded over a working lifetime, even an average worker could be a million dollars richer at retirement!

He adds: "An extra million dollars in their retirement fund. That makes a lot of difference - just an extra 5 percent by investing in a globally-diversified portfolio shares, rather than keep it in cash. That's what we need to learn!"

The key is to start early, plan long term, and invest more in equities but Singaporeans tend to be risk-averse.

So learning how to invest smartly, is what makes the difference between a million-dollar retirement, and one spent worrying about funding the golden years. - CNA/ch

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CPF : Money Got Enough?

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Video animation highlighting the key changes that will help Singaporeans work longer and save enough for retirement.


 

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New CPF Interest Rate

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For more information, please visit CPF web site.

 

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All CPF members to receive higher interest payments

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SINGAPORE: Under a new system announced in Parliament on Monday, all CPF members will receive higher interest payments.

Manpower Minister Dr Ng Eng Hen said about 70 percent of all CPF members will benefit from a new scheme in which a 1 percentage point additional bonus interest will be paid on the first S$60,000 in a CPF member's combined accounts.

Up to S$20,000 of this amount may be from the Ordinary Account.

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My Investment Philosophy

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A person who supposingly claimed that he/she was my ex classmate (see the chat box), recommended me to the Manulife Golden Regional China Fund. And I thought I would just share some of my investment philosophy here.

First, some basic informations about the Central Provident Fund (CPF) that every Singaporeans should know. It consists of 3 accounts, the Ordinary Account, Special Account and the Medisave Account.

Ordinary Account - the savings can be used to buy a home, pay for CPF insurance, investment and education.

Special Account - for old age, contingency purposes and investment in retirement-related financial products.

Medisave Account - the savings can be used for hospitalisation expenses and approved medical insurance.

Your CPF savings earns interest. The CPF Interest Rates are reviewed quarterly. Currently, savings in the Ordinary Account earn a minimum interest rate of 2.5% per annum, while savings in the Special and Medisave Accounts earn additional interest of 1.5 percentage points above the prevailing Ordinary Account interest rate.

Next, CPF OA only allows us to invest up to 35% of our account into shares, property funds etc. You can refer to here for more information.


Hey my ex classmate, due to the above fact, I will only buy UT when I have accumulated enough in my CPFIS-OA. As for my spare cash, I prefer to read up annual reports to buy undervalued business. Thanks for your recommendation anyway and I do not have the luxury of $5000 cash for its initial minimum investment. :)

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