Most people who did not withdraw their CPF which they could after age 55, may have done so for reasons other than what the CPF Board wants us to believe?

I refer to the article “6 in 10 tapped into CPF funds after 55: CPF Board” (Channel NewsAsia, Aug 28).

It states that “About six in 10 people who were eligible to make withdrawals from their Central Provident Fund (CPF) did so upon turning 55.

A subset of the respondents, totalling 7,200 people who are CPF members aged between 55 and 70, were asked if they had made cash withdrawals from CPF after turning 55 years old.

About four in 10 respondents said they did not make any cash withdrawals after turning 55.”

As to “A sizeable proportion did not make withdrawals after turning 55 years old, hence allowing their funds to continue earning higher CPF interest rates compared to bank savings deposit rates,” the CPF Board said” – some of the reasons why some may not withdraw are:

… they may not be aware that money that can be withdrawn, but not withdrawn only earn 2.5% interest, and not the 4% in the Retirement Account

… if you log in to your CPF account – there is no reminder that you have money which you ‘chose’ not to withdraw

… the CPF Board does not write to you say every year, to tell you that you have money which you have ‘chosen’ not to withdraw

… you may not be aware that at 2.5% – it is the lowest real rate of return of all national pension funds in the world, since 1999

With regard to “According to the CPF Board, those who withdrew from their CPF funds – 58 per cent of members – took out a median amount of S$9,000. The average amount withdrawn was S$33,000” – why is the median amount ($9,000) so low?

In respect of “More than half of those who withdrew the money deposited it in a bank or finance company, said the CPF Board.

The median amount deposited was about S$8,000, added the board.

This trend of leaving withdrawals in bank savings accounts could “indicate a desire for liquidity” in the older cohorts as members could only make one withdrawal a year prior to 2014, the CPF Board said.

CPF withdrawal rules have since relaxed and members can receive their withdrawals within a day through PayNow” – why didn’t the study do the obvious – which is to separate the findings of older and younger members?

Also, why wasn’t the obvious question asked – did you withdraw because of ‘liquidity’ concerns? Do you know that the policy has changed to ‘can withdraw anytime and as frequently as you like’?

As to “Forty per cent of those who withdrew funds said they used the money for immediate needs like household expenses and loan repayments.

The board noted that respondents in this group had more children on average or reported poorer health as compared to the rest of the people polled. Some had used the funds for their children’s education expenses.

“A relatively higher proportion of members in this group also reported poorer health status, with some indicating that the funds withdrawn had been used to pay for medical expenses,” the board said” – is this possibly an indication that many elderly persons may be so cash-strapped (medium withdrawal only $9,000) that ‘healthcare may not be so affordable after all’?

With regard to “The survey also revealed that about 16 per cent of CPF withdrawals was used on big-ticket items like overseas trips or home renovations. However, it was noted that a larger proportion of the respondents in this group were employed at the time of the survey.

Some of them could have viewed the accessibility to their CPF funds as “a source of additional funds to spend on big-ticket items to benefit themselves and their family”, the board said” – could this be an indication that many elderly employed may have such low savings and salaries that they had to rely on the ‘$9,000 median withdrawal” to spend on “big-ticket items like overseas trips or home renovations”?

 

“The common uses of CPF cash withdrawals according to a study cited by the CPF Board. (Image: CPF Board)”

Perhaps the CPF Board should use an independent party to analyse the study’s data – otherwise, as some of my friends said “aiyah, we find these quite hard to believe lah – got bias, got conflict of interest or not”?

 

Leong Sze Hian

 

 

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9 Responses to “Most people who did not withdraw their CPF which they could after age 55, may have done so for reasons other than what the CPF Board wants us to believe?”

  • RDB:

    pee and poo gagament news is mostly politically motivated one way or another.

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  • What are you doing LSH?:

    Hello your article may lead to confusion and misconception that the whole of CPF sum can be withdrawn after 55.

    To be specific, you can only withdraw the sum over and above the minimum CPF amount set by the government at 55 with the bulk of money still being held up by them.

    Many people may not have enough, that may be the reason why they cannot withdraw it after 55.

    What are you doing LSH?

    I withdraw mine [the bulk still be held] because I lost trust. Depositing in the Bank is a after-action but not the reason. I think some of the [51%] may be the same reason as mine.

    Things are pretty much inflated; GP consultation fees, Bin Centre, HDB land appears to be more expensive than Free hold land etc… I run quick quick before bubble burst.

    What are you doing LSH?

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  • Pakatan Singapura:

    it is called talking half truth.

    the CPF portion which clown pap and S$m gang cannot hold back, there is no need to withdraw. the maxim is, always do the opposite of what pap says. if pap says cannot withdraw, die die must withdraw, even if need to pledge 99 years rented HDB. but if pap says you can withdraw, then, no rush to withdraw since pap never says nor does anything that is not beneficial to pap coffer.

    the CPF portion which clown pap and S$m gang forcefully trying to keep full amount CPFlife, this one as much as possible must withdraw. just a few days ago, it is established the interest earned on this portion of CPF account does not belong to CPF member upon death. it belongs to the CPFlife pool. we laugh at sheep who signs another cheque to top up CPFlife amount thinking the interest thereof is good when it is actually NIL kosong zero when sheep dies.

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  • Bobo:

    When demand for repayment on education loan and house instalment repayment, they are super quick to react. CFP board is selling what ko-yo we really have to find out. Frankly speaking, for decades, the bochaps do not know how much money they have with CPF board. Why? Majority of non educated elderly do not know who to approach for help. Even their own children were also not aware that their parents got money with CPF board cause they never receive information from CPF board.

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  • CPF Board - Be Kinder Please!:

    It is the CPF Members’ hard earned monies!

    They toiled many years before reaching Age 55.

    Majority of them draw ‘mediocre’ salaries!

    If they draw million$, they won’t make noise: no Ministers made noise right?

    Help them especially the ‘Mediocre Generation’, they contributed a lot towards Nation Building.

    Help them please!

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  • grateful:

    Grateful for my CPF which I withdrew to pay off some of my horrendous debts; debts incurred through lavish lifestyles and stupidity to buy cars in Sg.

    Do not make my mistake – do not borrow to live beyond your means and if you have a family to support, and are not earning at least 5 figures, do not buy cars.

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  • nihon:

    all fake sgs who became imported voters will again vote papigs simply cos they want their cpf and will renounce their citizenship.

    many mfs prs have done so and retire in their 3rd wold trash, living likes kings and queens. most abbns and fucking tiongs are and will be doing so. like locusts they came and stole our jobs and hdb and healthcare. without serving a day in ns + reservists.

    lastly cpf is NOT your money!

    fiack the tiongs fiack the abbns and peenoise and boomas.

    did you vote wisely?

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  • N.Jungne:

    Stick to its rules and regulations of the ORIGINAL set up. Don’t suka-suka change to suit the Gabramen.

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  • Interest Rate:

    Quote: .. you may not be aware that at 2.5% – it is the lowest real rate of return of all national pension funds in the world, since 1999 ..
    It’s not realistic to compare what other national pension fund could offer ..
    just turn back and see it yourself what Singapore bank can offer you ..

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