Did we harm ourselves? Or is it the Government fault?
Like how DTLIM commented, the allowance of more usage has lead us to deplete our CPF money faster than ever. It’s actually quite scary, that Govern allowed CPF savings to pay for more than one property ( Very bad for the low/middle Income group)
Have the Allowance of CPF used for housing a good thing?
There was a study done by the Government as you can see, the average Singaporeans doesn’t shift to a smaller house but always to a bigger house! The number is actually not shocking because we humans are always looking for improvement, aren’t we?
So what do we have to pay when we move house?
- CPF Refund (With accrued interest)
- Resale Levy (Not applicable for DBSS/EC/Resale flats/PRP)
- Range from $15k – $55k
- Outstanding loan
But is all about my CPF… it doesn’t affect me
It does affect you! Being young and powerful, the tendency to spend and spend is inevitable. If the cash that is not used to invest, the probability of you retiring comfortably is very low. The sad truth is that, many Singapore are not financial literate and very pessimistic (good & bad thing).
REMEMBER, when you purchase a new house – Renovation will be the next big cost and it always tend to be in the 5 digit range… so you think you’re saving from paying with CPF? you might be spending more after all.
For the pessimist: the alternative of using our CPF has to always be greater than the $xxxxxx withdrawal amount when u turn 55. Without using your CPF at all you can withdraw a good 6-7 digit when you’re 55.
Disclaimer : Seek real financial help before acting on all these information as it is really damn biased… but its all factual (I take from government website hor).
Nothing is a guaranteed in life, even insurance companies, big banks (Lehman for example), but it should not stop you from making good financial choice. We are living in a world where risk is inevitable, the only way to win in it, is to have an edge. CPF interest rate is mandate by our government and its own by the country. That gives it a lower probability to be falsified (embezzlement/**** with us) without being caught as compared to a company.