Some facts for people who retire after 2013 ...

"From 1 January 2009, members who reach 55 can only withdraw 40 percent of their Special and Ordinary Account balances, and then the remaining balances, if any, after they have met the CPF Minimum Sum and the Medisave Required Amount in the Medisave Account. This percentage of withdrawal will go down by 10 percentage points each year."

- source: www.cpf.gov.sg

1. If you will to retire after 2013, you can no longer take out 50% of your CPF money. You can only take out the excesses of OA and SA after you have met the Minimum Sum of $120,000. Medisave Minimum Sum is currently at $30,000.

• The last date that allows members to take out 50% is 31 December 2008.

2. The Minimum Sum you set aside will determine your payout for 20 years after your retirement. Currently, the monthly payout starts at the statutory retirement age of 62. An alternative is to purchase a Annuity. It's not a popular choice though.

3. Recently, there are recommendations to extend the retirement age beyond 62, which means to say,

• the monthly payouts will start at a later age
• people may need to continue working if they
  
• do not have enough savings;
• do not meet the Minimum Sum requirements

All these may catch most people unaware and deliver a big impact to them.

Tricks that people can play on your credit card

CREDIT CARD SCENE 1
A friend went to the local gym and placed his belongings in the locker. After the workout and a shower, he came out, saw the locker open and thought he had locked the locker. He dressed and flipped the wallet to make sure all was in order - all cards were in place. A few weeks later his credit card bill came at a whopping $14,000! He called the credit card company and told them he did not make the transactions. Customer care verified there was no mistake in the system and asked if his card had been stolen. When he checked again, a switch had been made with an expired similar credit card from the same bank. The thief switched cards on him.

Verdict: The credit card issuer said since he did not report the card missing earlier, he would have to pay the amount owed to them. Small amounts rarely trigger a "warning bell" with some credit card companies. It just so happened that all the small amounts added up to one big one!

CREDIT CARD SCENE 2
A man at a local restaurant paid for his meal with his credit card. The bill for the meal came, he signed it, the waitress folded the receipt and passed the credit card along. Usually, he would just take it and place it back in his wallet. This time, he took a look at the card and saw it was the expired card of another person. He called the waitress and she looked perplexed. She apologized and hurried back to the counter under the watchful eye of the man. All the waitress did while walking to the counter was wave the wrong expired card to the counter cashier, and the counter cashier immediately looked down and took out the real card. No exchange of words --- nothing! She took it and came back to the man with an apology.

Verdict: Make sure the credit cards in your wallet at yours. Check the name on the card every time you sign for something or when the card is taken away for even a short period of time. Any people just take back the credit card without even looking at it, assuming it is theirs.

FOR YOUR OWN SAKE, DEVELOP THE HABIT OF CHECKING YOUR CREDIT CARD EACH TIME IT IS RETURNED TO YOU AFTER A TRANSACTION!

CREDIT CARD SCENE 3
I went to a pizza restaurant to pick up an order that I had called in, paying by Visa Check Card which is linked directly to my checking account. The young man behind the counter took my card, swiped it, then laid it flat on the counter, waiting for the approval - standard procedure. While waiting, he picked up his cell phone and started dialing. I heard a click that sounded like my phone does when I take a picture. He gave me back my card but kept the phone in his hand as though still pressing buttons. I wondered what he was taking a picture of until it dawned on me that the only thing there was my credit card. About five seconds later, I heard the chime that tells you the picture has been saved. Needless to say, I immediately canceled that card as I walked out the pizza parlor. Beware of phones because many people have camera phones these days. Also, the waiter brings your card and receipt to sign, make sure you scratch the number off. Some restaurants use only the last four digits, but a lot of them are still putting the whole thing on there.

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Sharing this useful info which I got from a friend ;)

Equities seen as a short term investment?

This afternoon, I was taken aback by a friend's remark:

"My agent said that equities is the best for short term investment and that I'll be able to enjoy the maximum returns possible."

That's a BIG misconception ... ... well, I think that may happen only AND only if the market is verrrry bullish. But then, how big is the chance?

And what if you have an urgent need of cash and decides to sell within a year of purchase, when the equities aren't performing? That's a big problem. Isn't it? Which is why equities should never be looked upon as a short term investment.

I shared with her, that for equities, you never know when it's going to rise or fall. As the equities' performance will be largely dependent on market conditions, companies performance, and world events; how is it possible for anyone to know whether the market is going up or down? Anyone can predict. But who knows for sure?

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Personally, I think that even if the individual is a risk-taker, he shouldn't have the perception that equities are suitable as a short term investment, as this may result in unexpected cashflow problems.

Having a portfolio consisting of equities and bonds may be a better idea. Diversification and asset allocation is definitely one of the key to successful investing.

Retirement in Singapore

The CPF Minimum Sum is currently set at $92,000 from July 1, 2006 and will be raised gradually until it reaches $120,000 in 1 July, 2013. (Source: www.cpf.gov.sg)

The Minimum Sum is supposed to last 20 years from the statutory retirement age of 62.

TWO potential problems may arise from this:

1. How many Singaporeans are able to hit the Miniumum Sum? Especially after paying for their kids' education & HDB loans.
   
   Which is perhaps why there are so many retirees still working at fastfood restuarants, food courts, as cleaners, etc. I doubt that most of them are working to kill time. Given a choice, I believe most of them would rather go for a holiday, look after their grandchilds, or do any leisure stuff, after working for at least half their lifetime.
   
   
2. For those who are able to meet the Minimum Sum of $120,000* when they retired in 2013.
   

A huge question mark looms over their heads - Is it enough for retirement? To last for 20 years? For simplicity, if you do a calculation without inflation and interest accrued on the $120,000, you will realise this:

$120,000 for 20 years
--> $6,000 for 1 year
--> $500 for 1 month

Is $500/month enough for a retiree? Would this $500 be able to cover for medical care, expenses, food, utilities, transport costs? What kind of lifestlye will he be leading?

What kind of lifestyle do you want?