WEBVTT - Love it or loathe it: How to make the CPF work for you | EP 4 0:00:00.000 --> 0:00:02.320 this is a C. N A podcast. 0:00:04.220 --> 0:00:06.010 So, Adam, in a few words, can you give us 0:00:06.010 --> 0:00:09.750 your thoughts about the following, investing through CPF, 0:00:09.760 --> 0:00:10.820 make sure you know what you're doing 0:00:10.830 --> 0:00:12.789 retirement age in Singapore. 0:00:12.800 --> 0:00:16.250 I think it's fine, 0:00:17.579 --> 0:00:19.049 we'll get there eventually. 0:00:20.270 --> 0:00:24.040 one thing you'd change about CPF if you could 0:00:24.050 --> 0:00:28.910 higher interest rate, but you know, that would come with 0:00:28.910 --> 0:00:30.330 implications as well. How 0:00:30.330 --> 0:00:31.990 about topping up your CPF? 0:00:32.000 --> 0:00:34.209 Yeah, definitely. If you can do it, why not? 0:00:34.220 --> 0:00:38.409 How about the fire movement? Financial Independence, retire early, 0:00:38.420 --> 0:00:40.029 make sure you got your plans right. 0:00:57.490 --> 0:01:00.580 The Central provident Fund or CBF has been a huge 0:01:00.580 --> 0:01:03.900 part of our lives, especially during major life decisions, like 0:01:03.900 --> 0:01:07.050 buying a house, paying for medical bills and securing funds 0:01:07.050 --> 0:01:11.209 for retirement. But CBF can be a complex beast, loved 0:01:11.220 --> 0:01:14.240 by some and hated by others. While there may be 0:01:14.240 --> 0:01:17.150 no escape to pay deductions, experts say we can make 0:01:17.150 --> 0:01:18.600 the most of the scheme 0:01:19.000 --> 0:01:21.760 in this episode. We work through the maths and unravel 0:01:21.760 --> 0:01:24.789 the myths surrounding CPF with the help of our guest, Adam. 0:01:24.790 --> 0:01:28.080 Wong Adam is the editor in Chief of the fifth person, 0:01:28.090 --> 0:01:32.820 a financial literacy and investment website. So, Adam, let's just 0:01:32.830 --> 0:01:33.890 get straight to it. 0:01:33.900 --> 0:01:34.760 Sure, 0:01:34.880 --> 0:01:38.350 CPF is a fact of life here in Singapore and 0:01:38.450 --> 0:01:41.760 some are for it. Some are against it. But how 0:01:41.760 --> 0:01:43.780 should we approach CPF? 0:01:44.300 --> 0:01:47.370 I think CPF is here to stay. I mean, whether 0:01:47.370 --> 0:01:49.170 you like it or not. I think a lot of 0:01:49.170 --> 0:01:52.390 controversy or surrounding CPF, you get the most headlines out 0:01:52.390 --> 0:01:55.000 of that. I think the majority of people in Singapore. 0:01:55.000 --> 0:01:56.760 I think they work with the C. P. F. As 0:01:56.760 --> 0:01:59.450 in it's a system that it's here to stay, it's 0:01:59.450 --> 0:02:02.280 been around for a long time and whether you have 0:02:02.280 --> 0:02:05.080 your complaints about it or not, it's something that you 0:02:05.080 --> 0:02:07.120 have to work with. And I think there are benefits 0:02:07.120 --> 0:02:10.700 to the CPF that you can definitely make use of 0:02:10.710 --> 0:02:13.750 and use it as part of your financial planning. 0:02:13.950 --> 0:02:16.390 Yeah. What are the benefits? And let's start with that. 0:02:16.400 --> 0:02:19.320 I think the most obvious one is that its interest 0:02:19.320 --> 0:02:21.130 rate is pretty good. I mean if you go to 0:02:21.130 --> 0:02:25.130 the bank right now, fixed deposits in Singapore have been, 0:02:25.139 --> 0:02:27.560 the rates have not been great for the longest time. 0:02:27.560 --> 0:02:43.530 It's always been less than 1%. 0:02:43.700 --> 0:02:46.489 I think that's a great option for people out there. 0:02:46.500 --> 0:02:49.580 Even if you go into the stock market, the bond market, 0:02:49.590 --> 0:02:52.630 it's not easy to find a risk free instrument that's 0:02:52.630 --> 0:02:56.980 backed by the Singapore government for 4% interest per annum. 0:02:56.990 --> 0:02:58.840 I think that's the main thing that we have as 0:02:58.840 --> 0:03:01.160 Singaporeans that we should make use of. 0:03:01.430 --> 0:03:04.700 You mentioned that it is risk free. Can you explain 0:03:04.700 --> 0:03:07.419 to us like how it can be considered at risk 0:03:07.639 --> 0:03:10.860 for many of us, we won't be touching this money 0:03:10.860 --> 0:03:14.019 until like when we're in our sixties, that's decades away, 0:03:14.030 --> 0:03:16.310 right? So when I say risk free, it comes from 0:03:16.310 --> 0:03:19.020 an investment perspective. So if you go invest money in 0:03:19.020 --> 0:03:22.360 the stock market, even with bonds of property, there's risk involved, 0:03:22.370 --> 0:03:24.660 right prices can come up, they can come down, you 0:03:24.660 --> 0:03:27.380 might lose money in your investment. So technically 0:03:27.520 --> 0:03:30.010 you shouldn't lose money in your CPF. The risk you 0:03:30.010 --> 0:03:32.620 have is that you have to trust that the government 0:03:32.630 --> 0:03:35.260 will continue to run things as well as they have 0:03:35.260 --> 0:03:38.170 done for the last many decades. Right? And the policy 0:03:38.170 --> 0:03:40.510 doesn't change. So there's policy risk in that sense. 0:03:41.030 --> 0:03:44.430 But when it comes to investment risk, it's technically risk free. 0:03:44.430 --> 0:03:46.750 You don't risk losing your money in the CPF Yes, 0:03:46.750 --> 0:03:50.050 there are restrictions in the CPS system. You can't redraw 0:03:50.060 --> 0:03:52.570 everything at 55 but the money is still yours and 0:03:52.570 --> 0:03:54.130 it goes back to you through the form of a 0:03:54.140 --> 0:03:57.470 monthly payments when you retire. So it's risk free in 0:03:57.470 --> 0:03:59.050 that sense. Um 0:03:59.060 --> 0:04:01.820 I guess trust that you said is important and 0:04:02.040 --> 0:04:04.380 you can also look at history, I guess and see 0:04:04.380 --> 0:04:09.100 how it has been quite consistent. But these deductions, of course, 0:04:09.100 --> 0:04:12.610 we can't opt out of them, right? It is required. 0:04:12.620 --> 0:04:15.800 And at the same time we don't actively manage our 0:04:15.800 --> 0:04:18.339 CPF money because someone else does it for us. But 0:04:18.339 --> 0:04:21.390 sometimes that also means that we don't really check it. 0:04:21.425 --> 0:04:24.575 Don't read about it, we don't care about the details 0:04:24.575 --> 0:04:27.045 because it's someone else's problem and we'll think about it 0:04:27.045 --> 0:04:29.815 when they were older. So some might think that, you know, 0:04:29.815 --> 0:04:31.985 I put money in it, I'll get it, I'll check 0:04:31.985 --> 0:04:34.455 it when I'm older. So how do you think people 0:04:34.455 --> 0:04:39.335 can maximize CPF, even if they're decades away from getting 0:04:39.335 --> 0:04:41.094 their hands on that money? 0:04:41.105 --> 0:04:44.105 I think that's the best time to maximize the use 0:04:44.105 --> 0:04:46.285 of CPF when you're much younger and you're such a 0:04:46.295 --> 0:04:48.360 long runway to grow. I mean if you're 0:04:48.500 --> 0:04:51.070 Near 55 and you don't have a lot of time 0:04:51.070 --> 0:04:52.830 to grow your money if you haven't been putting money 0:04:52.830 --> 0:04:55.650 in the CPF over the last, you know, many decades. 0:04:55.660 --> 0:04:58.120 So if you're young and you want to contribute to 0:04:58.120 --> 0:05:00.790 the CPF, I think it's an option. I would treat 0:05:00.790 --> 0:05:03.450 it like a bond actually, because bonds out there, they 0:05:03.450 --> 0:05:06.670 pay you a fixed interest rate is technically safe in 0:05:06.670 --> 0:05:10.159 that sense. But bonds have their own risk as well. 0:05:10.160 --> 0:05:14.110 You have to understand the company's financial position and their 0:05:14.110 --> 0:05:16.029 bonds that have defaulted as well. 0:05:16.200 --> 0:05:20.099 So this is arguably a safer instrument that pays you 0:05:20.100 --> 0:05:22.570 a 4% interest rate and you can treat it as 0:05:22.570 --> 0:05:25.589 part of your bond portfolio. I know of many Singaporeans 0:05:25.589 --> 0:05:27.719 who just decide not to invest in bonds and just 0:05:27.730 --> 0:05:31.150 invest in the CPF as their bond portfolio if you're young, 0:05:31.160 --> 0:05:33.040 that's the best time to maximize because you have a 0:05:33.040 --> 0:05:34.980 lot of time to grow and compound the money that 0:05:34.980 --> 0:05:37.850 you have and yes, of course the part of it 0:05:37.850 --> 0:05:39.800 has to stay inside when you turn 55 0:05:40.000 --> 0:05:43.789 But then I think that is crucial anyway because we've 0:05:43.790 --> 0:05:47.029 heard so many horror stories of Singaporeans who once they 0:05:47.029 --> 0:05:50.070 turn 55 to withdraw a big sum from the CPF 0:05:50.080 --> 0:05:52.670 and it just goes away in a few years. So 0:05:52.670 --> 0:05:54.450 I think the government is doing the best to protect 0:05:54.450 --> 0:05:56.940 as many people as they can by providing some level 0:05:56.940 --> 0:05:58.800 of income all the way to the end of your 0:05:58.800 --> 0:06:01.330 life to make sure that you're taken care of. 0:06:01.360 --> 0:06:03.350 Yeah, I guess one side of it too is some 0:06:03.350 --> 0:06:06.140 people feel like they are not being trusted with their 0:06:06.150 --> 0:06:07.100 own funds 0:06:07.365 --> 0:06:11.105 because this restriction is enforced upon them when it comes 0:06:11.105 --> 0:06:13.664 to saving for their retirement. 0:06:13.675 --> 0:06:15.805 I totally hear that, I mean my mom used to 0:06:15.805 --> 0:06:18.895 complain about the CPF. So I grew up thinking that 0:06:18.895 --> 0:06:21.935 the CPF was a restriction that the government put on 0:06:21.935 --> 0:06:24.875 people and there are restrictions of course in any system. 0:06:24.885 --> 0:06:27.115 So I used to think for the longest time that 0:06:27.115 --> 0:06:30.464 the CPF was just keeping our money from us. When 0:06:30.464 --> 0:06:33.070 I grew up, I realized that I can't change the system, 0:06:33.279 --> 0:06:35.740 it's here to stay and actually if you're self employed, 0:06:35.740 --> 0:06:38.260 you don't have to contribute CPF is not forced in 0:06:38.260 --> 0:06:40.770 that sense you do if your employee with a salary 0:06:40.770 --> 0:06:42.599 and all that you do still have to pay your 0:06:42.600 --> 0:06:45.200 money safe. So back to my anecdote, I remember when 0:06:45.200 --> 0:06:49.070 I was self employed income and I just had this 0:06:49.070 --> 0:06:50.840 mindset that I just didn't want to put any money 0:06:50.839 --> 0:06:52.830 in the CPF, I want full control of my money, 0:06:53.210 --> 0:06:55.840 which is a good thing too. And then I realized 0:06:55.839 --> 0:06:58.590 that I ended up paying a lot in texas because 0:06:58.600 --> 0:07:01.110 I didn't put in the CPF there and the CPF 0:07:01.110 --> 0:07:04.260 helps you to reduce your taxable income as well. So 0:07:04.260 --> 0:07:07.930 between the choice of paying taxes or putting money in 0:07:07.930 --> 0:07:11.260 my CPF account which grows interest, I would put money 0:07:11.260 --> 0:07:13.360 in the CPF now that I know better when I 0:07:13.360 --> 0:07:15.650 was much younger as well. So 0:07:16.030 --> 0:07:18.980 yes, there are restrictions, but I will make the most 0:07:18.980 --> 0:07:20.760 use of it. And I think the benefits in the 0:07:20.760 --> 0:07:21.630 CPS system, 0:07:21.640 --> 0:07:25.600 you mentioned taxes. Can you explain to us how CPF 0:07:25.610 --> 0:07:27.510 can help you in the tax front? 0:07:27.520 --> 0:07:30.620 So basically when you make income, there's income tax rate 0:07:30.620 --> 0:07:33.000 you pay that every year to the I. R. S. 0:07:33.010 --> 0:07:35.350 The more you make, the more you pay in taxes. 0:07:35.360 --> 0:07:38.830 But then when it comes to calculating your taxable income, 0:07:38.840 --> 0:07:41.680 they also take into account the CPF contributions that you 0:07:41.680 --> 0:07:42.780 made throughout the year. 0:07:43.010 --> 0:07:45.250 So based on the CPF contributions that you've made, they 0:07:45.250 --> 0:07:48.690 deduct that portion from your taxable income and then what's 0:07:48.690 --> 0:07:52.430 left that's taxable becomes lower. So your taxes reduced as 0:07:52.430 --> 0:07:54.630 a result. So I mean it depends on how much 0:07:54.630 --> 0:07:57.400 you make as an individual because there's a limit to 0:07:57.410 --> 0:08:00.890 how much you can reduce your taxes by. But it 0:08:00.890 --> 0:08:03.610 definitely helps. You can basically go to the CPF website 0:08:03.610 --> 0:08:05.020 and they tell you all the I. R. S. Website 0:08:05.020 --> 0:08:05.510 as well 0:08:05.880 --> 0:08:08.450 every single year when you make your submissions they will 0:08:08.450 --> 0:08:10.880 tell you exactly what your taxable income is. So the 0:08:10.880 --> 0:08:13.030 first thing that they do is that what is your 0:08:13.040 --> 0:08:15.370 income that you made? Does the headline figure? And then 0:08:15.370 --> 0:08:17.660 you have your deductions? Right? So maybe you have your 0:08:17.660 --> 0:08:20.000 text relief because you're an N. S. Man because you're 0:08:20.000 --> 0:08:22.860 a parent or because you're a caregiver. So if you 0:08:22.860 --> 0:08:25.040 make donations to charities and all that stuff. So these 0:08:25.040 --> 0:08:25.980 are deductions 0:08:26.270 --> 0:08:30.010 that go into reducing your taxable income anyway. And CPF 0:08:30.020 --> 0:08:32.710 is part of that deduction as well. So it reduces 0:08:32.710 --> 0:08:35.890 your taxable income. So what's left over is the amount 0:08:35.900 --> 0:08:38.770 that can be taxed. So based on that amount 0:08:39.070 --> 0:08:42.760 then the ras will calculate what your taxes based on 0:08:42.760 --> 0:08:45.709 that new taxable amount. So the CPF helps to reduce 0:08:45.710 --> 0:08:48.980 that when you contribute CPF amounts. 0:08:48.990 --> 0:08:51.560 Is that for everyone or just if you top up 0:08:51.570 --> 0:08:55.760 it's for everyone. So even your regular monthly CPF contributions 0:08:55.770 --> 0:08:56.559 go to that. 0:08:56.809 --> 0:08:58.709 And of course if you do the cash top up 0:08:58.720 --> 0:09:02.429 as well up to $8,000 every year, there's a tax 0:09:02.429 --> 0:09:05.810 relief on that as well and for most people it 0:09:05.809 --> 0:09:07.610 just makes sense to put money in your CPF rather 0:09:07.610 --> 0:09:08.900 than pay taxes. Right? 0:09:08.910 --> 0:09:11.420 You mentioned your mom earlier has she had a change 0:09:11.420 --> 0:09:12.230 of heart? 0:09:12.240 --> 0:09:15.209 She did take her money and her complaint was that 0:09:15.220 --> 0:09:17.240 at that point the time they called it, the minimum 0:09:17.240 --> 0:09:22.459 sum was $80,000 today. It's about $192,000 as of this 0:09:22.460 --> 0:09:23.140 year I think. 0:09:23.460 --> 0:09:25.590 So it's called the fr s not full retirement some 0:09:25.590 --> 0:09:28.920 so my mom's gripe was that that $80,000 was something 0:09:28.920 --> 0:09:31.730 that she could never touch. That was a complaint. Everything 0:09:31.730 --> 0:09:34.070 else she had above that she took out and she 0:09:34.070 --> 0:09:36.640 had no complaints about that. So she was complaining about 0:09:36.640 --> 0:09:38.090 that $80,000. 0:09:38.280 --> 0:09:40.929 But I look at my mom today and she has 0:09:40.929 --> 0:09:43.230 this stream of income from the CPF every single month 0:09:43.230 --> 0:09:45.730 that supplements her income and it's been really useful for 0:09:45.730 --> 0:09:48.270 her in her retirement. I don't know if she agrees 0:09:48.270 --> 0:09:50.490 with it nowadays, but the way I look at it 0:09:50.490 --> 0:09:54.100 and the way she's managing her finances, the CPF income 0:09:54.100 --> 0:09:55.310 for her has been very very 0:09:55.309 --> 0:09:59.679 useful and that's an issue to the raising of the minimum. 0:09:59.679 --> 0:10:01.700 Some that you mentioned because some people look at it 0:10:01.700 --> 0:10:04.040 and go, oh no, now I have to put even 0:10:04.040 --> 0:10:07.130 more money in in the CPF 0:10:07.320 --> 0:10:10.670 and it could be quite worrying for some because there 0:10:10.679 --> 0:10:13.360 are tweaks that are made along the way. 0:10:13.370 --> 0:10:17.439 Yes, that's true. So yes, this raising of the minimum 0:10:17.440 --> 0:10:20.860 some of the full retirement, some is another common complaint. 0:10:20.870 --> 0:10:23.220 I mean I totally understand that it feels like if 0:10:23.220 --> 0:10:26.470 it's something that feels very far away and every few 0:10:26.470 --> 0:10:28.880 years or so they raise it, then you're gonna feel 0:10:28.890 --> 0:10:33.090 the goalpost keeps shifting and they have explained this before 0:10:33.090 --> 0:10:35.420 that it has to keep up with inflation 0:10:35.650 --> 0:10:38.280 And the cost of living expenses. So just take my 0:10:38.280 --> 0:10:41.730 mother's example if they never raised it and your retirement, 0:10:41.730 --> 0:10:44.350 some today is $80,000 and that's all you need to 0:10:44.360 --> 0:10:46.970 put aside your CPF, let's say for me, I'm like 0:10:46.980 --> 0:10:50.770 probably like 15, 20 years away from my retirement, how 0:10:50.770 --> 0:10:53.910 much is $80,000 going to be worth in that time? 0:10:54.290 --> 0:10:56.550 So it doesn't make sense because then if you can 0:10:56.550 --> 0:10:58.390 return that amount, it's not going to be enough. So 0:10:58.390 --> 0:11:01.930 the government has to increasingly steadily shift up the frs 0:11:01.940 --> 0:11:04.219 to keep in line with inflation. It's just a fact 0:11:04.220 --> 0:11:06.589 of money and investments in general. 0:11:07.010 --> 0:11:11.070 So do you think we should solely rely on CPF, 0:11:11.080 --> 0:11:15.330 is it enough to focus on putting our money in 0:11:15.330 --> 0:11:20.160 CPF and not looking in other investment schemes, investment products? 0:11:20.170 --> 0:11:24.520 My answer would be no, I think CPF alone is 0:11:24.530 --> 0:11:27.360 not enough. I mean, I think there are people who 0:11:27.360 --> 0:11:30.380 just rely on CPF alone. There has been a famous 0:11:30.380 --> 0:11:32.210 example of this gentleman 0:11:32.559 --> 0:11:36.290 that run this one m 65 movement where he advocates 0:11:36.290 --> 0:11:40.040 having one million in your CPF. And then from then on, 0:11:40.040 --> 0:11:42.390 once you've taken care of that base, you can kind 0:11:42.390 --> 0:11:44.550 of relax and then focus on your other investments because 0:11:44.550 --> 0:11:46.949 he knows that whatever happens to him, he always had 0:11:46.960 --> 0:11:49.640 that CPF amount to rely on, he's never gonna get 0:11:49.640 --> 0:11:52.100 busted out. He's always has that you have to take 0:11:52.100 --> 0:11:52.650 care of him, 0:11:52.950 --> 0:11:55.679 that's his philosophy and it makes sense. Some people feel 0:11:55.679 --> 0:11:58.460 that CPF is not good enough. 4% is not good enough. 0:11:58.460 --> 0:12:01.880 I can make more money in the stock market 567 10%. 0:12:01.880 --> 0:12:05.459 And that's entirely possible as well. So I share that approach. 0:12:05.460 --> 0:12:11.520 I think the CPF forms one pillar of your financial portfolio. 0:12:11.530 --> 0:12:13.390 There's so many other options you can consider out there. 0:12:13.390 --> 0:12:17.130 This property, there's stocks, that dividend stocks and stuff like 0:12:17.130 --> 0:12:18.210 that reads as well 0:12:18.450 --> 0:12:21.450 and they all form a basket of investments that you 0:12:21.450 --> 0:12:23.309 can consider and how much you want CPF, how much 0:12:23.309 --> 0:12:25.340 you want, your stocks, depends on your risk profile, your 0:12:25.340 --> 0:12:28.680 financial goals, your investment goals. So the CPF is just 0:12:28.679 --> 0:12:31.480 one tool that you can use it like a lever 0:12:31.480 --> 0:12:34.160 of how much you want to put in CPF and 0:12:34.160 --> 0:12:35.530 the rest of it is really up to you. So 0:12:35.530 --> 0:12:37.890 it's not a black or white thing is like zero 0:12:37.890 --> 0:12:40.260 CPF or all in CPF, it's just one thing you 0:12:40.260 --> 0:12:40.979 can use 0:12:44.679 --> 0:12:47.329 Hi, my name is steve Lie and I'm Teresa Tang 0:12:47.550 --> 0:12:49.920 and we are the hosts of the new podcast, CNN 0:12:49.920 --> 0:12:53.510 correspondent from new york to Bangkok, join us as we 0:12:53.510 --> 0:12:56.540 kick back and chat with our colleagues across the globe 0:12:56.550 --> 0:12:59.599 about the latest news developments. Look out for our weekly 0:12:59.600 --> 0:13:01.870 episodes wherever you get your podcasts. 0:13:06.050 --> 0:13:09.559 How about those who are in the gig economy, who 0:13:09.559 --> 0:13:13.140 are freelancers where they don't have employee contributions, they're not 0:13:13.150 --> 0:13:17.950 required to keep a part of their income in CPF. 0:13:17.960 --> 0:13:21.520 Do you recommend or suggest that they put money into 0:13:21.520 --> 0:13:26.569 CPF or should they go to equities or other investment streams? 0:13:27.120 --> 0:13:29.360 Yeah. This really depends on the individual. So I do 0:13:29.360 --> 0:13:32.250 think I can make recommendations for anyone because it really 0:13:32.250 --> 0:13:36.479 depends on what their goals are, how financially, literally they 0:13:36.480 --> 0:13:38.740 are because investing in the stock market, yes, you can 0:13:38.750 --> 0:13:42.650 earn potentially higher returns, but you have risks and if 0:13:42.650 --> 0:13:44.110 you don't know what you're doing, you can end up 0:13:44.120 --> 0:13:47.600 losing money wherever you are, whether you're self employed and employed, 0:13:47.600 --> 0:13:50.590 all these things have to be balanced out, taking into 0:13:50.590 --> 0:13:53.010 account what makes most sense for you. 0:13:53.200 --> 0:13:55.819 So if you're self employed and you feel that you 0:13:55.820 --> 0:13:59.100 understand what investing in the stock market or the crypto 0:13:59.100 --> 0:14:02.170 market is like and you take care of your risks 0:14:02.179 --> 0:14:05.179 then Yeah, sure. Go ahead. And then you still can 0:14:05.179 --> 0:14:07.600 consider contributing to your CPF because that helps with your 0:14:07.600 --> 0:14:10.219 taxes as well if you don't want that, I would 0:14:10.220 --> 0:14:12.949 treat it as a potential bond as an option that 0:14:12.950 --> 0:14:15.559 you can use if you want to. I'm just totally 0:14:15.559 --> 0:14:18.429 agnostic about these things and just make use of what 0:14:18.429 --> 0:14:19.540 makes more sense for you. 0:14:19.800 --> 0:14:24.790 What about those who are nearing their retirement age? Because 0:14:24.800 --> 0:14:26.920 it's one thing when you're decades away and you still 0:14:26.920 --> 0:14:31.870 have time to recover from any financial losses. Those who 0:14:31.870 --> 0:14:35.550 are a few years away from retirement and maybe they 0:14:35.550 --> 0:14:39.980 haven't really put a whole lot of attention into trying 0:14:39.980 --> 0:14:43.980 to see if they have enough money once they hit retirement. 0:14:43.980 --> 0:14:45.990 What do you think they should do at this point 0:14:45.990 --> 0:14:48.150 to make sure that they are on the right track 0:14:48.550 --> 0:14:52.150 when you're near retirement and then if you don't have 0:14:52.150 --> 0:14:55.250 enough money, I think the reality is you just have 0:14:55.250 --> 0:14:56.350 to continue working. 0:14:56.360 --> 0:14:57.290 Yeah, 0:14:57.300 --> 0:14:59.700 that's true, right? But if you've saved up enough or 0:14:59.700 --> 0:15:02.080 maybe if you're lucky enough, one of your Children are 0:15:02.090 --> 0:15:04.840 so rich, they can take care of you. You know, 0:15:04.850 --> 0:15:06.979 that could happen. And hopefully you have a good relationship 0:15:06.980 --> 0:15:08.230 with that kid 0:15:09.070 --> 0:15:11.920 In any case, if you're older, then your margin for 0:15:11.920 --> 0:15:14.040 error is going to be a lot smaller. You can 0:15:14.040 --> 0:15:19.300 take risks because if one thing wipes you out at 5560, 0:15:19.310 --> 0:15:21.950 it's gonna be really tough. You don't have the energy 0:15:21.950 --> 0:15:24.090 or the opportunities as someone who was 30 years younger 0:15:24.100 --> 0:15:26.800 is different. So you gotta be really careful with that 0:15:26.800 --> 0:15:29.180 and it doesn't just apply to CPF applies to every 0:15:29.180 --> 0:15:30.950 investment that you have out there, you can't be taking 0:15:30.950 --> 0:15:32.130 unnecessary risks. 0:15:32.360 --> 0:15:36.650 So you want to invest in things that are very stable, predictable, 0:15:36.660 --> 0:15:39.220 that suit your risk profile. Maybe something that pays you 0:15:39.220 --> 0:15:41.910 a very stable dividend doesn't give you a very high return, 0:15:41.910 --> 0:15:45.630 but it gives you certainty. So CPF is something like that. 0:15:45.630 --> 0:15:48.010 In fact, I actually have a friend's father who actually 0:15:48.010 --> 0:15:49.660 put more money in the CPF. 0:15:49.810 --> 0:15:52.350 So when he retired, he decided to put more money 0:15:52.350 --> 0:15:54.020 because he just didn't want to take the risk of 0:15:54.030 --> 0:15:55.850 that sum of money that he had to put it 0:15:55.850 --> 0:15:59.150 in the stock market or something. He's not familiar with that. 0:15:59.160 --> 0:16:03.850 But the CPF is something that he understands, it's basically 4% 5% 0:16:03.860 --> 0:16:06.470 up to 56% as well, you know, for some of 0:16:06.470 --> 0:16:08.670 the balances in your CPF account, especially once you cross 0:16:08.670 --> 0:16:11.510 55 as well. So he decided to just put more 0:16:11.510 --> 0:16:14.430 money there because it's something that he understands and he 0:16:14.430 --> 0:16:17.140 trusts and is risk free, like I said, 0:16:17.510 --> 0:16:21.470 and he gets an increased payment out of it every 0:16:21.470 --> 0:16:23.900 single month. So rather than risking his money somewhere, he 0:16:23.900 --> 0:16:26.510 doesn't understand, he decided to just put more money in 0:16:26.510 --> 0:16:27.650 the CPF. 0:16:27.660 --> 0:16:31.010 That's an interesting point there adam. But what do you 0:16:31.010 --> 0:16:33.950 think are the things that are misunderstood when it comes 0:16:33.950 --> 0:16:35.140 to Cp f 0:16:35.150 --> 0:16:36.950 I think what people think about, when it comes to 0:16:36.950 --> 0:16:39.720 being misunderstood about the system is that when you have 0:16:39.720 --> 0:16:41.840 something that's mandatory, people are gonna complain about it. 0:16:42.110 --> 0:16:46.490 What comes most first is that people understand about financial 0:16:46.490 --> 0:16:49.580 literacy about money in general, because I think if you 0:16:49.580 --> 0:16:54.550 don't understand how investments work, how financial planning works and 0:16:54.550 --> 0:16:57.850 all you care about is I want my money back 0:16:57.860 --> 0:17:00.600 then yes, I think you're going to complain about things 0:17:00.600 --> 0:17:02.930 because it's what you see and what you understand. But 0:17:02.930 --> 0:17:05.930 once you become a financial literacy and you understand the 0:17:05.930 --> 0:17:07.740 risk of the markets out there, how can you actually 0:17:07.740 --> 0:17:08.570 make money? 0:17:08.780 --> 0:17:11.180 And then you start to realize that actually 4% from 0:17:11.180 --> 0:17:14.780 the CPF is just another option to you, then you 0:17:14.780 --> 0:17:16.820 can take that into account and go, yeah, alright, I 0:17:16.820 --> 0:17:19.119 think this is pretty reasonable, you can't find that anywhere 0:17:19.119 --> 0:17:22.520 in the world and it's something that's available to Singaporeans. Yeah. 0:17:22.530 --> 0:17:24.880 Then from that perspective, because you have a lot more 0:17:24.880 --> 0:17:27.969 information about financial planning and stuff like that, then you 0:17:27.970 --> 0:17:30.439 would have a different perspective when it comes to CP 0:17:30.440 --> 0:17:31.820 F as an instrument, 0:17:32.420 --> 0:17:35.080 it sounds like what you're saying is even if we 0:17:35.080 --> 0:17:38.510 have CPF and there is that option for us that, 0:17:38.510 --> 0:17:41.720 as you mentioned earlier, pretty risk free, we still have 0:17:41.730 --> 0:17:46.109 to study how investments work and we still have to 0:17:46.109 --> 0:17:49.650 be financially literate, despite having kind of something to fall 0:17:49.650 --> 0:17:50.440 back on. 0:17:50.450 --> 0:17:53.859 I think that's always useful, I think because money is 0:17:53.859 --> 0:17:55.980 a part of our life, Money isn't everything, but it 0:17:55.990 --> 0:17:58.220 really is a part of a life and it's one 0:17:58.220 --> 0:17:59.179 of the life skills that 0:17:59.460 --> 0:18:01.570 It's important to pick up. You don't have to be 0:18:01.570 --> 0:18:04.439 like the best investor in the world or someone who 0:18:04.440 --> 0:18:08.190 makes billions of dollars in that sense. But knowing basic 0:18:08.190 --> 0:18:10.580 things like budgeting, how do I spend my money when 0:18:10.580 --> 0:18:13.060 I park my money? If I have $10,000 today, what 0:18:13.060 --> 0:18:16.070 do I do with it? Those are things that everyone 0:18:16.070 --> 0:18:18.790 through the adult life will go through and they need 0:18:18.790 --> 0:18:20.920 to know what to do with it, because if you 0:18:20.920 --> 0:18:21.780 don't then 0:18:22.330 --> 0:18:24.810 you could really put your money in places that they 0:18:24.810 --> 0:18:28.620 shouldn't be put into and you have scams very dubious 0:18:28.619 --> 0:18:30.950 investment schemes and you hear all these stories of people 0:18:30.950 --> 0:18:31.929 losing money every day 0:18:32.270 --> 0:18:34.070 and you don't want that to happen to you. So 0:18:34.070 --> 0:18:36.340 this is stuff that everyone should learn. 0:18:36.350 --> 0:18:39.580 Do you think we are maximizing this option for us, 0:18:39.580 --> 0:18:42.780 the CPF and all the different types of accounts that 0:18:42.790 --> 0:18:44.250 it comes with, I think 0:18:44.250 --> 0:18:46.580 that really depends on the individual. So people like Mr 0:18:46.580 --> 0:18:48.830 liu like of the one M 65 movement, he does 0:18:48.830 --> 0:18:52.830 his best to maximize his use of the CPF. Some 0:18:52.830 --> 0:18:56.149 people don't, they feel that it's just not a consideration 0:18:56.150 --> 0:18:58.700 for them maybe because they've made so much money elsewhere 0:18:58.880 --> 0:19:01.440 and they have their money and property or something like that, 0:19:01.440 --> 0:19:04.540