Speaker 1: this is a C. N A podcast.
Speaker 1: So, Adam, in a few words, can you give us
Speaker 1: your thoughts about the following, investing through CPF,
Speaker 2: make sure you know what you're doing
Speaker 1: retirement age in Singapore.
Speaker 2: I think it's fine,
Speaker 1: we'll get there eventually.
Speaker 1: one thing you'd change about CPF if you could
Speaker 2: higher interest rate, but you know, that would come with
Speaker 2: implications as well. How
Speaker 1: about topping up your CPF?
Speaker 2: Yeah, definitely. If you can do it, why not?
Speaker 1: How about the fire movement? Financial Independence, retire early,
Speaker 2: make sure you got your plans right.
Speaker 1: The Central provident Fund or CBF has been a huge
Speaker 1: part of our lives, especially during major life decisions, like
Speaker 1: buying a house, paying for medical bills and securing funds
Speaker 1: for retirement. But CBF can be a complex beast, loved
Speaker 1: by some and hated by others. While there may be
Speaker 1: no escape to pay deductions, experts say we can make
Speaker 1: the most of the scheme
Speaker 1: in this episode. We work through the maths and unravel
Speaker 1: the myths surrounding CPF with the help of our guest, Adam.
Speaker 1: Wong Adam is the editor in Chief of the fifth person,
Speaker 1: a financial literacy and investment website. So, Adam, let's just
Speaker 1: get straight to it.
Speaker 2: Sure,
Speaker 1: CPF is a fact of life here in Singapore and
Speaker 1: some are for it. Some are against it. But how
Speaker 1: should we approach CPF?
Speaker 2: I think CPF is here to stay. I mean, whether
Speaker 2: you like it or not. I think a lot of
Speaker 2: controversy or surrounding CPF, you get the most headlines out
Speaker 2: of that. I think the majority of people in Singapore.
Speaker 2: I think they work with the C. P. F. As
Speaker 2: in it's a system that it's here to stay, it's
Speaker 2: been around for a long time and whether you have
Speaker 2: your complaints about it or not, it's something that you
Speaker 2: have to work with. And I think there are benefits
Speaker 2: to the CPF that you can definitely make use of
Speaker 2: and use it as part of your financial planning.
Speaker 1: Yeah. What are the benefits? And let's start with that.
Speaker 2: I think the most obvious one is that its interest
Speaker 2: rate is pretty good. I mean if you go to
Speaker 2: the bank right now, fixed deposits in Singapore have been,
Speaker 2: the rates have not been great for the longest time.
Speaker 2: It's always been less than 1%.
Speaker 2: I think that's a great option for people out there.
Speaker 2: Even if you go into the stock market, the bond market,
Speaker 2: it's not easy to find a risk free instrument that's
Speaker 2: backed by the Singapore government for 4% interest per annum.
Speaker 2: I think that's the main thing that we have as
Speaker 2: Singaporeans that we should make use of.
Speaker 1: You mentioned that it is risk free. Can you explain
Speaker 1: to us like how it can be considered at risk
Speaker 1: for many of us, we won't be touching this money
Speaker 1: until like when we're in our sixties, that's decades away,
Speaker 2: right? So when I say risk free, it comes from
Speaker 2: an investment perspective. So if you go invest money in
Speaker 2: the stock market, even with bonds of property, there's risk involved,
Speaker 2: right prices can come up, they can come down, you
Speaker 2: might lose money in your investment. So technically
Speaker 2: you shouldn't lose money in your CPF. The risk you
Speaker 2: have is that you have to trust that the government
Speaker 2: will continue to run things as well as they have
Speaker 2: done for the last many decades. Right? And the policy
Speaker 2: doesn't change. So there's policy risk in that sense.
Speaker 2: But when it comes to investment risk, it's technically risk free.
Speaker 2: You don't risk losing your money in the CPF Yes,
Speaker 2: there are restrictions in the CPS system. You can't redraw
Speaker 2: everything at 55 but the money is still yours and
Speaker 2: it goes back to you through the form of a
Speaker 2: monthly payments when you retire. So it's risk free in
Speaker 2: that sense. Um
Speaker 1: I guess trust that you said is important and
Speaker 1: you can also look at history, I guess and see
Speaker 1: how it has been quite consistent. But these deductions, of course,
Speaker 1: we can't opt out of them, right? It is required.
Speaker 1: And at the same time we don't actively manage our
Speaker 1: CPF money because someone else does it for us. But
Speaker 1: sometimes that also means that we don't really check it.
Speaker 1: Don't read about it, we don't care about the details
Speaker 1: because it's someone else's problem and we'll think about it
Speaker 1: when they were older. So some might think that, you know,
Speaker 1: I put money in it, I'll get it, I'll check
Speaker 1: it when I'm older. So how do you think people
Speaker 1: can maximize CPF, even if they're decades away from getting
Speaker 1: their hands on that money?
Speaker 2: I think that's the best time to maximize the use
Speaker 2: of CPF when you're much younger and you're such a
Speaker 2: long runway to grow. I mean if you're
Speaker 2: Near 55 and you don't have a lot of time
Speaker 2: to grow your money if you haven't been putting money
Speaker 2: in the CPF over the last, you know, many decades.
Speaker 2: So if you're young and you want to contribute to
Speaker 2: the CPF, I think it's an option. I would treat
Speaker 2: it like a bond actually, because bonds out there, they
Speaker 2: pay you a fixed interest rate is technically safe in
Speaker 2: that sense. But bonds have their own risk as well.
Speaker 2: You have to understand the company's financial position and their
Speaker 2: bonds that have defaulted as well.
Speaker 2: So this is arguably a safer instrument that pays you
Speaker 2: a 4% interest rate and you can treat it as
Speaker 2: part of your bond portfolio. I know of many Singaporeans
Speaker 2: who just decide not to invest in bonds and just
Speaker 2: invest in the CPF as their bond portfolio if you're young,
Speaker 2: that's the best time to maximize because you have a
Speaker 2: lot of time to grow and compound the money that
Speaker 2: you have and yes, of course the part of it
Speaker 2: has to stay inside when you turn 55
Speaker 2: But then I think that is crucial anyway because we've
Speaker 2: heard so many horror stories of Singaporeans who once they
Speaker 2: turn 55 to withdraw a big sum from the CPF
Speaker 2: and it just goes away in a few years. So
Speaker 2: I think the government is doing the best to protect
Speaker 2: as many people as they can by providing some level
Speaker 2: of income all the way to the end of your
Speaker 2: life to make sure that you're taken care of.
Speaker 1: Yeah, I guess one side of it too is some
Speaker 1: people feel like they are not being trusted with their
Speaker 1: own funds
Speaker 1: because this restriction is enforced upon them when it comes
Speaker 1: to saving for their retirement.
Speaker 2: I totally hear that, I mean my mom used to
Speaker 2: complain about the CPF. So I grew up thinking that
Speaker 2: the CPF was a restriction that the government put on
Speaker 2: people and there are restrictions of course in any system.
Speaker 2: So I used to think for the longest time that
Speaker 2: the CPF was just keeping our money from us. When
Speaker 2: I grew up, I realized that I can't change the system,
Speaker 2: it's here to stay and actually if you're self employed,
Speaker 2: you don't have to contribute CPF is not forced in
Speaker 2: that sense you do if your employee with a salary
Speaker 2: and all that you do still have to pay your
Speaker 2: money safe. So back to my anecdote, I remember when
Speaker 2: I was self employed income and I just had this
Speaker 2: mindset that I just didn't want to put any money
Speaker 2: in the CPF, I want full control of my money,
Speaker 2: which is a good thing too. And then I realized
Speaker 2: that I ended up paying a lot in texas because
Speaker 2: I didn't put in the CPF there and the CPF
Speaker 2: helps you to reduce your taxable income as well. So
Speaker 2: between the choice of paying taxes or putting money in
Speaker 2: my CPF account which grows interest, I would put money
Speaker 2: in the CPF now that I know better when I
Speaker 2: was much younger as well. So
Speaker 2: yes, there are restrictions, but I will make the most
Speaker 2: use of it. And I think the benefits in the
Speaker 2: CPS system,
Speaker 1: you mentioned taxes. Can you explain to us how CPF
Speaker 1: can help you in the tax front?
Speaker 2: So basically when you make income, there's income tax rate
Speaker 2: you pay that every year to the I. R. S.
Speaker 2: The more you make, the more you pay in taxes.
Speaker 2: But then when it comes to calculating your taxable income,
Speaker 2: they also take into account the CPF contributions that you
Speaker 2: made throughout the year.
Speaker 2: So based on the CPF contributions that you've made, they
Speaker 2: deduct that portion from your taxable income and then what's
Speaker 2: left that's taxable becomes lower. So your taxes reduced as
Speaker 2: a result. So I mean it depends on how much
Speaker 2: you make as an individual because there's a limit to
Speaker 2: how much you can reduce your taxes by. But it
Speaker 2: definitely helps. You can basically go to the CPF website
Speaker 2: and they tell you all the I. R. S. Website
Speaker 2: as well
Speaker 2: every single year when you make your submissions they will
Speaker 2: tell you exactly what your taxable income is. So the
Speaker 2: first thing that they do is that what is your
Speaker 2: income that you made? Does the headline figure? And then
Speaker 2: you have your deductions? Right? So maybe you have your
Speaker 2: text relief because you're an N. S. Man because you're
Speaker 2: a parent or because you're a caregiver. So if you
Speaker 2: make donations to charities and all that stuff. So these
Speaker 2: are deductions
Speaker 2: that go into reducing your taxable income anyway. And CPF
Speaker 2: is part of that deduction as well. So it reduces
Speaker 2: your taxable income. So what's left over is the amount
Speaker 2: that can be taxed. So based on that amount
Speaker 2: then the ras will calculate what your taxes based on
Speaker 2: that new taxable amount. So the CPF helps to reduce
Speaker 2: that when you contribute CPF amounts.
Speaker 1: Is that for everyone or just if you top up
Speaker 2: it's for everyone. So even your regular monthly CPF contributions
Speaker 2: go to that.
Speaker 2: And of course if you do the cash top up
Speaker 2: as well up to $8,000 every year, there's a tax
Speaker 2: relief on that as well and for most people it
Speaker 2: just makes sense to put money in your CPF rather
Speaker 2: than pay taxes. Right?
Speaker 1: You mentioned your mom earlier has she had a change
Speaker 1: of heart?
Speaker 2: She did take her money and her complaint was that
Speaker 2: at that point the time they called it, the minimum
Speaker 2: sum was $80,000 today. It's about $192,000 as of this
Speaker 2: year I think.
Speaker 2: So it's called the fr s not full retirement some
Speaker 2: so my mom's gripe was that that $80,000 was something
Speaker 2: that she could never touch. That was a complaint. Everything
Speaker 2: else she had above that she took out and she
Speaker 2: had no complaints about that. So she was complaining about
Speaker 2: that $80,000.
Speaker 2: But I look at my mom today and she has
Speaker 2: this stream of income from the CPF every single month
Speaker 2: that supplements her income and it's been really useful for
Speaker 2: her in her retirement. I don't know if she agrees
Speaker 2: with it nowadays, but the way I look at it
Speaker 2: and the way she's managing her finances, the CPF income
Speaker 2: for her has been very very
Speaker 1: useful and that's an issue to the raising of the minimum.
Speaker 1: Some that you mentioned because some people look at it
Speaker 1: and go, oh no, now I have to put even
Speaker 1: more money in in the CPF
Speaker 1: and it could be quite worrying for some because there
Speaker 1: are tweaks that are made along the way.
Speaker 2: Yes, that's true. So yes, this raising of the minimum
Speaker 2: some of the full retirement, some is another common complaint.
Speaker 2: I mean I totally understand that it feels like if
Speaker 2: it's something that feels very far away and every few
Speaker 2: years or so they raise it, then you're gonna feel
Speaker 2: the goalpost keeps shifting and they have explained this before
Speaker 2: that it has to keep up with inflation
Speaker 2: And the cost of living expenses. So just take my
Speaker 2: mother's example if they never raised it and your retirement,
Speaker 2: some today is $80,000 and that's all you need to
Speaker 2: put aside your CPF, let's say for me, I'm like
Speaker 2: probably like 15, 20 years away from my retirement, how
Speaker 2: much is $80,000 going to be worth in that time?
Speaker 2: So it doesn't make sense because then if you can
Speaker 2: return that amount, it's not going to be enough. So
Speaker 2: the government has to increasingly steadily shift up the frs
Speaker 2: to keep in line with inflation. It's just a fact
Speaker 2: of money and investments in general.
Speaker 1: So do you think we should solely rely on CPF,
Speaker 1: is it enough to focus on putting our money in
Speaker 1: CPF and not looking in other investment schemes, investment products?
Speaker 2: My answer would be no, I think CPF alone is
Speaker 2: not enough. I mean, I think there are people who
Speaker 2: just rely on CPF alone. There has been a famous
Speaker 2: example of this gentleman
Speaker 2: that run this one m 65 movement where he advocates
Speaker 2: having one million in your CPF. And then from then on,
Speaker 2: once you've taken care of that base, you can kind
Speaker 2: of relax and then focus on your other investments because
Speaker 2: he knows that whatever happens to him, he always had
Speaker 2: that CPF amount to rely on, he's never gonna get
Speaker 2: busted out. He's always has that you have to take
Speaker 2: care of him,
Speaker 2: that's his philosophy and it makes sense. Some people feel
Speaker 2: that CPF is not good enough. 4% is not good enough.
Speaker 2: I can make more money in the stock market 567 10%.
Speaker 2: And that's entirely possible as well. So I share that approach.
Speaker 2: I think the CPF forms one pillar of your financial portfolio.
Speaker 2: There's so many other options you can consider out there.
Speaker 2: This property, there's stocks, that dividend stocks and stuff like
Speaker 2: that reads as well
Speaker 2: and they all form a basket of investments that you
Speaker 2: can consider and how much you want CPF, how much
Speaker 2: you want, your stocks, depends on your risk profile, your
Speaker 2: financial goals, your investment goals. So the CPF is just
Speaker 2: one tool that you can use it like a lever
Speaker 2: of how much you want to put in CPF and
Speaker 2: the rest of it is really up to you. So
Speaker 2: it's not a black or white thing is like zero
Speaker 2: CPF or all in CPF, it's just one thing you
Speaker 2: can use
Speaker 1: Hi, my name is steve Lie and I'm Teresa Tang
Speaker 1: and we are the hosts of the new podcast, CNN
Speaker 1: correspondent from new york to Bangkok, join us as we
Speaker 1: kick back and chat with our colleagues across the globe
Speaker 1: about the latest news developments. Look out for our weekly
Speaker 1: episodes wherever you get your podcasts.
Speaker 1: How about those who are in the gig economy, who
Speaker 1: are freelancers where they don't have employee contributions, they're not
Speaker 1: required to keep a part of their income in CPF.
Speaker 1: Do you recommend or suggest that they put money into
Speaker 1: CPF or should they go to equities or other investment streams?
Speaker 2: Yeah. This really depends on the individual. So I do
Speaker 2: think I can make recommendations for anyone because it really
Speaker 2: depends on what their goals are, how financially, literally they
Speaker 2: are because investing in the stock market, yes, you can
Speaker 2: earn potentially higher returns, but you have risks and if
Speaker 2: you don't know what you're doing, you can end up
Speaker 2: losing money wherever you are, whether you're self employed and employed,
Speaker 2: all these things have to be balanced out, taking into
Speaker 2: account what makes most sense for you.
Speaker 2: So if you're self employed and you feel that you
Speaker 2: understand what investing in the stock market or the crypto
Speaker 2: market is like and you take care of your risks
Speaker 2: then Yeah, sure. Go ahead. And then you still can
Speaker 2: consider contributing to your CPF because that helps with your
Speaker 2: taxes as well if you don't want that, I would
Speaker 2: treat it as a potential bond as an option that
Speaker 2: you can use if you want to. I'm just totally
Speaker 2: agnostic about these things and just make use of what
Speaker 2: makes more sense for you.
Speaker 1: What about those who are nearing their retirement age? Because
Speaker 1: it's one thing when you're decades away and you still
Speaker 1: have time to recover from any financial losses. Those who
Speaker 1: are a few years away from retirement and maybe they
Speaker 1: haven't really put a whole lot of attention into trying
Speaker 1: to see if they have enough money once they hit retirement.
Speaker 1: What do you think they should do at this point
Speaker 1: to make sure that they are on the right track
Speaker 2: when you're near retirement and then if you don't have
Speaker 2: enough money, I think the reality is you just have
Speaker 2: to continue working.
Speaker 1: Yeah,
Speaker 2: that's true, right? But if you've saved up enough or
Speaker 2: maybe if you're lucky enough, one of your Children are
Speaker 2: so rich, they can take care of you. You know,
Speaker 2: that could happen. And hopefully you have a good relationship
Speaker 2: with that kid
Speaker 2: In any case, if you're older, then your margin for
Speaker 2: error is going to be a lot smaller. You can
Speaker 2: take risks because if one thing wipes you out at 5560,
Speaker 2: it's gonna be really tough. You don't have the energy
Speaker 2: or the opportunities as someone who was 30 years younger
Speaker 2: is different. So you gotta be really careful with that
Speaker 2: and it doesn't just apply to CPF applies to every
Speaker 2: investment that you have out there, you can't be taking
Speaker 2: unnecessary risks.
Speaker 2: So you want to invest in things that are very stable, predictable,
Speaker 2: that suit your risk profile. Maybe something that pays you
Speaker 2: a very stable dividend doesn't give you a very high return,
Speaker 2: but it gives you certainty. So CPF is something like that.
Speaker 2: In fact, I actually have a friend's father who actually
Speaker 2: put more money in the CPF.
Speaker 2: So when he retired, he decided to put more money
Speaker 2: because he just didn't want to take the risk of
Speaker 2: that sum of money that he had to put it
Speaker 2: in the stock market or something. He's not familiar with that.
Speaker 2: But the CPF is something that he understands, it's basically 4% 5%
Speaker 2: up to 56% as well, you know, for some of
Speaker 2: the balances in your CPF account, especially once you cross
Speaker 2: 55 as well. So he decided to just put more
Speaker 2: money there because it's something that he understands and he
Speaker 2: trusts and is risk free, like I said,
Speaker 2: and he gets an increased payment out of it every
Speaker 2: single month. So rather than risking his money somewhere, he
Speaker 2: doesn't understand, he decided to just put more money in
Speaker 2: the CPF.
Speaker 1: That's an interesting point there adam. But what do you
Speaker 1: think are the things that are misunderstood when it comes
Speaker 1: to Cp f
Speaker 2: I think what people think about, when it comes to
Speaker 2: being misunderstood about the system is that when you have
Speaker 2: something that's mandatory, people are gonna complain about it.
Speaker 2: What comes most first is that people understand about financial
Speaker 2: literacy about money in general, because I think if you
Speaker 2: don't understand how investments work, how financial planning works and
Speaker 2: all you care about is I want my money back
Speaker 2: then yes, I think you're going to complain about things
Speaker 2: because it's what you see and what you understand. But
Speaker 2: once you become a financial literacy and you understand the
Speaker 2: risk of the markets out there, how can you actually
Speaker 2: make money?
Speaker 2: And then you start to realize that actually 4% from
Speaker 2: the CPF is just another option to you, then you
Speaker 2: can take that into account and go, yeah, alright, I
Speaker 2: think this is pretty reasonable, you can't find that anywhere
Speaker 2: in the world and it's something that's available to Singaporeans. Yeah.
Speaker 2: Then from that perspective, because you have a lot more
Speaker 2: information about financial planning and stuff like that, then you
Speaker 2: would have a different perspective when it comes to CP
Speaker 2: F as an instrument,
Speaker 1: it sounds like what you're saying is even if we
Speaker 1: have CPF and there is that option for us that,
Speaker 1: as you mentioned earlier, pretty risk free, we still have
Speaker 1: to study how investments work and we still have to
Speaker 1: be financially literate, despite having kind of something to fall
Speaker 1: back on.
Speaker 2: I think that's always useful, I think because money is
Speaker 2: a part of our life, Money isn't everything, but it
Speaker 2: really is a part of a life and it's one
Speaker 2: of the life skills that
Speaker 2: It's important to pick up. You don't have to be
Speaker 2: like the best investor in the world or someone who
Speaker 2: makes billions of dollars in that sense. But knowing basic
Speaker 2: things like budgeting, how do I spend my money when
Speaker 2: I park my money? If I have $10,000 today, what
Speaker 2: do I do with it? Those are things that everyone
Speaker 2: through the adult life will go through and they need
Speaker 2: to know what to do with it, because if you
Speaker 2: don't then
Speaker 2: you could really put your money in places that they
Speaker 2: shouldn't be put into and you have scams very dubious
Speaker 2: investment schemes and you hear all these stories of people
Speaker 2: losing money every day
Speaker 2: and you don't want that to happen to you. So
Speaker 2: this is stuff that everyone should learn.
Speaker 1: Do you think we are maximizing this option for us,
Speaker 1: the CPF and all the different types of accounts that
Speaker 1: it comes with, I think
Speaker 2: that really depends on the individual. So people like Mr
Speaker 2: liu like of the one M 65 movement, he does
Speaker 2: his best to maximize his use of the CPF. Some
Speaker 2: people don't, they feel that it's just not a consideration
Speaker 2: for them maybe because they've made so much money elsewhere
Speaker 2: and they have their money and property or something like that,
Speaker 2: It really depends on the individual as well.
Speaker 1: What about those who feel like it's too late for
Speaker 1: them to care about their retirement funds and investing, What
Speaker 1: do you think they should do now?
Speaker 2: I don't think it's too late. I mean even if
Speaker 2: you're 60, the life expectancy in Singapore is about 80-20
Speaker 2: more years to go. It's a long time
Speaker 2: Wherever you are now. You still have to make the
Speaker 2: best use of the time you have with the resources
Speaker 2: you have and you want to make the best decisions
Speaker 2: for you in the amount of time that you have left.
Speaker 2: So even if you're not in the best position right now,
Speaker 2: it still makes sense to make the right decisions moving forward.
Speaker 2: So five years from now, you're better off than where
Speaker 2: you are today. 10 years from now, you're even better
Speaker 2: off than we are today. So this is Chinese proverb.
Speaker 2: The best time to plant a tree was 10 years ago.
Speaker 2: The next best time is today.
Speaker 1: You know, there are different accounts for CPF. How do
Speaker 1: you think young people should use those different accounts and
Speaker 1: maximize them.
Speaker 2: So there are three accounts so that ordinary account special-account medicine.
Speaker 2: So many safe. Let's put that aside for your medical
Speaker 2: expenses when anything happens to you. You can use part
Speaker 2: of that. The two main accounts that most people look
Speaker 2: at will be their ordinary account and special account. So
Speaker 2: the special account is meant for your retirement. So this
Speaker 2: account earns 4% up to 5% interest.
Speaker 2: So you have nothing else to do. The best place
Speaker 2: of course is to put it in a special account
Speaker 2: at 4% interest into the highest interest. But of course
Speaker 2: you have other considerations to think about. So your ordinary
Speaker 2: account that money put there can be used for your housing.
Speaker 2: So housing is going to be a key purchase consideration
Speaker 2: for almost everyone in Singapore. So if you're going to
Speaker 2: plan about buying a home sometime soon and you plan
Speaker 2: to use your CPF ordinary account money there to fund
Speaker 2: part of that then of course you need to plan
Speaker 2: your finances in a way that your CPF can take
Speaker 2: care of that portion. But if you're really about your home,
Speaker 2: you don't plan on moving anytime soon. You've got like
Speaker 2: your finances planned out and you feel that yes I
Speaker 2: can put more money into the CPF special account then
Speaker 2: obviously you want to put it there because you're in
Speaker 2: a higher interest rate. Of course as always the restriction
Speaker 2: is you can only
Speaker 2: Take out your money at 55 and of course there's
Speaker 2: the frs at that point in time. Whatever the prevailing
Speaker 2: rate is, that's what has to be kept inside for
Speaker 2: your annuity till the end of your life.
Speaker 1: Do you think it's wise to use your CPF monies
Speaker 1: to invest in stocks in E. T. F. S and
Speaker 1: all that because that is an option to write,
Speaker 2: it is an option and like with any investment it's
Speaker 2: good to know what you're doing. So if you go
Speaker 2: to like the SGX website, there's a list of CPF
Speaker 2: approved stocks,
Speaker 2: so that means these are stocks or E T F
Speaker 2: s that you can use your CPF monies to go by.
Speaker 2: But CPF approved doesn't mean it's a good stock to buy,
Speaker 2: It's just approved for CPF use so you still have
Speaker 2: to understand what you're buying what you're investing in if
Speaker 2: you make the wrong decisions or you're just trying to
Speaker 2: get lucky, you're not going to make money if you
Speaker 2: don't know what you're doing, just put it in the
Speaker 2: CPF leave it there, you know, you're going to make
Speaker 2: that guarantee 2.5% or 4%.
Speaker 2: But if you do know what you're doing and you
Speaker 2: understand your investments and you feel that you can earn
Speaker 2: a higher return with a little bit more risk. I
Speaker 2: would take excessive risk with my CPF money because this
Speaker 2: is for my retirement, but a little bit more risk
Speaker 2: and I invest in something that's very stable in the
Speaker 2: market is available out there? Yeah, I would consider doing
Speaker 2: that as well.
Speaker 1: Now if you have extra money adam, do you think
Speaker 1: you should park it in the CPF transfer to your
Speaker 1: SRS or medicine, save
Speaker 2: extra money again. It really depends on what your goals are.
Speaker 2: So it doesn't mean by default, I'm going to put
Speaker 2: in my CV F if you know what to do
Speaker 2: with that money, please go ahead and do something that
Speaker 2: you think it makes most sense for you.
Speaker 2: If not, yeah, if it's my investment goal financial goal
Speaker 2: to have a 4% instrument that earns me that interest,
Speaker 2: then yeah, you consider CPF as an option for yourself.
Speaker 2: Many save, it's a supplement. You should have insurance as
Speaker 2: well to take care of certain things as beyond medicine safe.
Speaker 2: But yes, you should have something medicine as
Speaker 1: well.
Speaker 1: So it really depends on your investment, really
Speaker 2: depends on who you risk
Speaker 1: profile. Right?
Speaker 2: That's true. Yes.
Speaker 1: Before I let you go, there are different opinions about CPF,
Speaker 1: but how would you compare CPF to other pension systems
Speaker 1: in different parts of the world?
Speaker 2: I wouldn't say I'm qualified to compare because I understand
Speaker 2: CPF more than other pension systems, but what I can share,
Speaker 2: for example, like the four oh one K in the U. S.
Speaker 2: Is linked
Speaker 2: to the stock market. So if the stock market isn't
Speaker 2: doing well and the year you're retiring, everything comes to
Speaker 2: a crash,
Speaker 2: that's going to be really, really painful and something you
Speaker 2: don't see happening as well. So I wouldn't know about
Speaker 2: any other pension systems in the world, but for Singapore.
Speaker 2: I think it's something that we can make use of
Speaker 2: and might not make the most use out of it.
Speaker 1: That's a good point about how CPF is here to
Speaker 1: stay and we should include it in our financial planning
Speaker 1: and we should also maximize its benefits. Thanks so much
Speaker 1: for your insights adam.
Speaker 2: Thank you for having me,
Speaker 1: Thanks to my guest adam and thanks to all of
Speaker 1: you for tuning in. We hope you enjoyed this episode.
Speaker 1: Do you remember to like this podcast? So you know
Speaker 1: when a new episode drops, you can find Ciena's business
Speaker 1: and financial coverage online at sienna dot asia. The team
Speaker 1: behind this podcast is Audrey one, Danieli, Jacqueline chan and
Speaker 1: Christina robert. I'm sarah called E.