Despite this, Mr Zaqy asked Dr Lim to spell out WP's minimum wage standards.
"Could I just confirm once again that the Workers' Party's S$1,300 minimum wage benchmark is gross income so that we could settle this and come to an understanding?" he said.
Dr Lim at first said that was correct and a "fair characterisation", but later said that WP's stand was for the S$1,300 minimum wage to mean take-home pay.
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Hmm ... based on WP's definition of minimum wage of $1.3K take-home pay!
Present batch of CPF OA1M65 in 2021/2022 can depend on passive income from their CPF up to 3 times of minimum wage from 65 to 88
CPF OA initial withdrawal at 4.5% giving $3.8K per month and adjust for yearly inflation at 2.5% from 65 to 88 i.e. $6.5K per month!
CPF RA and MA used for medical care!
Even CPF Millionaire couples are living slightly above the minimum wage baseline if they don't have other sources of retirement income other than CPF. So can we still don't invest to build up investment income for life when we are much younger?
Think, think and think!
Posts
CW,
ReplyDeleteAge 50 to 55 maybe the "sweet spot" to do all the CPF hacks if one is coming down the mountain. Got "lucky" with properties and stocks, etc ;)
And no matter how much you voluntarily contribute to CPF (there's a cap), CPF is just a minor portion of your networth. Its just a hedge in case all your investments go sour or you went bankrupt, you know you won't go hungry in your old age. That's all!
Those who voluntarily contributed to CPF age 35 and below?
If you are youths of the cross, well, you may want to go back to Sunday school and ask your shepherd to explain the Parable of the Talents to you one more time...
;)
I prefer to view our CPF as just another life annuity that would pay us when we gets old. Purely rely on it to feed us is rather unrealistic in the face of all these inflations.
ReplyDeleteHi Uncle8888,
ReplyDeleteI've always said that if CPFB & govt run CPF like a pension, we can cut the contribution rate to 5% employee & 5% employer. (ok ok, medisave probably still need another few %)
Property? Use cash lorr ... like the rest of the world. LOL.
A hands-off & dumb investment can provide a significant long-term retirement sum, using only a humble salary.
Case study:
Started work in 1980 and retired in 2020 (40 years working life, no FIRE lol!)
Starting salary of $2,000. No bonuses. No big increments or promotions for 40 years. Only adjustments for inflation. Lousy worker!
CPF is 5% employee and 5% employer. This means only $200 monthly contribution with inflation adjustments over the years.
CPFB invested into 60% total US stock market & 40% 10-year US Treasuries. Cannot take out until 65. Cannot use for property. Cannot use for education.
In 2008, his CPF pension portfolio dropped -14% (worst drop during this 40 years).
Today, he is 65 and he goes to CPF office to find out he has $1.7M in his pension account.
PS: I used US stocks & Treasuries as they have long enough data.
As a couple, the missus and I have been building up our CPF funds as the key pillar for our retirement sustenance. Dividends and rental income which are more volatile have been "relegated" to be secondary sources of income to fund our retirement.
ReplyDeleteBeing wage slaves our whole life, we have grown used to having salary income credited into our bank accounts like clockwork every month. So in retirement, we want to have this certainty of regular income. And we think we can have this certainty with the CPF.
By Jan next year, we will hit 3M60 in our combined CPF. And from this amount, we can derive meaningful "passive income" comprising of interests from our OA & SA, and a further monthly payout from CPF Life at 65. We intend to live within this amount of roughly $100,000 a year.
Anything else from equities and rental will be bonus.