They could jointly pay their parents’ annuity premiums
ANNUITIES can be a good way to save for retirement.
But senior citizens, who have seen a delay of their CPF “First Prize”, as well as housing prices and the cost of living rocketing, are perhaps averse to this new idea.
This group of people no longer expects the “promised return”. Older workers only want to hold on to their precious CPF.
The annuities scheme is attractive for the current working population to “fulfil their ageing needs”. But the premium amount must be acceptable to all.
Perhaps it is fair that a certain percentage be directed to an annuity fund every year for every $2,000 in one’s Special Account (SA).
Since the use of the SA is restricted, an annuity is a good form of investment if purchased early.
In addition, we should modify the Dependent Protection Scheme. We can convert the coverage to an annuity premium once the dependent starts to contribute to his or her own CPF.
Children or siblings should also be required to contribute jointly to their parents’ Special Account for the annuity premium either as a small percentage or capped at a maximum per parent account.
This family-centric support framework could sway couples to have more children. Siblings sharing the burden of supporting their parents definitely makes more sense than the heavy responsibility one person has to bear.
Curbing liberal use of CPF is best way to save for old age
Letter from LIM CHONG LEONG
THE buzzwords about town over the last few days are “CPF” and “annuity”, following the Prime Minister’s National Day Rally speech on how to manage the financial needs of retirees.
The rationale of the proposed changes appear to be that people are not saving enough in their CPF accounts early in their working lives.
Over the years, rules have been changed to allow freer use of CPF monies for housing, investment,education and medical purposes.
People take advantage of these changes and the result is that they do not have enough retirement funds. Worse, those who use CPF for investments may also lose substantial amounts of money.
A simple solution to overcome the situation and ensure Singaporeans have adequate retirement savings would be to tighten the current liberal use of CPF savings.
In addition to the current minimum sum rule, other measures could include curbing the use of CPF for investment and speculation in properties, shares or medical expenses.
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