Looking at this chart I came up with a very conservative 6% compound per annum, the min. sum will be almost $600K by the time I’m 55!<\/p>\n
I (personally) wouldn’t have met the min. sum<\/strong><\/span><\/p>\n Provided that I continue working till I’m 55 and am paying off my flat with CPF, I would have only accumulated approximately $370K by the time I’m 55 (including CPF interests). I’m no where near the minimum sum projection.<\/p>\n The $5K max contribution limit will be raised very soon<\/strong><\/span><\/p>\n I strongly believe that the current max of $5K will be increased very soon because the sums just do not work out. Here’s a fictitious example of a highly paid young and energetic local graduate drawing a salary of $5K\/mth so he can make the maximum possible CPF contribution from day one.<\/p>\n Edit: I made some mistakes in the calculations earlier, this is an updated sheet.<\/em><\/p>\n (I’m having trouble uploading graphics, will do so later.)<\/em><\/p>\n He would have around $807K in his OA + SA by the time he’s 55, but check out his minimum sum! That’s provided if he doesn’t buy a property.<\/em><\/strong><\/p>\n But I’m sure he wants to get married and buy a flat… and have kids… the government strongly encourages that!<\/p>\n He’ll have no money left in CPF if he bought a condo<\/strong><\/span><\/p>\n So after working for 30 years and paying for a flat together with his spouse<\/em>, it is fair assumption that this bloke would have $300K less in his CPF for a decent HDB flat at current prices ($600K for a flat including interests divided equally between husband and wife).<\/p>\n If the couple buys a million dollar, they will have nothing left in their OA.<\/p>\n If his wife gets pregnant and stops working we may find another dead body in Bedok Reservoir\/Singapore River.<\/p>\n Singapore tax rate is effectively >36.5%<\/strong><\/span><\/p>\n Given that our current CPF rate is 36.5% (20% employee + 16.5% employer) our income tax rates can be considered to exceed 36.5%. Just as an example, the highly-paid graduate above would pay about 3% income tax for a salary of $60K\/yr. This would add up to around 39.5% in taxes. This is higher than many developed countries. Even in US the highest tax bracket in the most expensive state is around 40%.<\/p>\n What the hell are we still contributing to CPF? We should be contributing as little<\/em> as possible.<\/p>\n On hindsight, maybe it is a good idea to spend all<\/em> your CPF money on a property since you’re never ever going to get it back.<\/p>\n The other question would be why are we even buying older<\/em> and shorter tenure<\/em> properties for more money?<\/p>\n","protected":false},"excerpt":{"rendered":" The government just announced that the CPF minimum sum will be raised to $155K this year. Back in 2003 the min. sum was $80K. Minimum sum will be $600K by 2037 Looking at this chart I came up with a… Continue Reading →<\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[262,182],"tags":[290,286,298,435,287,282,320],"class_list":["post-2097","post","type-post","status-publish","format-standard","hentry","category-finance","category-politics","tag-cpf","tag-government","tag-hdb","tag-minimum-sum","tag-pap","tag-singapore","tag-tax"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/tzlee.com\/blog\/wp-json\/wp\/v2\/posts\/2097","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/tzlee.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/tzlee.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/tzlee.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/tzlee.com\/blog\/wp-json\/wp\/v2\/comments?post=2097"}],"version-history":[{"count":15,"href":"https:\/\/tzlee.com\/blog\/wp-json\/wp\/v2\/posts\/2097\/revisions"}],"predecessor-version":[{"id":2163,"href":"https:\/\/tzlee.com\/blog\/wp-json\/wp\/v2\/posts\/2097\/revisions\/2163"}],"wp:attachment":[{"href":"https:\/\/tzlee.com\/blog\/wp-json\/wp\/v2\/media?parent=2097"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/tzlee.com\/blog\/wp-json\/wp\/v2\/categories?post=2097"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/tzlee.com\/blog\/wp-json\/wp\/v2\/tags?post=2097"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"\"](\"http:\/\/www.tzlee.com\/blog\/wp-content\/uploads\/2014\/05\/Screen-Shot-2014-05-08-at-12.29.02-pm.png\" "\\"2014")
<\/a><\/p>\n<\/a><\/p>\n