The personal mobility device (PMD) footpath ban came hard and fast. In terms of impact to the needy or people’s livelihoods, was it a case of :
- Didn’t know (enough)? — impossible, given the style of policy making
- Didn’t care (enough)? — tsk tsk $7 million grant immediately announced
- Choosing the lesser evil?
I think I’ll leave it to you to ponder over it. You know what? It isn’t too different when it comes to dishing out financial advice. When we say something, do we really know enough? Care enough? Or choosing the lesser/lazy evil?
- We know what we know.
- And we know what we don’t know.
- The scary bit? We don’t know what we don’t know – and it can be dangerous.
Let me give an example – when people ask about asset allocation, inevitably there will be someone who comes along and say :
To be fair, I honestly feel that most intentions were good but what I’m afraid of is when people don’t know what they don’t know. I see one-liner comments like these and I think, oh wow, so you know that CPF is a complex scheme that has evolved to provide :
- Family protection : Dependant Protect Scheme (DPS) and Housing Protection Scheme (HPS)
- Home Ownership
- Asset Enhancement
- Education Scheme
And obviously you anticipated the person’s profile and financial situation, and determined that their CPF can provide fulfill all of the above needs at different points of their life and yet still function as the bond component of their portfolio.
Do we even know their intention/definition of having bonds in portfolio? Income generation? Capital preservation? Buy low to sell high (sell bonds, buy equities) in downturns? If it is the latter, is their CPF money liquid enough to be used to purchase equities?
Don’t be lazy with one-liners. Elaborate on how what you said applies to what people ask, which you would know how to, if you truly understood what you wrote.
Read also : Why CPF Shouldn’t Be Considered As Bonds
Now you know why so many blogs, including myself, put out disclaimers. At the very least, I know what I don’t know, which is why I have steered away from my foolish attempts of trying to “educate”.
What I will do, is share my experience and document what I have learnt and what I have done. I’ll leave readers to interpret accordingly for their own situation rather than take advice from strangers over the internet. I write, so that you don’t have to stumble the same way I did. I’m not perfect either, and I WILL get things wrong.
Okay, rant over 😛
CPF Board Q & A
I will go straight to the point.
I am on the verge of transferring $40,000 out of $100,000 in my CPF-OA into my mum’s CPF-RA and letting her withdraw them as monthly cash payouts.
Read here to check if you are eligible to do this.
In my attempt to learn about the options available to me, I wrote to CPF Board for some information via MyCPF > My Mailbox function. A lot of the answers to common questions can actually be found in the FAQs. Some of the questions I asked are specific to my situation, but some helpful bits for the general public are :
Q : Since my folks are currently on CPF RSS, can they still join CPF LIFE? Any limitations?
A : CPF members can submit application anytime till one month before they turn 80. There is no minimum amount. ($60,000 is the amount for automatic placement into the scheme but interestingly, there is no minimum)
Q : How long will the process to join CPF LIFE take?
A : The application will be processed in the same month if it is received by the 25th of the month and the bank account provided is previously used for receiving payouts under the CPF Retirement Sum Scheme. The CPF LIFE monthly payouts via Inter-Bank GIRO are credited by the 4th working day (excluding weekends and public holidays) of each month.
Q : After the first transfer and application to join CPF LIFE, can I perform additional transfers into their CPF-RA accounts later? If yes, would their payouts be re-calibrated based on their new CPF-RA balances?
A : Yep, can continue to top up their Retirement Accounts (RA) with cash/CPF transfer, as long as they have not reached their topping-up limit. After receiving top-ups to their RA, they have two options:
(1) Purchase an additional annuity; or
— If they choose to purchase an additional annuity, the payout that they receive will last them for as long as they live.
(2) Stream out additional monies as Additional Monthly Payout (AMP).
— If they choose to have the monies streamed out to them as AMP, this additional stream of income will only last them till they reach the age of about 90 years old. The AMP is not part of CPF LIFE and this payment will stop when the money in the RA runs out.
(3) Well, a third option is to leave them untouched to generate interest to replenish depleted CPF-RA for perma payouts in the scenario of RSS or to maintain full bequest amount in the scenario of CPF LIFE. Just take note of the answer to the next question.
What happens if I choose the CPF LIFE Basic Plan?
Q : What happens when my parents are no longer around?
A : For all CPF transfers, any remaining transferred monies will be returned to the givers’ originating CPF account(s) after the recipient passes away. The refund amount is capped at the principal top-up amount.
Annual Turtle Investor Giveaway counting down to 31st December 2019!