HDB prices are affordable based how the ability of the buyers to pay. Now the affordability is a couple’s monthly CPF contributions for the next 25 years. This means that whatever that goes into the CPF will go out the other way, to pay for the affordable HDB flat. The couple would likely to start to save a little 5 or 10 years after buying a flat when their incomes rise. How much savings could that be to go into their retirement account?
Then there is the Medisave Accounts to fill up and at current rate, more than $100k will have to be set aside as untouchable in the Medisave Minimum Sum Account. Technically there could be nothing left to be set aside for the Retirement account at least after the flat is fully paid in 25 years time.
By the age of 55 or 65 the CPF Life Scheme will kick in and whatever money left in the CPF would be compulsory acquired to pay for their retirement annuities. Luckily the Medisave Account is still untouched by any compulsory scheme, but not for long. The money in the Medisave Account will be compulsorily acquired too to pay for Medishield Life once the scheme is finalized.
The net effect of the two compulsory schemes means that the Govt has decided for you how your money must be spent. In the CPF Life which is an annuity scheme, there is still hope of getting something back if one lives long enough.
In the case of Medishield Life, it is paying and nothing is coming back except when one needs hospitalization or is seriously ill and provided the illness is covered by the scheme. Read the fine prints and the exclusion clauses carefully.
The Govt effectively has a hold on the CPF savings of its citizens through a monopoly public housing scheme that will feed on the savings of its citizens for the first 25 years and a CPF Life for the next 30 plus years. As for the Medishield Life, this is still work in progress and the payment into this scheme could come very early, maybe from the day one starts working and contributing to the CPF.
The best part, the Govt can decide as and when how much to raise the premiums and compel the people to pay. There is no opting out. Resistance is futile. You earn and save and the Govt will be the recipients in a way, helping you to spend your savings.
Your money is not your money anymore. The Govt knows how much you have and can afford to pay and the three items will effectively absorb practically every cent there is available or affordable with hardly anything left. This is a very efficient system to manage the people’s income/savings by the Govt, with compulsion, and the people are literally left with no choice of their own.
The Govt is caring for the people, to their last day and managing their last cent without having to ask the people for their consent. Our CPF savings are now absolutely safe with the Govt
And one good thing, there would not be any more scheme to manage your CPF savings after this.There is nothing left to be managed anymore.
Chua Chin Leng AKA Redbean
*The writer blogs at http://mysingaporenews.blogspot.com