Under the new CPF Life scheme, CPF members aged 50 and below will have their minimum sum cash balances divided into two portions when they turn 55. One part goes to the Retirement Account, which will be used for monthly annuity payouts, while the other, Refundable Premiums (RP) portion, will be used to pay for the premiums of the scheme.
Manpower Minister Ng Eng Hen assured Singaporeans that the new compulsory annuities scheme, administered by the Central Provident Fund (CPF) Board, which operates a more favourable interest rate structure than commercial annuity providers, will offer more attractive returns than similar products offered by the private sector. Those who opt for the scheme will enjoy payouts based on a minimum guaranteed interest rate of 3.5 per cent, which is higher than the 2 per cent rate of return that most commercial annuity providers guarantee.
From Jan 1, the Government has floated the interest rates for the Retirement, as well as the Special and Medisave accounts, and pegging them to 10-year Singapore Government Securities (SGS) rates. In order to help members adjust to the floating rate, the Government has guaranteed a minimum pay out of 4 per cent on such accounts for the next two years, after which all CPF accounts will attract a floor rate of 2.5 per cent. An additional 1 per cent interest will also be paid out on the first $60,000 of all accounts, with up to $20,000 in the Ordinary Account.
Other issues raised include the certainty that those who will live long enough will stand to receive the higher payouts. Singaporeans are free to sign up annuities plans with commercial providers and be exempted from the national scheme.
Friday, February 15, 2008
Thursday, February 7, 2008
Financial Planning (1) – Meeting Your Financial Needs
Financial Planning is a way of devising strategies to achieve our financial goals. Meeting financial needs is an important part of our daily lives. It is an ever-ongoing process shaped around our financial life cycle. We are poised with challenges of meeting financial needs like our children's education, buying our dream home, supporting our ageing parents and preparations for our retirement…
Financial planning is a tedious process, involving the planning of our cash flow, insurance coverage, investments strategies, retirement plan, tax and estate planning. It all begins with focusing on specific needs first and gradually built into a comprehensive financial plan. The main focus of your financial plan should be setting realistic financial goals and objectives and achieving them. A comprehensive financial plan includes Cash Flow Planning, Personal Risk Management, Investment Management, Retirement Planning, Tax and Estate Planning.
Risk Management
Risk management involves protection against any unforeseen circumstance that may result in huge financial expenses. These unpredictable misfortunes such as major illness, disability, total permanent disability or death normally bring about drastic changes to our income and our ability to continue satisfying not only our personal financial needs but also those of our loved ones. Personal risk protection is a vital element in financial planning, minimising erosion of our net worth and protecting our family from the consequences of unfortunate events.
Asset Management
Planning ahead to prepare for our later life or retirement, it allows us to plan our retirement and lead an easy life thereafter. If you have children, the cost of their education must surely be a cause of concern.
Asset accumulation helps to provide for our future cash needs or prepare for our retirement by means of building our wealth through investments. Managing our assets carefully may provide us with passive income enabling us to achieve our financial objectives.
There are certain decisions in our life that are vital and which we have to make in advance of your death. Such decisions could involve the maintenance, disposal and use of your estate, cash, investments, business possessions and life insurance. Asset Distribution assures that your estate is distributed efficiently according to our desires.
"If you can count your money, you don't have a billion dollars." - J. Paul Getty
Financial planning is a tedious process, involving the planning of our cash flow, insurance coverage, investments strategies, retirement plan, tax and estate planning. It all begins with focusing on specific needs first and gradually built into a comprehensive financial plan. The main focus of your financial plan should be setting realistic financial goals and objectives and achieving them. A comprehensive financial plan includes Cash Flow Planning, Personal Risk Management, Investment Management, Retirement Planning, Tax and Estate Planning.
Risk Management
Risk management involves protection against any unforeseen circumstance that may result in huge financial expenses. These unpredictable misfortunes such as major illness, disability, total permanent disability or death normally bring about drastic changes to our income and our ability to continue satisfying not only our personal financial needs but also those of our loved ones. Personal risk protection is a vital element in financial planning, minimising erosion of our net worth and protecting our family from the consequences of unfortunate events.
Asset Management
Planning ahead to prepare for our later life or retirement, it allows us to plan our retirement and lead an easy life thereafter. If you have children, the cost of their education must surely be a cause of concern.
Asset accumulation helps to provide for our future cash needs or prepare for our retirement by means of building our wealth through investments. Managing our assets carefully may provide us with passive income enabling us to achieve our financial objectives.
There are certain decisions in our life that are vital and which we have to make in advance of your death. Such decisions could involve the maintenance, disposal and use of your estate, cash, investments, business possessions and life insurance. Asset Distribution assures that your estate is distributed efficiently according to our desires.
"If you can count your money, you don't have a billion dollars." - J. Paul Getty
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