Money123Winn

22/02/2024

Many questions on everyone's mind regarding the recent CPF Changes

> Should you top up to the Enhanced Retirement Scheme?
> How can people optimise the yield on OA, now that SA will go into OA after 55?

Join us on our online webinar to find out more!

https://www.straitstimes.com/business/askst-how-will-closing-of-special-account-impact-cpf-members-when-they-turn-55 #:~:text=SINGAPORE%20%2D%20Several%20changes%20to%20the,Budget%20speech%20on%20Feb%2016.

19/09/2023

https://www.straitstimes.com/business/invest/cpf-boost-for-middle-income-workers-with-rise-in-salary-ceiling-for-contributions

The salary ceiling for CPF contributions is rising from $6,000 to $8,000 by Jan 1, 2026.

This means that middle-income workers will see higher contributions but slightly lower disposable income.

However, with the compounding effect, the increase in the CPF salary ceiling would enable middle-income members to meet their Full Retirement Sum or even Enhanced Retirement Sum.

21/07/2021

5 Core Principles of Retirement Planning
Retirement means the complete withdrawal from one’s occupation and active working life. The transition into the retirement phase would also mean that there would be a loss of active income and drawdown from existing savings to sustain a desired retirement lifestyle.

After slogging and saving up for so many years, we want to see ourselves enjoying the golden years of our lives. But how so do we go about securing a happy retirement future for ourselves?
1. Stable Income Payout

Your retirement plan should consist of a stable income payout during your golden years. It is preferred that your payout comes in a monthly form so that you can control your budget according to the payout given.

People tend to spend more while leaving large amounts of cash in the bank. This is due to bad budgeting habits and the illusion that large amounts of liquid cash create by making them feel “rich” and therefore, have greater spending power.

By putting your savings to work in a retirement plan that gives stable monthly income payout, you would more likely be mindful of your expenses!
2. Capital Protected



Ensure that your retirement funds are in an instrument that has high levels of safeguards or guarantees for your capital. As you are nearing retirement, shift your portfolio to a lower risk level by investing your money in bonds with good credit ratings (AA and above) or retirement plans that can give you stable payout plus a high level of capital protection.



The last thing you would want to see is your hard earned savings lost due to risky instruments that have no capital protection at all.
3. Invest in instruments that are largely unaffected by market conditions



Many retirees invest in property in Singapore to get a rental yield and hope for capital appreciation. However, the largest risk to Singapore property investments are government regulations, which can cause property prices and rental yields to fluctuate. This can negatively affect your monthly income and cause you to be cash-strapped.



In the worse case scenario, if you require cash due to unforeseen circumstances, you may have to force liquidate your property in bad market conditions to get the cash. In bad property market conditions, your property investment may also become illiquid. A better alternative is a retirement plan that can offer great yields without being affected much by government regulations nor market conditions.
4. Flexibility



The CPF Life Scheme is a great retirement scheme for all Singaporeans as it provides high monthly income payout for all Singaporeans.



However, once you have set aside the Retirement Sum for CPF LIFE, you are unable to withdraw the amount as it is used to purchase the annuity. Hence, you will not be able to liquidate the amount in the event of an emergency.



If you prefer more liquidity, opt to diversify some of your retirement funds into retirement plans or bonds that give you the freedom and flexibility. Some retirement plans may even have the option of letting you re-deposit your monthly income for higher interests if you require (much unlike CPF LIFE).
5. Overcome Longevity Risk



As medical technology advances, life expectancy is also expected to increase. In Singapore, men and women’s life expectancy is expected to increase from 80.1 and 84.5 in 2015, to about 85.6 and 89.3 by 2050.



Sounds scary isn’t it? Does that mean I have to work longer to save more for retirement?



Hence, your retirement strategy must be made for the long term in case you outlive your savings. By allocating some of your retirement funds in annuities, you would not be afraid that you would outlive your savings and live a comfortable retirement.



Annuities are lump sums of cash invested that can produce a monthly stream of income for life and can be a great solution against longevity risk.



Confused about retirement planning?
Seek a qualified financial advisor and go through every detail that secure your golden years!



So what steps you have taken for your own retirement planning? Let us know in the comments below!

21/07/2021

𝐖𝐡𝐞𝐫𝐞 𝐝𝐨 𝐲𝐨𝐮𝐫 𝐂𝐏𝐅 𝐬𝐚𝐯𝐢𝐧𝐠𝐬 𝐫𝐞𝐚𝐥𝐥𝐲 𝐠𝐨 𝐭𝐨 𝐚𝐟𝐭𝐞𝐫 𝐲𝐨𝐮 𝐝𝐢𝐞?
With the advancement of social media, “fake news” can catch the attention of the unknowing and become viral very quickly. You would mostly likely have heard of the following:
“When we kick the bucket, all our balance CPF money will be automatically deposited into our next-of-kin’s CPF account”
“CPF money forever cannot take out”
Is it really true? Let us remove the veil by sharing on CPF nominations.
𝐂𝐏𝐅 𝐍𝐨𝐦𝐢𝐧𝐚𝐭𝐢𝐨𝐧𝐬
When someone passes away, how his/her CPF savings is distributed depends on whether the deceased member made a CPF nomination.
If the person did not make a CPF nomination before passing, the CPF savings will be forwarded to the Public Trustee for distribution in accordance to the intestacy laws of Singapore, which can be found in Singapore Statues Online (https://sso.agc.gov.sg/Act/ISA1967).
However, if the person did make a CPF nomination before passing, the CPF savings will be distributed in the percentage proposed in the nomination. The savings will be distributed in cash through a cheque/GIRO.
𝐓𝐲𝐩𝐞𝐬 𝐨𝐟 𝐂𝐏𝐅 𝐧𝐨𝐦𝐢𝐧𝐚𝐭𝐢𝐨𝐧
There are 3 types of CPF nominations.
Cash Nomination – Nominees will receive the CPF savings in a form of a cheque or GIRO
Enhanced Nomination Scheme – CPF savings are transferred to nominee’s CPF account
Special Needs Savings Scheme – Dispatches the CPF savings on a monthly basis
𝐏𝐫𝐨𝐜𝐞𝐝𝐮𝐫𝐞 𝐨𝐟 𝐂𝐏𝐅 𝐍𝐨𝐦𝐢𝐧𝐚𝐭𝐢𝐨𝐧
The process has been made very simple for Singaporeans and Permanent Residents. Upon the passing of a loved one, nominees will receive a letter from CPF 10 days after their passing.
When that happens, you may log in the CPF website, go to “my request” and select “withdraw deceased’s CPF”. For this, you will need your NRIC, deceased date of nomination, date of death, your bank account and CDP account number. You will then receive the cash in about 1 month after application.
𝐖𝐡𝐚𝐭 𝐲𝐨𝐮 𝐬𝐡𝐨𝐮𝐥𝐝 𝐭𝐚𝐤𝐞 𝐧𝐨𝐭𝐞 𝐟𝐨𝐫 𝐂𝐏𝐅 𝐍𝐨𝐦𝐢𝐧𝐚𝐭𝐢𝐨𝐧𝐬
Firstly, a will does not cover the distribution of CPF savings after death. You will still have to do a CPF nomination even if you have written a will!
Secondly, CPF nominations are revoked after marriage as well. Do remember to redo your CPF nomination after you have married!

21/07/2021

CURRENT ELDERSHIELD SCHEME VS CARESHIELD LIFE




What is ElderShield?



The Eldershield is a long-term basic care for all Singaporeans and Permanent Resident who is a CPF member and is covered automatically when they reach the age of 40 automatically, unless opted out.



Currently, there are 2 schemes, ElderShield 300 and ElderShield 400. For those who had already reach the age of 40 or are turning 40 after September 2002, they would fall under ElderShield 300 when it was first launched which provides a monthly payout of $300 for a maximum of 60 months (5 Years)



However, for those who turned 40 after 30 September 2007, they would automatically fall under the ElderShield 400 which provides a monthly payout of $400 for a maximum of 72 months (6 Years)





How much are you paying for your ElderShield now?



Premiums are determined based on the entry age and are usually based on the premiums at Age 40 when you were automatically covered unless an individual chooses to opt in at a later age, or the age they were at when ElderShield 300 was first launched on September 2002. However, both ElderShield 300 and ElderShield 400 are payable using your Medisave funds and the premiums do not increase as you age. In addition, you may also use your family members’ Medisave to pay for your premiums.



Click here to find out more about the premiums you are paying:



https://www.moh.gov.sg/careshieldlife/about-eldershield/premiums



ElderShield Supplements



ElderShield can also be supplemented for all Singaporeans and PR from our CPF account. It can be paid using your own MediSave, or the MediSave of your spouse, parents, children, or grandchildren, up to a limit of $600 per year. So far, there are only 3 Insurance Providers who are providing these plans.





What does ElderShield cover?



ElderShield pays out when an individual is “Severely Disabled”. In other words, the inability of an individual to perform Three or more Activities of Daily Living (ADLs) independently, with or without mobility aids (e.g. walking aids, wheelchair). This means that the individual will require the physical assistance of another person for the ADL.

Why is Long-Term Care Important?



Long-Term Care refers to individuals who are unable to perform their everyday activities due to chronic medical conditions or permanent disabilities. It also refers to community services such as meals, adult day care and transportation services. However, these services may come with a price and there are several types of cares that one may need. Nursing homes are usually the solution that comes to mind when speaking about long-term care but unfortunately, many Singaporeans may not know the costs involved.



Nursing home typically ranges from $1,200 to $3,500, depending on the types of nursing care required, and whether the services are at home or at Nursing Centres.

Types of Care
Temporary Day Care


For those who are unable to take care of themselves and cannot be cared for in their homes, these patients usually seek help through nursing homes. However, for those who only require temporary help, they tend to go for respite care which costs around $100 - $150 a day.

Care Services at Home


However, in some cases, some elderly may want to have their services rendered at home due to their inability to move. In this case, you may want to opt them up for Home Care Services depending on their needs. This includes Medical Services, Assistance with daily living and activities at their home, and Home Therapy for those who require rehabilitation. These range of services usually cost about $80 - $220.

Intensive Inpatient Care


In some instances where one may be suffering from advanced or terminal diseases, they may require more medical attention or treatment, thus, seeking for Intensive Inpatient Care. As the services require more skilled and advanced treatment, it does not come cheap. Hence, these services usually cost up to $7,000 per month or more.





Government Subsidies



There are also subsidies for those who have lower household income. However, these subsidies are only applicable for Singaporeans and Permanent Residents.



However, Nursing Homes are normally divided into VWO Nursing Homes and Private Nursing Homes which provides Financial Assistance to those are unable to afford the nursing home fees.



VWO Nursing Homes receiving MOH subsidies



Agency for Integrated Care (AIC) may refer patients who meet the means test criteria to VWO Nursing Homes which receives subsidies from MOH. VWOs also provides additional support if the patient requires further financial and social assistance.



VWO Nursing Homes that do not receive MOH subsidies



Some VWO-operated Nursing Homes do not receive MOH subsidies as they are funded through their own fund-raising. Even though patients here are not subsidised by MOH, these VWOs are able to provide the necessary financial and social assistance to patients who are unable to afford the Nursing Home fees



Private Nursing Homes under MOH portable subsidy scheme



MOH has also extended subsidies to patients who meet the means test criteria and are admitted to Private Nursing Homes. As they are referred by AIC, Private Nursing Homes under the MOH portable subsidy scheme have allocated a certain portion of their beds for patients who are eligible for MOH subsidies.



Private Nursing Homes which are not under the MOH Portable



Nursing Home who fall under this category do not receive any financial assistance or subsidies and patients would have to pay for the full amount by themselves without any financial aid.



This aspect is often neglected and not taken into considerations by many.



Hope this article would help you understand more about the considerations to be taken when Long-Term Care is needed.



“Aging is out of your control. How you handle it, though, is in your hands”

ElderShield premiums are kept affordable to ensure that all Singaporeans have basic financial protection in the event of a severe disability in old age. The premiums are based on the age at which you join the scheme, and payable until the policy anniversary after your 65th birthday. Premiums can be....

21/07/2021

2 Major Learning Points from the Hyflux Saga
Hyflux's financial position had weakened over the years, and today, the beleaguered water treatment company is currently facing the prospect of selling its biggest asset, its Tuaspring water desalination plant, to PUB for zero dollars if it fails to rectify defaults by April 30, 2019. This has been a big shock for many retail investors, and here we have summarized the top 2 learning points from this incident.
1. Understand what you invest in
Most retail investors do not fully understand the company or instrument they invest in. Many invest out of market sentiments and speculation (hey I heard company ABC is going strong, you should park some money there!) On the other hand, retail investors plough through company financial reports, balance sheets and cash flow statements in order to find out the actual financial status of the company, its prospects and risks, before deciding if the returns are worth the risks. That being said, it is not easy to fully grasp the financial standing of the company and be able to accurately speculate its future performance. In this case study of Hyflux, no one could have guessed that electricity prices could decline and hurt the company to such extent.
2. Diversify your portfolio and re-balance it as you age
As cliche as it may sound, one of the wisest philosophy is to not all your eggs in one basket. Spread your assets and investments across different asset classes, instruments, risks, market, geographical regions and time horizon. You can expect less volatility from market movements for your investment portfolio in general and diversification still serves as one of the best tool of risk hedging and management today. As you age, there is also a need to re-balance your portfolio to reflect the level of risk you are willing to take. As a general rule of thumb, as you age, you should begin to transfer some of your investments from high risk to conservative ones. Conservative instruments could be in the form of retirement policies, annuities or any other investments that offer some form of capital protection and guarantee. This is especially crucial for retirees and pre-retirees (see retiree who put invested more than $200,000 in Hyflux, link below).

https://www.straitstimes.com/business/companies-markets/hyfluxs-financial-situation-a-result-of-its-own-commercial-decisions-says?fbclid=IwAR1em6cSDecfykh3GAL4ZVgSuq3IV8gfXtGRh9wGXjolmh39HMDXRdTOgsM

The gas industry regulator was responding to a reader's letter, "Time for a close look into why Hyflux tanked. This was no typical business failure", published in The Business Times on March 26.. Read more at straitstimes.com.