Saturday, September 29, 2007

There's a lot of anger and fear over our CPF changes. A lot of questions about what the govt is doing with our money, making us buy a compulsory annuity which we can only cash out if we survive past 85, and how many of us are likely to do that?

It's like a bet: we all put our money in a common pot and if we make it past five years as an octogenarian, we win and we can take our share (plus interest) back in monthly installments. If we don't make it, well, that's the nature of gambling -- win some, lose some. Sure, S'poreans make a national pastime of 4-D and Toto, but who'd have thought CPF would be the latest game S'pore Pools is offering?

I dunno. I'm not really into that debate at the moment. I have more pressing concerns about my CPF. Like how my personal CPF contribution to our housing loan is practically servicing only the loan interest, while June's contribution can only put a tiny dent per month on the principal. And next month, the interest rate is going to be revised again, more likely up than down.

What this works out to is that a truckload of my money doesn't belong to me, but it does pay for my right to own a house... eventually. It's a loss making proposition since the market for my location isn't likely to return to the high, heady time that it was when we bought it. So barring any unforseen incident, we'll be staying put for a while.

This morning, we were at our local HDB office transferring a large chunk of our accumulated CPF to reduce our loan to 10 years from 18. That's 8 year's worth of interest saved, if I calculate correctly.

10 more years to pay for my flat, then maybe I can start worrying about whatever money I have left to retire on.

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