Thursday, December 30, 2010

CPF becoming Income Tax

CPF was originally conceived as a mechanism to help Singaporeans save money for their retirement, in case they didnt do it themselves - a very legitimate and right thing to do, like many of the other policies created during the time when LKY is still in his prime, thinking clearly, connected to the ground and when the government is serving the people.

But over the years, after the government changed their philosophy from "serving the people" to "economic growth over everything", good intended policies starts to get corrupted and perverted.

"...the government changed their philosophy from "serving the people" to "economic growth over everything""


In recent times, the Government had announced that the retirement age will be raised from the original 55 to 65. As a result, the CPF will be freeze for another 10 years. That also mean that my mother whom is approaching 55, whom should be retiring soon, CANNOT retire and have to work for another 10 years. I wonder where...

In a country where prosperity was promised to be shared among everyone to make everyone's life better, it can't be further than the truth.

By raising the retirement age to 65, it effectively made CPF a form of Income Tax. And the payout, a form of welfare system which.... you actually paid it yourself - like Insurance with minimum interest rates.

"By raising the retirement age to 65, it effectively made CPF a form of Income Tax."


According to the statistics (http://www.singstat.gov.sg/stats/keyind.html), only less than 20% of the people at the moment now can live to the age of 65. It should increase in the near future BUT think abt this: in the modern day of polluted world, increased stress, increase health problems, and curse of diseases - how many can actually live past that 65. How many can still enjoy their life of retirement at 65?

According to Wikipedia (http://en.wikipedia.org/wiki/Retirement), even in European countries, almost all the countries have less than 50% of the people past 60 still working in the work force. These are countries which also had their normal retirement age set at 65.

"...almost all the countries have less than 50% of the people past 60 still working in the work force. These are countries which also had their normal retirement age set at 65."


As a boss, would you want to hire even a 50 year old employee to work in positions in the lower rang of your company hierarchy? In the new economy (post 2010), the world is going to be increasingly competing through the use of innovation and design - in such a world, how does the older workforce find employment when everyone is looking for creative and trendy thinkers. Must a former director really go to be a taxi driver or a former manager become a kopitiam worker to fulfill that 65 retirement age?

What is retirement?
Retirement is the moment when people stop working and enjoy the fruit of their labour after over 30-40 years of toiling and struggling.


Even if I'm just 27 now, the thought of working to 65 is scary. CPF means nothing to me but just another name for a separate Income Tax (its based on your income isnt it?) and retirement age of 65 is simply the "marker" to qualify you for the welfare system camouflage as "CPF" (which the government kept saying they dun want to be a welfare state).

"...its just a branding exercise to make a 2nd Income Tax sounds NOT like an Income Tax."


Its simply the same thing as another country, setting a higher Income Tax level but have a welfare system to ensure you have money to stay alive after retirement - just that the government make it sounds like its doing it for you, but its just a branding exercise to make a 2nd Income Tax sounds NOT like an Income Tax.

1 comment:

micky said...

If you think that by the time you reach 65 years old you can get your CPF.... think again. There's another 38 years to change the goal post again.