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RETIREMENT PLANNING STARTS EARLY
FOR THIS YOUNG COUPLE |
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Geraldine and Kevin Aloysius are only in their 20s, but both know they need to plan early if they want a comfortable retirement.
So, although most of their earnings are ploughed back into their new businesses, they buy insurance and are making a conscious effort to save for their golden years. The couple also decided to start married life on a cost-conscious note as both had just quit their jobs to start their own ventures.
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Simple but elegant
Instead of a lavish wedding, the newlyweds opted for a no-frills ceremony. Rather than a traditional gown and suit, Geraldine, a Peranakan, wore a kebaya, while Kevin, who is Indian, donned a "kurtha". The total cost of the simple but meaningful reception for 450 guests – $12,000, a fraction of what an average wedding would cost.
Noted Geraldine, 26: “We try to stretch every dollar as much as possible. Instead of an expensive wedding, we saved the money and used it for our renovations.”
The resourceful pair practised the same prudence when it came to renovating their 4-room Ang Mo Kio flat. By painting it themselves and furnishing it simply, they pulled off stylish results on a budget of just $15,000. They even got their pet pooch, Russell, for nothing, via the Internet! | |
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Style on a shoestring |
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The couple may be careful with their money, but this has not stopped them from enjoying the good things in life.
Said Kevin, 28: “Life’s really unpredictable. So, we put aside a small amount every month as savings for rainy days. But we’re comfortable with what we have and more importantly, we’re happy.”
Indeed, this is a couple who is on the right track for retirement planning through careful budgeting and regular savings. |
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Budgeting is planning how you divide your monthly income to meet your different needs and wants. |
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Save first, then spend the balance. Save for retirement, emergencies and other purposes, eg a holiday. |
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Live within your means. Avoid living on credit. |
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Distinguish between needs and wants. Set aside money for items you can’t do without, like food and transport. Wants are things that are good to have after you have met your needs, eg branded goods. | |
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Help is at hand if you are looking for tips to make smarter financial decisions. MoneySENSE, a nationwide financial education programme launched on 16 October 2003 by Deputy Prime Minister Lee Hsien Loong, aims to help you better manage your finances, invest sensibly and plan for the future. The MoneySENSE programme is a joint effort by six government agencies, including the CPF Board. To check out practical hints and other tools, go to www.mas.gov.sg and click on “For The Consumer”. Watch a skit to learn about smart money management! Check www.centralsingapore.org.sg’s event calendar for dates and venues. |
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PUT IN $50 BY 31 DECEMBER TO GET ERS! |
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If you have not contributed at least $50 to your CPF this year, you should do so now to qualify for the second lot of Economic Restructuring Shares (ERS)! You can also help your loved ones to top up their CPF accounts.
The ERS is part of a government assistance package to help you offset the increase in the Goods and Services Tax (GST) from 4% to 5% in 2004. Eligible Singaporeans will get a total of $600 to $1,400 worth of ERS, depending on the Annual Value of the home they live in and whether they have done National Service.
The ERS is being distributed in three lots. The first lot was given in January/February 2003. To qualify for the second lot, you must be a Singaporean who is at least 21 years old on 31 December 2003, and have deposited at least $50 into your CPF account this year. |
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Easier To Get Last Lot Of ERS! |
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The Government is making it easy for you to get the 3rd and last lot of ERS in 2005. If you transfer $50 to your CPF when you exchange your ERS for cash, this will automatically qualify you for the last round of ERS. |
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Special for Senior Citizens! |
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If you’re at least 62 years old on 31 December 2003, it’s now easier for you to get your ERS. Simply indicate on the voluntary contribution (VC7) form you received in late October that you wish to exchange your ERS and transfer $100 into your CPF. When you do this, you’ll get the second and third lots of ERS without having to make a cash deposit in your CPF! You can get extra copies of the form at any Singapore Post office. |
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Note: Those who put in $50 in their CPF or submit their VC7 forms to CPF Board by 30 November 2003 will receive their ERS on 1 January 2004. Those who do so by 31 December 2003 will get their ERS on 1 February 2004. More information is in the packages sent to all households in late October, and also at www.ers-nss.org.sg . You can also donate your ERS to help the needy through this website. | |
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Housing |
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The CPF Withdrawal Limit for properties bought in 2004 is capped at 144% of the valuation of the property. |
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From 1 January 2004, the cap on the CPF withdrawal limit for the purchase of private residential properties and HDB flats financed with bank loans will be reduced from the current 150% to 144%, and thereafter cut by 6 percentage points every year to reach 120% on 1 January 2008 . This is to encourage prudence in buying a home you can afford, so as to protect your retirement savings. | |
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A 2% cash downpayment for HDB flat purchases financed with bank loans. |
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A 10% cash downpayment on HDB flats financed with bank loans is being phased in at 2 percentage points per year over five years, starting from 1 January 2004. This is to protect your CPF savings against losses in a property market downturn. | |
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Lower Salary Ceiling |
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Salary ceiling lowered, from $6,000 to $5,500. | |
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Medisave Minimum Sum |
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If you meet the CPF Minimum Sum, you must have at least $2,500 in your Medisave Account before you can withdraw the rest of your CPF at age 55. This will increase by $2,500 every year until it reaches $25,000 (in today’s dollars) on 1 January 2013. | |
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