Posts Tagged ‘CPF’

Can you really retire with CPF, Singapore’s retirement plan

Monday, June 22nd, 2009

Speaking about retirement. In US, they have Social Security. In Singapore, we have CPF.

Most Americans have no faith in Social Security, with young adults today believing there won’t be any money left by the time they retire. The average Singaporeans trust the Government has planned for their retirement, and has it covered through the CPF scheme.

Now the good thing about Americans being skeptical about no retirement money coming from Social Security, is some of them are slowly socking away money into their own personal retirement plans like 401(k) and Roth IRA.

The bad thing about Singaporeans thinking CPF is sufficient, is that aside from the compulsory 20% CPF contributions each month, few are putting aside additional funds in their own retirement plans.

Recent CPF Trend reports that only about 33.8% of Singaporeans aged 55 met the minimum sum requirement of $106k.

According to CPF Life, with minimum sum in 2023, one can expect $570-$620/mth on a Life balanced Plan. Taking into account inflation, this sum gets even smaller. And this has to cover food, medical, electricity/phone bills, property tax, transport, etc etc.

In Summary,
– In 2008, about 66.2% of Singaporeans aged 55 do not have minimum sum
– Majority of Singaporeans would have pledged their property as half of minimum sum
– Minimum sum might not be sufficient to retire on
– Essentially, more than 2/3 of Singaporeans above 55 will not be able to retire
– Start planning for your own retirement. Do not rely solely on CPF

Should I use a real estate agent? What does an agent do?

Saturday, April 4th, 2009

(Part of “The Almost Complete Goondu’s Guide to Buying a HDB Flat in Singapore” series.)

As a first-timer, most would have absolutely no clue where to start, how much flats should cost, or how the whole ‘getting a flat’ process works. If you are such a person, maybe you should use a real estate agent.

Others who can consider using a real estate agent are those who do not want to spend the time (or cannot afford to) searching for flats available, and co-ordinating the viewing times.

If it’s your first time buying a resale flat, an agent can advise you on the following:

1) Are you eligible for a housing grant?
– If yes to above, what grants are you eligible for.

2) Are you eligible for a HDB loan?
– If yes to above, how to go about applying for a HLE.
– If no to above, how to go about getting pre-qualified for a bank loan.

3) If you’re getting a bank loan …
– Your agent will refer you to a bank loan officer
– How much cash you need to fork out.
– Which bank offers the best interest rates?

4) How much you can afford to pay for your flat
– How much would your ‘dream flat’ cost
– This would narrow down the areas you can live in or
– The type of flat you can buy in your desired area (eg. 3IMP, 4A, 5Std etc)

5) Viewing of units
– An agent will do all the co-ordination involve with the above, and find units within your budget.
– This is the most time-consuming part of the search.
– However, they have paid for tools that make their search more comprehensive.

6) Making the offer
– An agent can help you negotiate on the final price of the unit, and the COV if any.
– Before you sign the papers or write a cheque, your agent should have verified the ownership of the flat.
(Now you wouldn’t want to write a cheque out and later find out the person wasn’t the owner!)

7) The appointments
– An agent will be there with you for all your HDB appointments, and the collection of your key.
– He’ll point you where to get your fire-insurance and activate your PUB


Do you need an agent, or can you do it all yourself?

The best analogy I can come up with, is that a real estate agent is like a tour guide on a guided tour. You’ll just have to follow the itinerary given, sit back and enjoy the trip.

Sure, you can go free and easy, but some people just don’t like having to do all the research and finding out where to stay, what places to visit and how to get there. A tour agency settles almost everything detail for you, saving you the hassle of doing it yourself, and likewise, a real estate agent. For a fee of course.

You should be able to find out most of the information for (1)-(4) reading this site.

Most people don’t want to deal with the hassle of dealing with seller agents when co-ordinating viewings of flats (4). Often, if you make calls to ads in the classifieds, you may be told the unit is not available anymore, and are asked “Do you need help looking for any other units?”.

Actually, the unit never existed, and agents do make bogus ads to ‘fish’ for buyers requiring their services. By saying you need help, you are verbally engaging them for their services.

There are also cases where after you view a flat and want to put down a deposit, the seller’s agent will demand that you pay him a commission too. If you refuse, and make an offer, you’ll get a phone call later saying that ‘the seller has rejected your offer’.

Everybody wants their whole flat transaction process to be smooth, so most first-timers would use an agent, to ensure that they didn’t miss out any steps, which might later lead to hiccups, or in the worst cases, law suits.