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Retirement (Annuity)

Retirement Age gets higher worldwide

Friday, 18 June 2010 14:33 Ginny Lim
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The aging population with dwindling birth rate is forcing the government worldwide with public pension system to increase the official retirement age before citizen could get their pension.

Country Current Min. Retirement Age New Proposed Retirement Age Timeframe (Year)
France 60 62 2018
Germany 65 67 2029
Spain 65 67 Not stated
Italy 57 61 2013
Britain 65 for men
60 for woman		 68 2046
The United States 62 - -
Japan 60 - -

Source : The Straits Times, 17 June 2010

In Singapore, our retirement income is mostly derived from CPF Retirement Account monies and our own savings and investment that we have accumulated over our working years. Hence, if you have started savings early and accumulated enough for retirement at an early age, you can choose your own retirement age! You can read more on how to start Retirement Planning early at one of the featured article "Retirement Planning - Start right now the right way!"

 

4% p.a. interest rate for CPF SMA and RA

Friday, 18 June 2010 12:27 Ginny Lim
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CPF Board has just announced that CPF members will continue to receive 4% interest per annum on their Special and Medisave Accounts (SMA) savings from 1 July 2010 to 30 September 2010.
 
Since 1 January 2008, savings in the SMA will earn an interest rate pegged to the 12-month average yield of 10-year Singapore Government Securities (10YSGS) plus 1%, adjusted quarterly. However, the Government will maintain the 4% p.a. minimum rate for interest earned on all SMA and Retirement Account until 31 December 2010. Beyond this date, interest rates on all CPF accounts will be subject to a minimum rate of 2.5% p.a.
 
For the period 1 June 2009 to 31 May 2010, the 12-month average yield of the 10YSGS plus 1% worked out to be 3.59%. Since this rate is below the minimum rate of 4%, the SMA interest rate from 1 July 2010 to 30 September 2010 will remain at 4% p.a.

 

 

 

Aging Crisis: Are you prepare for it?

Wednesday, 10 February 2010 08:00 Ginny Lim
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The number of people aged over 60 by 2050 is projected to be 1.2 billion, the same population as in China today. This will pose critical economic problem when there are fewer young people in the workforce to support the increasing population of the elderly.

In Singapore, the population of those aged 65 and above is expected to treble to a million by 2030, which is one in every five people.  By 2050, the world’s population of those aged 65 and over will be one in every six people. Japan, Singapore, South Korea and Hong Kong are the four Asian countries among the world’s 10 fastest aging populations.

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Last Updated on Friday, 30 April 2010 04:57
 

New CPF Changes in 2010

Saturday, 13 March 2010 08:00 Ginny Lim
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CPF LIFE
From 2013, CPF members born in 1958 or later with at least $40,000 in their Retirement Account (RA) at age 55 will be automatically included in CPF LIFE. Those with less than $40,000 will not be automatically included at 55. However, such members will be automatically included at DDA if they have $60,000 in their RA then. This $60,000 is equivalent in value to $40,000 at age 55, compounded at 4% over 10 years.

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Last Updated on Friday, 30 April 2010 04:56
 

Reduce Income Tax with Supplementary Retirement Scheme (SRS)

Thursday, 19 November 2009 08:00 Ginny Lim
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Supplementary Retirement Scheme (SRS) is a voluntary saving scheme introduced by the government to encourage Singaporeans to save more for their old age. Singaporeans and foreign workers can open an SRS account at any branches of the 3 SRS Operators - DBS, OCBC and UOB. Participants can then contribute up to $11,475 (for Singaporean, or $26,775 for foreign workers) to SRS at their own discretion yearly.

One immediate benefit for participating in SRS is that you can claim tax relief for contributions made to SRS. Each dollar of SRS contribution will reduce your income chargeable to tax by a dollar. This works out to be a total savings of up to $2,000, depending on your Income Tax Bracket and the SRS contribution. You will need to contribute to the SRS account before 31 Dec of each year in order to enjoy the tax relief in the next year of assessment of income tax.

Before end of this year, you can reduce your income tax by contributing to your Supplementary Retirement Scheme (SRS). And read on NTUC income products that will help to grow your SRS money that beat the silent thief, i.e. inflation. 

Read more...
Last Updated on Friday, 30 April 2010 05:20
 
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Newsflash

Prudential Buy AIA for S$50b, 05 Mar 2010

Prudential has just confirmed that it intends to pay US$35.5 billlion (S$50billion) to buy American International Assurance (AIA), the Asian life insurance arm of American International Group (AIG).

This deal will help AIG to pay back some of its US$182.5 billion debt to the US government. Prudential will pay US$25 billion in cash and US$10.5 billion in stocks and other securities for AIA. Prudential will raise the cash of US$25 billion by selling US$20 billion worth of shares and another US$5 billion by selling bonds. AIG accepted Prudential’s offer since the price offered is much better than the initial public offering of AIA in Hong Kong which could raise for about US$15 billion. Together with the earlier purchase of UOB Life Assurance (now named Prudential Life Assurance) from UOB for $428 million, Prudential will becomes the largest life insurer in Singapore, Hong Kong, Malaysia, Thailand, Indonesia, the Philippines and Vietnam.

There are likely to have some repercussion from this take-over. There may be job losses due to duplicate functions such as Finance and Human Resource. However, the combined sales force of 7,800 will not be affected. Prudential share price tumbles by almost 20% in just two days in March 2010, amid concern over the price of the deal. Prudential is currently valued at about S$25.8 billion. With the rights issue to be offered, there will be mass dilution to the current share price. AIA policyholders should not be too concerned on their policy contracts since Prudential is obligated to honour the original contracts.