The government has re-affirmed its stand that they will not allow parents to use their CPF for their children’s overseas education. It fears that the parents will be left with little retirement funds should their children not pay back their parents.

Currently, CPF members can use up to 40 per cent of their Ordinary accounts to pay for their children’s education in local tertiary institutions only.

No CPF for Studies Abroad (Straits Times)

Parliament has just passed changes to the CPF Act to auto-include those with $60,000 in their Retirement Accounts at the age of 65 into the CPF Life scheme.

Previously, only those with at least $40,000 in their Retirement Accounts when they turned 55 from 2013 would have been auto-included in CPF Life.

Now, those with at least $60,000 in their RA when they are 65 from 2023 onwards will also be compulsory opted into the CPF Life scheme.

This change will affect mostly those whose CPF balances have some additional form of net inflow (on top of CPF interest) from the age of 55 to 65. These could be from property refunds, top-ups, interest income and employment wages if the members continue working.

According to Manpower Minister Gan Kim Yong, the change will increase the participation rate of the scheme’s first auto-included cohort from 70% to 80%.

Mr Gan also announced other changes of how CPF savings of deceased members would be disbursed to their beneficiaries.

From January 2011, CPF members can choose to have their savings transferred directly to the CPF accounts of their nominees, instead of having the payouts made in cash upon their death.

Also, the CPF Board will automatically disburse the money to the nominees instead of having to wait for nominees to apply for the bequeathed funds.

Changes will also be made to the way the CPF Board manages unclaimed monies of deceased CPF members.

CPF savings left unclaimed for six months upon the member’s death will be moved into the Ordinary Account, which pays a lower interest than that for the Special, Medisave and Retirement Accounts.

These CPF savings, if left unclaimed for seven years following the death of a member, will be taken over by CPF.

Over the last few years, the beneficiaries of about 280 people who died annually who have not come forward to claim the money amounted to about $2.4 million each year.

I suppose the last two changes pertaining to the unclaimed monies of CPF will apply more for those people who do not make CPF nomination as those with nomination will have their money disbursed automatically to their nominees.

If you do not have an existing CPF nomination, it is wise to make one today. Note that CPF nomination becomes invalid upon marriage so you will need to make another nomination if you get married.

Maybank is currently running a very innovative giro payment promotion scheme for their credit card holders.

Under the Maybank Pocket Me Giro payment system, your Maybank credit card bills will be automatically paid each month using giro.

Maybank will also give you cash rewards into your bank account based on the bill size rounded up to the nearest $5.

For example, if your outstanding credit card bill is $103, you will get a $2 cash reward for that month. If the bill is $200, you will get $5.

The promotion will run from 15 June 2010 to 30 June 2011. The cash reward awarded will be up to a maximum of S$5 per month till 30 June 2011.

Kudos to Maybank for coming up with this. With Pocket Me Giro, you won’t forget about paying your credit card bills fully (save on interest) and you even get rewarded for doing so!

I have been using Microsoft Money for many years to monitor my personal finances and investments.

The bills tracking facility is useful as it allows me to enter recurring billings, and keep track of all bill payments so I will never miss a deadline.

The customised reports allow me to see at a snapshot all the assets and liabilities in my balance sheet (and over time), as well as evaluate my investment returns (both actual and annualized) across different products and accounts.

Last year, Microsoft announced that they would no longer be supporting the Microsoft Money line of products. There were too many competitors providing similar products and it’s no longer worthwhile for them to keep developing it.

I tried to search for a suitable product that I can migrate my data to but it wasn’t exactly successful. There were a few online services (like Mint) that catered more to the US market. Some of these were really good as the data can be streamed directly from the bank accounts to the service providers so there is minimum data entry required.

Can’t find something similar and good for the Singapore market though. I guess our market is too small.

Quicken is probably one of Microsoft Money’s greatest competitor. I wanted to buy it but it’s not even available for sale in Singapore (nor from their website)!

An opensource GnuCash looked interesting as it uses double entry accounting for tracking but the data migration from Microsoft Money looked to be a nightmare.

So now, I’m still stuck with Microsoft Money. It still works fine so maybe I will just stick with it. I know most people probably use excel for simplicity. What personal financial software do you use?

About a month ago, Microsoft released a downloadable sunset version of the Microsoft Money products.

It is designed as a replacement product for expired versions of the Money line of products. The download worked even if you did not have a previous version of Microsoft Money installed on your computer.

If you like to try out Microsoft Money to monitor your personal finances, you can download them at the links below:

Money Plus Sunset Deluxe

Money Plus Sunset Home and Business

I received this article about planning for your retirement and thought it would be worth sharing. It covers not so much on the financial aspect, but more on what to do during retirement.

Four Pre-Conditions for Retirement

By Cheng Huang Leng

I retired in year 2000 at age 52. I am now 61, thus I can claim that I got more experience at retirement than most! I thought I should share my experience with mariners because I have seen too many friends and neighbours who became so bored that they have become a nuisance to their spouse and children and to others!

A few of them have solved the problem by going back to work. They were able to do so because they have a skill/expertise that is still in demand. The rest (and many are my neighbours) live aimlessly or are waiting to die – a very sad situation, indeed.

You can retire only when you fulfil these 4 pre-conditions:

1. Your children are financially independent (e.g. they got jobs),
2. You have zero liability (all your borrowings are paid up),
3. You have enough savings to support your lifestyle for the rest of your life, AND most importantly,
4. You know what you would be doing during your retirement.

DO NOT retire till you meet ALL 4 Pre-Conditions. And of course you should not retire if you enjoy working and are getting paid for it!

The problem cases I know of are those who failed to meet Pre-Condition #4.

When asked, “What would you be doing during your retirement?” some replied, “I will travel/cruise and see the World”. They did that, some for 3 months and then ran out of ideas. The golfers replied, “I can golf every day.” Most could not because they are no longer fit to play well enough to enjoy the game. Those who could, need to overcome another hurdle – they need to the find the “kakis” to play with them.

It’s the same with mahjong, bridge, badminton, trekking and karaoke – you need “kakis”! Most could not find others who share their favourite game and playing/singing alone is no fun. AND when they do find them, a few of them found that they are NOT welcomed like my obnoxious neighbour whom everyone avoids.

Thus if you are into group sports or games, you must form your groups BEFORE you retire. You need to identify your “kakis”, play with them and discover whether they “click” with you.

The less sporty “can read all the books bought over the years”. I know of one guy who fell asleep after a few pages and ended up napping most of the time! He discovered that he did not like to read after all. We do change and we may not enjoy the hobbies we had.

Routine Activities To Fill Your Week

For most people, your routine work activities are planned for you or dictated by others and circumstances. When you retire, you wake up to a new routine – one that you yourself have to establish as nobody else would do it for you!

The routine to establish should keep your body, mind and spirit “sharpened”. A good routine would comprise:

a) One weekly physical sport – you need to keep fit to enjoy your retirement. If you are the non-sporty type, you should fire your maid and clean your home without mechanical aids. Dancing and baby sitting are good alternatives.

b) One weekly mind stimulating activity – e.g. writing, studying for a degree, acquiring a new skill, solving problems or puzzles, learn or teach something. You need to stimulate your mind to stay alive because the day you stop using your brain is the day you start to die.

c) One weekly social activity – choose one involving lots of friends/neighbours. Get yourself accepted as a member to at least 3 interests groups. Unless you prefer to be alone, you do need friends more than ever as you get older and less fit to pursue your sport.

d) One weekly community service activity – you need to give to appreciate what you have taken in this life. It’s good to leave some kind of legacy.

With 4 weekly activities, you got 4 days out of 7 covered. The remaining 3 days should be devoted to family related activities. In this way, you maintain a balance between amusing yourself and your family members. Any spare time should remain “spare” so that you can capitalise on opportunities that come your way like responding to an unexpected request to do a job or to take advantage of cheap fares to see places or to visit an exhibition.

Mind stimulating activities

Most judges live to a ripe old age. They use their brains a lot to decide on cases. I am sure MM Lee’s brain works overtime. He’s 80+ and still going strong. In “Today” you would have read of 2 inspiring oldies. One is a granny who learned to play the guitar at age 60 to entertain his grandchildren. She’s 70+ today and those grandchildren have grown to play with her. Another is an Indian radiologist who on retirement, qualified as an acupuncturist. He’s age 77 and still offers his services (by appointment only) including free ones to those who have no income. I guarantee you that they are happy people who discovered a “2nd wind” to take them to the sunset with a smile on their faces.

Mind stimulating activities are hard to identify. They require your will to do something useful with the rest of your life, a mindset change and the discipline to carry it through.

Your Bucket List

Despite your busy routine, you will at times be bored. Then it’s time to turn to your Bucket List.

Your bucket list contains a list of things to do before you kick the bucket. They are not routine and are usually one off activities. You need them to have something to look forward to. These include anniversaries, trips (and pilgrimages), visits to friends and relations abroad, re-doing your home, attending conferences (related to your hobbies), acquiring a new set of expertise. 4 such activities that are spaced our quarterly would be ideal.

Retirement Is A Serious Business

If you can afford to retire and want to, do prepare to live to your fullest. You need to be fit to enjoy it – therefore get into shape now. You do not want to get up on a Monday and wonder what to do each week, therefore identify your set of weekly routine activities now and try them out to confirm that they are the activities that you will be looking forward to doing each week, week after week. You bucket list of “rewards” or “projects” or “challenges” is needed to help you break away from the routine thereby make live worth living. Start listing what you fancy and refine it as you chug along in your retirement. You will have so much fun, you would wish you were retired since your turned 21!

I will be happy to share my personal retirement experience with mariners. Just write to me.

Cheng Huang Leng