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I agree with you. Liberating CPF for housing has resulted in two evils : Not enough money for retirement and escalating housing prices.Reply
You may want to include “ways or direction” in balancing between,
1. Paying the housing loan early (partial payment) AND,
2. Trap of AHWL.
it pretty shocking to realise that you need to service the home loan using cash out of the “comfort” of using CPF.
i am one if not of the earliest batch to be hit, the consolation price is that the outstanding loan are less than 10k. I need to fork out cash for a few months before the AHWL is available again.
Do you think it is sustainable to keep this minimum sum as retirement fund and AHWL for Hosing Loan? what happen if there is a repeat of Asia Fincial Crisis or sorts.
are the people going to be better off? looks like their hands are really tied up this time around.
Are this policy a mistake?
A Concern ResidentReply
Personally, I think it is not a good idea to allow CPF for housing use. It has created two problems: insufficient funds for retirement and runaway property prices.Reply
I agree that CPF is suppose to be our retirement funds and i can see what you mean. Ya probably we are too comfort paying the housing loan without forking out cash (prior 2002) AND that has caused the runaway property price.
OK let say half of singapore population are in this trap – cannot meet the minimum sum and still paying for housing loan at age 55.
what is the way out here? lightly to happen based on current astronomical housing price?
A concern resident.Reply
There’s no simple way out. The government will simply tell you to downgrade your flat or sell back part of your lease.Reply
In economics, we have this principle known as the Tinbergen principle, basically it means you should not be using one policy tool to achieve two different policy goals.
Here, the original plan for CPF is to fufill the goal of retirement needs. Over time, CPF also took on the role of fufilling home ownership. Then it becomes the tool for healthcare, for education and so on and so forth.
As a result, the original goal of retirement became impossible to reach with CPF.Reply