EVERYONE has to work in order to have money

Singaporeans have the highest saving rate in the world. Over here in Singapore, EVERYONE has to work in order to have money. Then how did we still able to obtain the highest saving rate in the world in spite of high living cost and standard?

All thanks to the brilliant idea of “compulsory” savings over here called Central Provident Fund (CPF)system. (This review of Singapore’s alternate welfare system was written by an Associate Professor of Economics in the mid 90s.)

As I mentioned before, we do not have the same kind of welfare system in the west, esp in north america, where you might not necessary need to work just by declaring you are disabled or “something” else, and you could use it as a “cushion” and be taken care of for the rest of your life. Of course it’s not a good sign where the taxpayers have to keep paying tax to “take care” of them.

Singapore has an unique system whereby everyone’s salary would automatically be deducted and contribute to your personal CPF (Central Provident Fund)account monthly. And yes, you do earn interest while letting your money sit in the CPF account.

There are 2 types of account in our CPF-The ordinary account and Medisave(you could only use medisave for medical purpose once you reach 55 yrs old)

It doesn’t matter if you are Singaporean or foreigner living in Singapore. Once you start working here, you will automatically become a member of the CPF, and your salary will automatically be deducted accordingly and contribute to the CPF fund.

Contribution By Employer is 13% (To the employee’s account)
Contribution By Employee is 20% (To our own account)

You are entitled to get back all the saving once you retire at age 55.

(For foreigners, you don’t have to wait till old age to get the money back, it will be returned to you once you have stopped work and intending to leave the country)

All of us could access and monitor our own account by visiting the CPF board or by the website here (by using our password).

In the past, this policy was “tougher” (for Singaporeans) and won’t allow you to use it for other means except using it as retirement fund. But nowaday the govt has changed the policy and allowed us to use the money for other purposes like investment e.g. in housing or marriage. (There is still a mimimum to keep in your own CPF account as the govt does not want anyone to go bankrupt by taking all out at the same time)

I do not how many countries have this kind of system already but I do know that this system has been adopted by China (one of the few systems they’ve learnt from us) when they first opened up their economy in the 90s, and now even the Chinese China ppl has more saving than the Americans. (In China, they’ve called the compulsory saving scheme as “something else”, not “CPF”)

This is a system that is bulletproof whereby individual can’t beat or “abused” it. It minimizes the no. of bums or wasted people in the society, and everyone is motivated to work and be an active member of the society. It also helps us to have enough money when we retire, and to be taken care of once you have reached an old age. Afterall, it’s your own money that you EARNEDrighteously.

That is one of the main reasons why there is no homeless or beggar in Singapore, and we have the highest rate of home ownership in the world.

Nobody owes you a living here in Singapore, as it’s very much *YOUR OWN responsibility* to take care of yourself.

And of course, this system will only work if you have a honest and clean govt.

taken from : www.43things.com