People Migrating all over the world ?

I happen to chance upon this very interesting article about Why many Singaporean want to migrate. I just had to post it here and let the people know whats happening, its not that it only happens in Singapore but I can say that its all around the world
Its pretty lengthy but it reflects the true current situation of what Singaporean will have or rather face near to their retirement age. I myself wonder.

I will post the link to this article as well because there is already 400+ comment on this article and some seems pretty interesting, if you like you can add in your thoughts on this

Leong Sze Hian

I refer to the article “Singapore
envies Kiwi lifestyle
” (New Zealand Herald, Feb 9).

It states that
“The bait was better working hours, cheaper cars and housing – and
in three weeks thousands from Singapore have registered their interest
in living in New Zealand.

An Immigration New Zealand pilot
project aimed at attracting Singaporean migrants has resulted in over
1000 registrations each week since it was launched last month, with 3565
potential immigrants having registered their interest in just three

According to another article “Survey
finds that workers in Singapore put in longest hours
” (The China
Post, Jan 12),

“Singapore’s workers continue to lead the pack when it comes to
the number of hours they put in at work, according to a report by the
International Labor Organization (ILO). The report puts them at the top
of 13 economies in the group’s Global Wages Report for 2008-09,
surpassing even the notoriously hardworking Japanese and Taiwanese”.

Singaporeans are among the hardest workers in the world, but do not
have enough, upon retirement, to live in comfort in their home country.
Is there any wonder why they should choose to migrate to other places
that are much more affordable?

Cars for example, are so expensive in Singapore that a car owner may
end up with $2 million less in retirement. This is calculated from an
estimated cost of $1,000 monthly compounded at 6 per cent over 40 years.

To explain the poverty of retired Singaporeans, we’d have to explore
the possible link between the 2 largest entities that effectively ‘lock
up’ the wages of Singaporeans – HDB and CPF.

Increasing flat prices
decrease the amount of CPF upon retirement

In line with the government’s policy of letting Singaporeans use
their flats for asset enhancement, many Singaporeans have bought their
flat, using the bulk of their CPF in a typical 30-year mortgage, in hope
that the continued increase in property prices would serve as a boon
during retirement.

By pricing flats under ‘market subsidy’ pricing, asset ‘enhancement’
schemes such as upgrading inevitably become a burden to Singaporeans who
have no choice but to use even more of the CPF for their upgraded HDB
flat. In addition to that, HDB has never disclosed the cost of building
flats. Thus, flat pricing, and the amount of CPF ‘locked’ in it, is
really at the whim of property speculation.

With 80 per cent of the population living in public housing, and with
a bulk of a typical homeowner’s CPF savings ‘locked’ by the flat,
social security for the average Singaporean is contingent on HDB
policies. When you can’t pay your mortgage, you may lose your home and
maybe your life CPF savings too.

Consequently, with the bulk of their CPF ‘locked’ in unliquidated
assets, many Singaporeans end up with very little CPF when they retire.

CPF gets transferred out of
Singaporeans’ hands, into HDB’s pockets

When the HDB sends a notice of Compulsory Acquisition to flat owners,
90 per cent of the flat’s valuation is used to offset the loan arrears;
HDB makes a profit of 10 per cent of the valuation. While it is
understandable that HDB as a statutory board has to run on a sustainable
business model, it seems counterintuitive that a public housing board
should profit from the destitution of its citizens.

For example, flat owners in addition to losing 10 per cent of their
flat valuation to HDB, are only given one month to vacate their flats.
Why does the HDB not give them a bit more time to find alternative

As a public housing authority with the mission to provide affordable
housing for Singaporeans, is the HDB not in a sense, in breach of its
fiduciary duty, in this arbitrary practice of ‘pinching’ 10 per cent of
the valuation?

Are there any public housing authorities in the world that takes an
additional 10 per cent profit on foreclosure?

Parliamentarians may like to raise this issue with a view to
refunding the ‘pinched’ valuation to all past foreclosed flat owners.

Why it’s almost impossible
to get enough cash upon retirement

Effective last year, if you sell your HDB flat after age 55 to
downgrade to a smaller flat and to monetise your flat for retirement,
any CPF utilised plus accrued interest has to be returned to the CPF
account if the CPF Minimum Sum (MS) has not been met.

With the current MS at $117,000, what this policy change means is
that this sum cannot be used to purchase the smaller flat downgrade.

Why are we making it harder for Singaporeans to downgrade to monetise
their flat for retirement?

Many Singaporeans subscribed to the call for asset enhancement by
purchasing HDB flats – only to be hit by the policy change now, which in
effect, may result in their inability to cash out of their “enhanced”
HDB asset.

The CPF Minimun Sum (MS) was raised from July 1, 2009, for those aged
55 years, to $117,000, up from $106,000. 

This is an increase of 10.4
per cent, much more than the inflation rate for the previous year, which
was 6.5 per cent. How can the increase in MS be “an adjustment for
inflation, is to ensure that Singaporeans set aside sufficient savings
for their retirement?”

Similarly, the MS was increased by 6.4 per cent in July 2008, from
$99,600 to $106,000, when inflation was only 2.1 per cent in 2007.

With the current recession, some of those reaching age 55, may have
lost their jobs or failed in their businesses, and thus a large increase
in the MS, may cause some financial stress to them. 

As last year’s
increase is the highest in the history of the MS scheme, at its current
quantum of increase, does it mean that by 2013, the MS may be about
$161,000 ($117,000 now plus $11,000 increase for 4 years)?

Can anyone afford to retire
in Singapore in future?

The Longevity
Insurance Committee’s (LIC) CPF Life report
last year only
projected a MS of $134,000 in 2013 (chapter 4). 

Adding the projected
Medisave Required Amount (MRA) of $36,000 in 2013, does it mean that
those reaching age 55 may only be able to withdraw $5,000, if they have
less than $197,000 (MS $161,000 plus MRA $36,000) in their CPF? 

many Singaporeans will have more than $197,000 in their CPF in 2013?

The answer can be found in the LIC report: only
60 per cent are projected to have at least $67,000 in their CPF in 2013

At the current rate of increase of $15,500 per year ($11,000 MS +
$4,500 MRA), will the combined MS and MRA be $352,000 and $507,000 in
2023 and 2033 respectively?

In conclusion, is it any wonder why so many Singaporeans may be
thinking about migrating to New Zealand?


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