Living simply ........

I don't care much for planning the future. I live today for today. Needless to say, I don't have much saving. Whatever "little" I earn, I spend it all. My philosophy is quite simple - how to save for tomorrow when you're trying to eke out a living today? The cost of living has skyrocketed. The fare for public transport has gone up. So has the price of petrol. It's unbelievable the kind of money I fork out each time I pump up petrol for my compact car. It seems to be spiraling up, never coming down, a sentiment shared by all motorists, no doubt.

Other than some insurance policies I bought from friends-turned-insurance agents when I was much younger and none the wiser, I'm really as poor as a church mouse, unless you consider insurance policies a form of 'wealth'. Okay, so I have a car. Technically speaking, it belongs to the bank from which I loan huge amount of money to drive it. The last time I went on a tour of leisure was more then 10 years ago with the slim lady in New Zealand and that was before the arrival of the storks.

An article I read in the TODAY newspaper about our CPF monies has sort of jostled me from my muddle-headedness in financial matters. The HARD FACTS:

Minimum sum at 55 years old-
We are required to keep a minimum sum of $90,000 in our Ordinary Account when we reach 55. This sum will gradually increase to $120,000 by 2013. This means that we can only withdraw anything in excess of that amount. Woes to people who take up 30-year mortgage loan for their house. Well, I happened to be one of these people! By 2013, I'll be 54. If I remember my maths, I'll still be paying for my HDB flat, until the age of 63 when I retire! Forget about the minimum sum of $120,000!

Contribution To The Ordinary Account Does Not Grow With Age:
As we grow older, in line with the lower CPF contribution rates, the amount going into our Ordinary Account will drop from 22% (35 years old and below) to 20% (35-45 years old) to 18% (45-50 years old) to just 12% (50-55 years old). Also under current rules, any excess above the Medisave contribution ceiling ($32,500) will flow directly into our Ordinary Account. However, from July 1, 2006, this money will be transferred to our Special Account instead (for those aged below 55 years), or our Retirement Account (55 years old and above)

Lower Salary Ceiling
From Jan 1, 2006, the salary ceiling from CPF contributions will be lowered to $4,500 per month, down from %5,000 currently. Thus, if we earn $4,800 a month, our combined contribution from the employee and employer for the month will only be based on $4,500. This means more take-home pay but also dwindling Ordinary account contributions for Loan repayments.

These are quite sobering facts. I'll probably work till the day I drop unless I'm too ill to work. I foresee myself begging for handouts from my sons.... Perhaps it's time for me to get rid of my car and start saving now! I hate to plan long term. Because you never can tell what tomorrow may bring. Some will argue that's the precise reason one should start saving, because we never know what the future holds.... But I've grown quite used to driving. Taking the trains and buses just don't sound very appealing to me. And the fact that trains and buses were blown up in London is not helping much to convert me to taking public transport .... We cannot rule out what has happened in London may never ever happen in Singapore... If it happens, what's the use of the money that I've amassed? Might as well enjoy it now... and live today like there's no tomorrow...