In my previous post on the merits of CPF Minimum Sum, one of my readers Fred Khoo pointed out that the CPF Minimum Sum (MS) scheme is a national failure and that the government should not “lock up” Singaporeans’ CPF monies. Well, one thing for sure is that most Singaporeans would have strong opinions on the CPF scheme but it does not mean that the CPF MS scheme is a flop. Indeed, there are flaws and improvements that can be made to enhance the policy to better suit Singaporeans’ needs. However, it should be noted that the merits of CPF MS far out-weigh the flaws. The recent case of Madam Goh vindicated my point.
As a cleaner, Madam Goh lives alone in a studio flat. After working for 60 long years, she managed to scrimp and saved more than $400,000 of life savings. This is an amazing achievement as apparently, she is uneducated and does not possess any skill. I reckon many wealth builders in Singapore are confounded by the amount of her nest egg. But unfortunately, she lost all of it in one day to 5 con artists from China. In my heart, I was wondering how heartless these PRC Chinese can be but that is beside the point here. Anyway, these con artists must have targeted her for quite some time before committing such a heinous act. They must have gathered a lot of information that she is cash rich and does not have social support, hence this made her an easy target for them.
Can this unfortunate event be avoided? Definitely. In one of my older posts, I have advocated that senior citizens should not hold too much cash on hand even if they are really cash rich. This is because the money would easily be squandered away. In the worse case scenario, having too much cash on hand could make you an easy target for criminals as well. In Madam Goh’s case, she should count herself very lucky that the con artistes did not murder her after taking her money.
Many Singaporeans argued that there should be more flexibility in the CPF MS scheme and that Singaporeans should be allowed to withdraw their monies at 55 years old. Many also criticized the relentless increasing amount for the MS and complained that it is a never-end game for them. What many Singaporeans fail to realize is that most of us are financially incompetent to manage our monies. When we received a wind-fall, we tend to spend it away instead of using the capital to generate more money for retirement. In Madam Goh’s case, if her monies are in her CPF account, this unfortunate incident would not have happened to her. Now, she has to start all over again and build up her nest egg at such an old age. I am not sure how many people can remain sane after going through her ordeal but she has earned my respect for being able to take it in her stride.
Three things you must take note if you have elderly seniors/parents staying alone:
1) Make sure they don’t hold too much cash. Otherwise, set up a joint account with them to ensure that they do not squander their life savings away. It is okay to have the occasional self-indulgence but encourage them to live simple as their earning abilities decrease substantially with advancing age. Advise them to refrain from revealing to others about their life savings and best not to lend money to others.
2) Nowadays, many Singaporeans choose to stay away from their parents, so it is important to frequently stay in touch with them to provide the family support. If your elders are illiterate and don’t read the news, then you should make the effort to highlight to them the recent criminal acts taking place in Singapore. This would increase their vigilance.
3) Most importantly, do not reveal personal information and your financial status to strangers. Many personal financial bloggers like to showcase their investment holdings in their blogs. But they don’t realize that their account could be hacked and sensitive information could be pieced together by cyber criminals to swindle away their monies.
What happened to Madam Goh was a classic swindle scheme. In today new age technology, your savings can also be wiped out from your bank account in one day if you are not careful in safeguarding your personal information. What happened to Madam Goh can also happen to you.