[InkCanon]

Singapore's economic policies are complicated and often misdirecting. I'll break down the misconceptions.

The primary purpose of CPF is not a pension scheme. It is structured as a massive forced bond purchase scheme by citizens. Financially what happens is the 37% of citizen income buys a long term bond (till retirement age, on average decades) at rock bottom interest rates (it's pegged to the overnight rate or a minimum of 2.6%). The returns are specifically decoupled from the real long term returns. This has historical roots in the government needing vast capital financing. They make enormous amounts of the delta between the short term interest rate and long term capital gains. Singapore has no oil or natural resources, but it's sovereign wealth fund has AUM in the regions of countries like Norway which do for this reason. It is not a shock absorber like the article suggests. The withdrawal terms are strict - housing, a significant medical expense and retirement are the only real ways to get money out of it.

"Trying to keep people employed" is a goal, not a policy. In fact the Singapore government maintains a large worker supply through immigration. The foreign worker population, ~30%. The main goal of the government is to maximize the absolute number of people working.

The reason it raising the retirement age is effective in workforce participation is because most people have no choice. Retirement only pays out after the age. The working life of an average Singaporean has seen 37% gone to CPF, maybe another 10% to income taxes, another 5% to GST, road tax, property tax, etc. After all this there's the astronomical cost of living. This is also intentional, to raise the number of employees.

[ggm]

Like Dubai, many of the migrant workers are ineligible for post retirement life in Singapore and so despite any mandatory savings will not represent any kind of burden on the state compared to delivery of health and housing and care costs.

So they are functionally productive and net positive to any scheme about post work funding for the community.

[djtango]

You don't pay CPF unless you have Permanent Residence/Citizenship so there isn't any mandatory saving for migrant workers (both low income unskilled and high income skilled labour) AFAIK?

[notahacker]

Yep. As someone who worked on an EP, the difference was that I paid a low rate of tax that didn't contribute towards Singaporeans' retirement income, whereas a Singaporean living in Europe would pay a higher rate of tax that contributed towards Europeans' retirement income

[Grimburger]

This is being entirely disingenuous and is completely different to what goes on in Dubai.

I have lived there and can rattle off plenty of criticisms about the country but complaining about migrant workers who clamour to work in SG is not one of them.

The vast majority of Singapore migrant workforce are Malaysian citizens who live over the border in JB, you can rent a 2 bed apartment there for $300 a month and eat out in a restaurant for $2 while commuting each day to a developed country and earn those level of wages.

To pretend these people have a rough deal compared to back home is absurd and I'd challenge anyone to actually talk to them first before getting on your high horse. Ask them if they would prefer to work in their home country.

[ggm]

I said nothing of the kind you imply. I know skilled workers who were based in Dubai but who expected to leave immediately their work (court transcription) ended and the same with expat Australians and Britons working in Singapore.

The point is not if they get a rough deal or not compared to their home income. The point is that the welfare state costs on the tax base won't be spent to their material benefit, so they are not a cost on the state after working lifetime. Forced saving schemes be they state pension, annuity or superannuation are savings which act as investment capital and i am sure sematek and other bodies leverage this, and then in income phase return to the holder but they are not equal to the lifetime cost of care for the elderly, or provision of housing.

Dubai has much more extreme exploitation of low wage migrant labour, not that none of the workforce in Singapore is remittance labour, filipina nannies and the like but I'm not actually talking about construction site labour or the Dubai passport hijack thing.

[nitaigao]

Dubai has a 90 day visa grace period for job loss. Plenty of foreign labour self sponsor their own visas and there is the golden visa and retirement visa for people aging out.

[mikestorrent]

> while commuting each day to a developed country

Must be a fully automated border or something? That kind of commute would be unthinkable between e.g. Canada and the USA for most folks

[Grimburger]

Woodlands is the busiest immigration checkpoint on the planet and it's only 1 of 2 crossings. It's fairly seamless for regulars apart from Friday afternoons when it gets clogged up by escaping Singaporeans keen for the weekend and the quality/value offered by their poorer neighbour.

https://en.wikipedia.org/wiki/Woodlands_Checkpoint

[sien]

Fascinating.

It appears to be the world's second busiest checkpoint now though if you count the Macau to China checkpoint.

https://en.wikipedia.org/wiki/Border_checkpoint#Busiest_chec...

[Grimburger]

I stand corrected, interesting, I assume its the same and for work?

[JimDabell]

They’ve introduced facial recognition at this border, starting with motorcyclists. You just scan a QR code to get in. If that’s not an option, the gates are automated – you scan your passport and you can walk straight through.

Singapore has the smoothest border controls I’ve ever experienced; it takes me less than half an hour between stepping off a plane at Changi to stepping into my apartment.

[indemnity]

Whenever I fly to Europe (from New Zealand), I always go via Singapore, I just zip through, everything is convenient and clean.

Transiting through the American shitshow that requires clearing immigration again on the other hand…

[hn_acc1]

Where are you located? Lots of such crossings used to happen, anyway, many years ago via Nexus or similar. Get the pass, just drive right on through over the bridge at Windsor/Detroit. Also similar things in Vancouver, I believe.

[kevin_thibedeau]

I reentered the US from Windsor a few months ago and the Nexus line was backed up but could just sail through the regular line once they inched enough past the tunnel.

[hn_acc1]

Sure, all bets are off as of January 2025. In the past, it wasn't a big deal.

[jhbadger]

There's people who live in Tijuana, Mexico and work in San Diego, California and that's way worse than Canada/USA in terms of time and hassle. Not something I'd want to do, but then I wouldn't want to live in Connecticut and work in NYC, which many people do either.

[delta_p_delta_x]

> Must be a fully automated border or something?

Oddly enough, not until very very recently (~2024). Traffic jams of several hours are still quite normal for vehicular traffic, and it is the busiest crossing on the entire planet, with up to half a million crossings a day.

[wmanley]

US borders are awful. I guess you get away with it because the USA is so large that most people rarely leave, so rarely have to experience it.

[mikestorrent]

I'm north of the line... most of my troubles have been on the way back up except for one random search on the way down. On the way back they always give me the third degree for some reason, often searching, despite zero record and always declaring stuff. I must inspire contempt in the CBSA heart

[mr_toad]

I had an unplanned short stop in Singapore in December after missing a connecting flight. I just filled in an arrival form online (no Visa), went through the electronic gates, an officer glanced at me and let me through without a word. Whole process took about ten minutes, and it would have been quicker if I’d filed the paperwork beforehand.

[JamisonM]

There are actually a fair number of folks that commute from Canada to the US for work. They will generally have TN Visas, it is certainly not "unthinkable" - it really does happen, although I will confess that the only folks I have ever met that did it were not recommending it to anyone else!

[pezezin]

I don't know about the USA, but such an arrangement is extremely common in Europe thanks to the Schengen area.

[Muromec]

Schengen has no borders at all, but JB and Singapure do have one

[Muromec]

Borders in some places look more like a gate to enter metro, if you earned (or born with) trust bit

[jen20]

Plenty of people commute from Windsor (Ontario) to the Detroit Metro Area daily.

[ecshafer]

The CPF sounds pretty clever. It covers a major individual cost and need (retirement, medical, housing) instead of just throwing it into a tax. It makes the government money. This sounds like a win win kind of policy.

[everforward]

To me it sounds like a tax structured in a strange way so it doesn't obviously read as a tax.

It's essentially a forced loan to the government at subpar rates. The "tax" is the delta between what the government pays out for the bonds vs what a bond of equivalent risk in the free market would have paid.

The magnitude of the investment also probably makes it impractical for anyone but the very wealthy to retire before that starts paying out. Most other countries have lower rates on their retirement schemes, which makes it feasible for more people to live on their savings for a few years before the government retirement scheme kicks in. E.g. in the US it's pretty feasible for the upper middle/lower upper classes to retire a few years before Social Security kicks in, especially if they're willing to live frugally.

[NoLinkToMe]

That's partially true. 37% contribution of pay, earmarked for personal welfare expenses (housing/healthcare/retirement), basically covers 60% of a typical state budget.

But these funds aren't pooled like taxes. Typically the top 25% pay something like 80% of the income taxes. And the recipient of that tax revenue is typically the bottom 50% who get means-tested welfare benefits. In the Singaporean model it seems that the CPF funds of 37% are not pooled but allocated to personal accounts.

In other words it's a redistribution in-time (from early to late) and in-type (general income to housing/healthcare/retirement expenses), but to the same person.

Whereas a tax is typically a redistribution in the same time period, but to different persons, and can be earmarked to whatever.

I'd certainly prefer a 37% tax earmarked to me only (with modest ROI) + 10% income taxes + 0% cap gains, than the 40% tax I pay (west-europe) on my income which is wholly redistributed to others + 36% cap gains if I invest the remainder.

[Muromec]

That does not count the missing opportunity cost, which is the actual tax from the savings

[NoLinkToMe]

No because in other similar countries like the example I gave of mine, that money is taxed and goes to another person. There is no opportunity cost.

In Singapore it's 'taxed' and earmarked to you, and then generates a very modest ROI. Yes there is an opportunity cost versus a place like Dubai that has 0% tax. But not compared to a similar welfare state that puts a 40% tax and you lose that money forever.

[gruez]

>It's essentially a forced loan to the government at subpar rates. The "tax" is the delta between what the government pays out for the bonds vs what a bond of equivalent risk in the free market would have paid.

Yeah there's even a term for it: https://en.wikipedia.org/wiki/Financial_repression

[danans]

> The "tax" is the delta between what the government pays out for the bonds vs what a bond of equivalent risk in the free market would have paid.

It also robs the individual's freedom to gamble with their retirement funds while expecting/demanding a bailout when shit hits the fan.

In the USA we have thoughtful policies that allow people over a certain amount of wealth invested in key industries to do that.

[twoodfin]

The vast bulk of this “freedom” is exercised by public and union pension funds, not individuals.

e.g. https://apnews.com/article/biden-business-united-states-gove...

[raw_anon_1111]

It’s almost impossible for an upper middle class couple to retire in the US before their 65 unless they have some type of government provided or private company provided health insurance like teachers, police officers, military etc.

It’s about $25K a year for a decent plan which is doable. But you have to hope that Republicans - and yes this is a political issue - don’t successfully kill the ACA and make it impossible to get insurance at any cost if you have a pre-existing condition. If you are old - you will develop a pre-existing condition.

My parents are 83 and 81 and retired at 57/55. But my mom was a teacher who still gets benefits through the government and my dad gets benefits from the one factory that didn’t shut down in our hometown.

I’m 51 and even if I could retire early financially, I wouldn’t do it and stay in the US. Play the smallest fiddle for us. I “retired my wife” at 44 in 2020 8 years into our marriage when I did a slight transition to an industry where remote work with travel is the norm (cloud consulting + app dev) and we have traveled a lot including doing stints as “digital nomads”.

We are staying in one of the countries that we might retire to as a Plan B for six weeks starting next week.

Even now that we moved to state tax free Florida and my wife hasn’t had to work in six years, she keeps a current CDL because she can get a job as a school bus driver easily for the benefits and someone will pay me for independent consulting if I lose my job.

[glimshe]

The FIRE community and my own personal situation prove you very, very wrong. It's absolutely possible for a upper middle class family to retire in their 50s, even in their 40s, if they live frugally.

[aprdm]

"Live frugally" , "FIRE" , "work in tech"

All incompatible with 99% of the upper class, neither do they want to eat ramen to retire early.

You're also one medical disaster away from being "very very wrong"

[snake42]

FIRE doesn't depend on having a tech job. Its all about income to expense ratio. Planning for medical events is something that gets talked to death in these communities.

[solatic]

A lot of people are often surprised at how non-frugal their lifestyles are. I'm not suggesting that people living on $50k/year aren't already frugal, but yeah, there's definitely people who take out car loans, take out mortgages for the full amount they were approved for, and all sorts of random things like buying chicken parts instead of whole chickens, buying small grocery store containers instead of bulk pricing for shelf-stable items, keeping your speed down to save gas, etc.

You really just need to build an innate understanding that the hedonic treadmill doesn't make you happier long-term and develop a resolution to get your expenses down and stay disciplined about it.

[jandrewrogers]

I know several people with normie jobs (not tech related or government) and normie lifestyles that saved up enough money to never need to work again by 50 while still maintaining their lifestyle. Most still work because they have no idea what to do with their time even though they don’t need to work anymore.

You can easily derive that this is possible from the median household finance statistics published by BLS, never mind the upper class. It isn’t that hard if you care to do it.

[mech998877]

90%+ chance the person you are replying to has health insurance that will cover them in case of medical disaster.

[heathrow83829]

you don't need to eat ramen. there are many cost effective options out there: oatmeal, beans, rice, you could grow your own fruits and vegetables, etc.

and as for the medical disaster: heart attack and stroke are actually preventable with a plant based diet (keep your LDL under 80 and you'll vastly decrease your chance of a heart attack). i know a lot of people will hate on that, but those are the facts and any evidence based nutritionist can tell you this.

[raw_anon_1111]

And health insurance as soon as the ACA is gutted and you have a pre existing condition? Sure I could retire to Costa Rica or Panama. One of those are a plan B and we will be in CR for six weeks and we are both learning Spanish - I am. decent at it.

I bet you also your idea of upper middle class is not statistically valid.

https://dqydj.com/household-income-percentile-calculator/

[chasd00]

Costa Rica is on my retirement shortlist. I really like it there and have taken the family for vacation a couple times. I've driven the whole country pretty much North to South. Puerto Jimenez is one of my favorite places but it's very rural. There's some nice areas an hour or two North of San Jose as well. I've met a handful of US families that, when the pandemic hit, just sold everything they owned and moved to Costa Rica. As far as central america goes Costa Rica is a bright spot of stability and like a functioning government. I live in Dallas so pretty much have to know a little Spanish but there isn't much of a language barrier at all. You could do a lot worse than Costa Rica.

[glimshe]

I didn't get where I am by taking random bets, but I'll say you'd lose your money here.

[mathgladiator]

I retired on my 40th birthday, and it is AWESOME.

The thing is... no one has anything that I want to buy. I don't mean this in an elitist way, but more of a monk way. Like, I don't understand status and keeping up with people.

[snayan]

This is the way.

Like good meals, but I don't really understand the allure of owning a bunch of things.

The ego, when left to it's own devices, is a hell of a drug.

[bjourne]

Statistics! Can a person below the median income afford to retire early? The answer is a resounding no. Can a person the top 10th percentile (upper middle class) afford to retire early? Yes.

[raw_anon_1111]

https://dqydj.com/household-income-percentile-calculator/

So the top 10% is a household income of $250K and most of those couples didn’t reach that until their 40s. They aren’t making $225K as an L5 at 25 years old like a former intern/new grad I mentored when I was at BigTech

Most software developers won’t even see above $160K inflation adjusted during their career. Most work in second tier cities in the “enterprise”z.

[heathrow83829]

there are still tribes in the amazon that have very little money, like the hazda. they may not call it retirement but they don't need to go to the office everyday.

Serious question, what makes us so addicted and dependent to money that we can't imagine any way of life without a lot of it?

[carlosjobim]

Thanks for living frugally. Since you now have some spare money, I decided it's time for a rent increase. And a tax increase.

[everforward]

Without digging into this too far, I do think it’s possible but it does require starting early and sticking to the plan. I’m not one of those people, but I know people who are.

The mean household income for the 4th quintile is 115k a year. The mean of the middle quintile is 70k. There’s a theoretical 45k a year spread if you earn like the 4th quintile and spend like the 3rd (evidently possible since a lot of people live in the 3rd quintile).

Even ignoring compound interest, if you can hit that 4th quintile at 30 and you lose half the spread to taxes, by 55 you have 25 years of saving 22.5k/year for 562.5k in savings.

It’s probably not the most fun thing, but I do think it’s doable.

[raw_anon_1111]

Here are the numbers for context:

https://dqydj.com/household-income-percentiles/

The median household income doesn’t earn the median wage every year from when they started working. That’s just a snapshot and it’s highly correlated with age. I’m 51, I damn sure couldn’t afford to max out my 401K. That means I was 25 in 1999. I definitely could afford to max out my 401K - which was then $10K a year - when I was making $35K a year.

Especially when new grads are coming out now with student loan debt.

[kelvinjps10]

https://mrmoneymustache.com/blog/ Read this story and more in the fire community, it's not impossible

[raw_anon_1111]

Does that answer the question about what happens when the ACA is gutted and you can’t get insurance at any price with a pre-existing condition?

That happened to me right before the ACA went into affect. I was engaged to my now wife and we moved our marriage up early so I could get on her insurance.

[kelvinjps10]

https://mrmoneymustache.com/2020/11/09/direct-primary-care/

https://mrmoneymustache.com/2017/11/05/when-your-shitty-heal... Regarding ACA >My family’s monthly health insurance premium, which had already more than doubled in the last few years to $674 per month, was going up a further 44% for the coming year. For no good reason, other than perhaps the the current government’s attempts to kill off the Affordable Care Act. (By cutting various parts of the structure, the insurance market becomes less stable and predictable, and thus more expensive).

Also besides that there is also the solution of barista fire that's working part time just to get insurance. https://www.reddit.com/r/baristafire/

[apercu]

So Texas also doesn’t have income tax but my siblings house (assessed at a lower value than mine) is assessed property tax almost triple wha mine is, dwarfing my state income tax plus property tax. Not sure about Florida - YMMV.

[raw_anon_1111]

My property taxes are $3000 a year. They were around $7K a year before we moved. We also downsized to a two bedroom condo -1200 square feet - from a 3500 square foot house in the most expensive county in GA (Forsyth) after my step son graduated in 2020 and after Covid. We sold our house for twice what we had it built for 8 years earlier and bought our condo for the same price as we paid for our house in 2016.

Florida - especially when you live in the same county as DisneyWorld - is heavily subsidized by tourism

[FitchApps]

Is it possible to get insurance as an expat living in a foreign country, yet spend time in the states? Would that be a good coverage for retirees that want to split time between US and other countries?

[telotortium]

For curiosity's sake, what exactly do you think Republicans will do to "kill the ACA"? I doubt they're going to introduce a bill that revokes the ACA in its entirety. They killed the mandate almost a decade ago and the marketplace healthcare plans have continued to limp along, depending on the state. What's next?

[raw_anon_1111]

It’s simple. One of the original tenants of the ACA was to provide subsidies for most people earning up to what would be the upper middle class between this and the insurance mandates, it would prevent the death spiral where only the sick would sign up for it, making the cost go up until it was almost unaffordable to anyone and unprofitable for the insurance companies making them leave the exchange.

The first blow was when the Supreme Court killed the mandates. The second blow just happened when they killed the subsidies last year.

[twoodfin]

The expanded subsidies, which were a Covid-era enhancement some 10+ years after ACA was enacted.

[telotortium]

If you could have FIRE'd before the COVID era subsidies you can do it now

[kelvinjps10]

With health marketplace you can get insurance, or you can get a PPA service, or save money into a HSA, like there is multiple ways to do it.

[raw_anon_1111]

Until the Republican Party finally succeeds at gutting the ACA or make it so bad that insurers wing cover it.

Let’s say you maxed out your HSA for 20 years and have $200K - that can be wiped out with one uncovered major medical incident the HSA max is relatively low.

[throwway120385]

The other way to avoid a pre-existing condition is to just avoid medical care entirely.

[atomicnumber3]

Ah yes, the 4chan retirement plan. Die of a preventable cause at age 42 while waiting for your captcha.

[paulddraper]

If you accept that cancer is a death sentence, it’s not absurd to “self fund” your insurance with a nest egg.

You can shop around quite a bit for non urgent care, and get good cash discount.

[skrtskrt]

> The magnitude of the investment also probably makes it impractical for anyone but the very wealthy to retire before that starts paying out...

But they can pull out for housing right? That's an enormous portion of most people's expenses. If I didn't have to worry about housing, I could be living large on less than half of my salary, I would certainly semi-retire at least.

[everforward]

Sort of. So far as I can tell, you can withdraw to buy housing but I don’t think you can pay rent out of it.

The loans are also 75% max loan-to-value so I think until you can get 25% of the purchase price in your account you have to pay CPF and rent (or live with family).

Also, not an economist, but I suspect the forced savings has a wildly inflationary effect on housing prices. You can’t do much else with the money until you retire, so I would guess the price of housing rises up to match the forced savings rate.

[delta_p_delta_x]

> the forced savings has a wildly inflationary effect on housing prices

Housing prices are inflationary independent of CPF, because flats in Singapore are powerful investment vehicles. For HDB flats, however, there is means-testing and rebates to the amount of ~50%, sufficient for anyone on the 30th percentile and above to afford.

[refurb]

Since the government controls the supplies of HDBs, it controls the price inflation.

So it would be more accurate to say “housing prices are inflationary because the government wants them to be”.

Yet this introduces a ton of new problems as well. In order to keep them “good investments” it becomes ever increasing prices with ever increasing rebates to help lower income afford them.

But eventually prices will stop going up.

[accurrent]

Very few locals pay rent here. Most people buy houses. Its kindof forced thanks to the system, but its designed in a way that unless you are a decimillionaire housing is expensive, but attainable. This is done by splitting the housing market into private and public housing. Is this perfect? No.

And yes it does drive inflation of house prices.

[alistairSH]

That's not all that different than US Social Security. SS has a much lower required contribution/tax rate, but the overall scheme seems similar (lower than market returns, etc) and naming (despite SS actually being called a tax, many residents think of it as a required personal retirement savings account).

[everforward]

SS is different mostly in that you’re not really loaning money to the government. The money coming in today mostly goes right back out as payments.

There’s also an upper limit on SS taxable income. I forget what it is, but basically the entirety of the top quintile isn’t paying SS on their entire income. I want to say it’s like 90k, but it’s been a while since I looked.

[raw_anon_1111]

The top social security taxable income hasn’t been as low as $90K since around 2005. It’s currently $184500. 93% of income earners earn less than that

https://dqydj.com/income-percentile-calculator/

[eru]

> SS is different mostly in that you’re not really loaning money to the government. The money coming in today mostly goes right back out as payments.

That's only a difference in accounting, not in reality.

They could 'fully find' SS tomorrow, by just creating a bunch of T-bills for it.

> There’s also an upper limit on SS taxable income. I forget what it is, but basically the entirety of the top quintile isn’t paying SS on their entire income. I want to say it’s like 90k, but it’s been a while since I looked.

How's that different from CPF? See https://www.cpf.gov.sg/employer/infohub/news/cpf-related-ann...

[frankchn]

There is an upper limit on CPF contributions as well, currently set at S$8,000/month for ordinary wages and S$102,000/year total (ordinary wages + sales/performance bonuses, etc...).

In comparison, the US social security income limits this year is US$184,500/year.

[alistairSH]

SS is forced to invest unspent funds in T-bonds... That's sort of a loan to Uncle Sam.

And yeah, income over $185k isn't taxed by SS (silly law - fixing that would mostly fix the fund depletion that's likely to happen right about the time I retire).

[eru]

The rates aren't all that subpar, if you adjust for risk. You can take your CPF out and invest yourself (within limits), and most people do worse.

[itemize123]

Not true. Importantly, a majority of the cpf can be used for participating in stock market.

[cryptonector]

This is what all forced savings programs are. The name is a euphemism.

[ww520]

It’s not a win win policy. The citizens lose massive amount of their money to government on the bond yield delta. It preys on people not knowing the effect of long term compound interest.

Edit: in fact interest delta is how banks make their huge profits except the government here does it by force.

[initramfs2]

What's your source on the yield delta? In fact if you bought regular Singapore government t bills you will actually get a lower rate than the CPF rate. And neither do banks and saving plans give higher rates.

[cm2012]

The average person does not make meaningful interest or investment income, its not practical to on individual small salaries.

[Aurornis]

In this case the citizens are forced to save, but the interest they're given is less than what they would have earned by saving the same amount on their own.

Also, the average person in the United States does have meaningful investments toward retirement age.

[accurrent]

This assumes citizens actually putp a lions share of their money into more risky investmemt vehicles. For reference, this may not be the case with a large swathes of our older population. Bank rates, t bills and bonds here are generally lower than cpf. If you are a high income earner the contribution is capped and combined with low taxes this is not a bad thing.

[eru]

There's another clever bit:

In times of economic distress the government lowers the employer contribution part of CPF. That effectively gives everyone a wage cut to help employment, but without people complaining too much about it. The government is disciplined enough to raise the rate again later.

[Aurornis]

> instead of just throwing it into a tax. It makes the government money

It is a tax, but with extra steps.

The reason it makes the government money is because they’re collecting the extra interest that citizens would have earned if they were free to invest it on their own.

[initramfs2]

The CPF funds actually remain in your account, and the interest goes back to you. 1. The interest is guaranteed unlike a regular investment, and 2. I'm interested to know what to invest in to get better interest than CPF, because that's a very legit benchmark here, so please tell me if you find something that has guaranteed returns + higher interest.

[eru]

Alas, actually not: you can actually invest your CPF by yourself, and most people lose money compared to leaving it with the Gahmen.

[cryptonector]

No, it's a total loss for the citizen because even if they can use that money for "(retirement, medical, housing)" the interest paid is much too low.

Forced savings programs aren't actually "savings" for the people on whom the programs are forced!! "Forced savings" is a euphemism for "we're taking your money and calling it savings based on the idea that we're going to invest it well, though you won't see much of any gains, and there might not be any gains to speak of".

[paulddraper]

It’s analogous to the US, where you put money into social security and then withdraw later.

The only question is whether the fund is running at a surplus or not.

The US has raided its fund to finance other government programs, and then will have to pay it back via tax revenues.

[foxyv]

Why does the government get to decide when we retire?

[paxys]

You can retire whenever you want. The government decides when to start funding it.

As for why - the same reason why they get to decide what side of the road you drive on and what laws you follow. They rule the patch of land you were born on, and if you don't like it you can either participate in the system (assuming it's a democracy) or leave.

[cryptonector]

The real question is not why the government gets to set the retirement age. Of course it gets to set it IF it's involved in paying for people's retirements!

The real question is why governments insist on euphemistic names ("forced savings") that imply the opposite of the reality of the programs. And why people put up with such financial repression schemes. The answer to the first question is to keep people from being too upset too suddenly, too many all at once. The answer to the latter is that the people usually don't get a say in these things.

For Singapore this program probably makes a great deal of sense since Singapore is singularly vulnerable given its location in the world. To build what they did they probably needed these sorts of policies. I suspect most Singaporeans don't mind all that much, though I don't know. We would very much mind this sort of thing here in the U.S. though!

[foxyv]

This boils down to a "Might makes right" claim. It doesn't answer the question why. Only how.

[jonahx]

It definitely answers why. You are asking for an appeal to some moral justification. But there isn't one, and it doesn't matter. That's the whole point of "might makes right".

[mothballed]

CPF makes a moral justification by arguing it is a "savings and pension plan" under the auspices of a moral justification of helping citizens set aside their own money. The very first thing you are greeted with on their website is that it's savings and an overview represents it as "setting aside" your own funds.

The government makes a moral justification of a savings plan but then when we dig down to it it's all ether and really just a scheme for bond rate arbitrage for the government.

The point isn't that might makes right is false, it's that the moral justification is a facade.

[foxyv]

In an attempt to steelman, you are saying:

"There is no moral justification for the government setting a retirement age, but they are able to. So it doesn't matter."

[paxys]

What question do you want answered exactly? Why we have governments and not anarchy?

[foxyv]

Why does the government get to decide when we retire?

[itemize123]

so the country can be productive? so it can have resources to fulfil duties to citizens?

[coldtea]

It doesn't (you can retire early), but it does decide part of what you will need to be saving and how.

And the reason it decides that, apart from "because it can", is because many societies have seen what happens when it's left to individuals to take care of this, and they fuck it up in massive numbers, and the outcome of that then fucks up society.

[foxyv]

It is really easy to "Fuck it up" when greedy assholes jack up the price of necessities like food, shelter, and medical care. 66% of bankruptcies are due to medical costs. We should just socialize necessities like food, shelter, and medical care so there is no chance of "Fucking it up." That would cover the possibility of disability as well.

It sounds to me like we have built a system to exploit people as much as possible. Treating them like farm animals.

[lotsofpulp]

>We should just socialize necessities like food, shelter, and medical care so there is no chance of "Fucking it up."

How does socializing work if there are insufficient workers relative to non workers? I.e. the supply of food/shelter/medical care is insufficient to meet the demand?

[foxyv]

Why would there be insufficient workers relative to non-workers? Socializing health care, shelter, and food does not lead to a worker shortage. In fact, having a healthier and taken care of population leads to prosperity in general. In addition, it leads to reduced costs. Countries with socialized medicine pay a fraction of what America does for better health outcomes.

[raw_anon_1111]

Yes let’s have “5 Year Plans” with centralized control instead of the free market, what could possibly go wrong? If only we had a large country that tried that and failed miserably to see what could go wrong.

[krapp]

We don't have the free market. We've never had the free market. Every economy has always been under some degree of regulation and centralized control simply by virtue of existing within the context of a society and government that enforces laws and levies taxes.

[foxyv]

Or, hear me out, we could socialize health care and tax the rich rapists that are currently running the country to end poverty in the richest country in the world.

[ecshafer]

The government decides when we can retire and they help us out. You can stop working today if you want, Government shouldn't pay you for it for no reason. Your duty as a citizen is to work and build your nation, eventually the government pays back that service with benefits.

[foxyv]

This isn't something the government gives you. It is something they have confiscated and held on to.

> Your duty as a citizen is to work and build your nation

What about the duty of the trust fund babies and idle wealthy? What about the duty of the capital owners? Why is the retirement age going up instead of down as productivity increases?

[sam1714]

Not for the majority of retirement savings in the US, where Social Security makes up only about 25%.

In the case of 401(k)s/DC plans and private pensions/DB plans, the government allowed savings without "confiscation," i.e. immediate taxation. They gave us the benefit of deferred taxation if you wait until retirement age.

[foxyv]

What about the people who do not make enough to save and all their money goes to inflated living expenses? When do they get to retire?

[scottyah]

because lifespans are increasing much more, people are outliving what they used to and are using a lot more money in retirement than they used to. Old people used to sit in houses and watch grandkids, now they're flying to foreign countries for fun.

[goolz]

These days I wonder about that duty I have. It sure felt obligatory some time ago. I thought of myself as a patriot and that the rule of law was something we we should be proud of. A country whose own anthem spoke of "liberty and justice for all".

The current trajectory makes my question a lot of things, including this whole "government pays back that service with benefits" as it will be some time before I ever see a penny of SSI.

A lot of our taxes in this country seem like a giant waste or are grossly inefficient at best.

[throwway120385]

A lot of that here in the US is because we've lost the will to participate in the systems that establish these things. We leave that to other people, and those other people represent our interests poorly. The people in a democracy take a really long time to effect change. It can be a life's work for some people. But the premise is that if we can find common ground we can eventually see some of our ideas take shape. That does still work here, but we have to actually have real conversations with each other that respect each others' differences to get anywhere.

[scottyah]

After a bit it just comes down to motivation. Who wants to win more: 1. Someone who has everyone's best interests at heart so is unwilling to really run against anyone and is trying to balance out support for multiple conflicting groups all while learning the landscape and job or 2. Someone who knows they can use the position to get tens of millions of dollars, and are supported by a few large groups similarly motivated? This is how you get people like Va Lecia Adams Kellum and Karen Bass.

[autoexec]

> A lot of our taxes in this country seem like a giant waste or are grossly inefficient at best.

It's our duty to elect people who use tax dollars wisely and to vote out officials who neglect their responsibility to the people and use tax money to enrich themselves and anyone else willing to bribe them. Our government is filled with grifters because we've failed to hold them meaningfully accountable for robbing us and failing to provide the benefits we're funding.

Many of the grifters in government have been working hard to make it difficult to hold them accountable. They disenfranchise voters, they keep us afraid and our futures uncertain, they collude against efforts to reform the system they've established for their own benefit.

Government was never going to just let us have "liberty and justice for all" the job was always on "we the people" to insist on it. We can't just pay taxes and expect everything to work out. We have to use the democracy we have to force the government to work for us and not just for themselves. If we've reached a point where that's no longer possible then it's our duty to "refresh the tree of liberty" until we have a government that works for us.

[c22]

Psychologically the deterioration of we the people's power happens at an even more basic level when children are taught to resolve their conflicts by seeking out an adult.

[foxyv]

I wouldn't mind taxes if everyone paid their fair share and it went to improving the lives of everyone instead of the wealthy few. We live in the most productive times per capita that have ever existed. Why do we need to scrimp and save to buy food while the number of billionaires continues to climb?

[throwway120385]

Because we're failing to hold those billionaires accountable to the system that allows them to accumulate their wealth.

[carlosjobim]

There is no "we" and has never been. Anybody who talks to you about "we" or "us" or your "duty" is just seeking to exploit you, hoping that you're dumb enough to fall for it.

[foxyv]

There is in fact a we. It's just not based on race, religion, ethnicity, language, gender, or sexuality. "We" are the ones who create and work for a living instead of living off the backs of others. "They" are immensely wealthy oligarchs that exploit us using their ownership of land, buildings, communication networks and machines we need to survive.

[stackbutterflow]

This question cannot be asked in good faith on a user board. It requires an 800 pages book on politics, history, philosophy, economics to be properly answerered and it would barely scratch the surface.

You might as well ask similar questions about most basic laws and concepts behind how western societies work.

[foxyv]

Yes, you should be asking similar questions about most basic laws and concepts behind how western society works.

[stackbutterflow]

We should each ask ourselves such questions and review our view on them from time to time during our life because they're important, but mostly by doing our own research and self study. But asking point-blank strangers such a vague question is putting an unfair burden on them.

There's maybe a few hundred people worldwide who could casually drop a proper answer to your question while casually browsing hn.

I believe it'd be more fair to start answering your own question to show how far you are in your intellectual journey on that topic.

[foxyv]

My own answer is this. We have created a system of exploitation where we extract value from people's labor and transfer it to an oligarchicy that is slowly increasing in power. Governments are captured by that ruling class and are unwilling to do anything that threatens them. In addition, they are slowly reducing the rights and social mobility of the middle and lower class in order to expand the power and capital of the oligarchy.

Any money that is possessed by the working classes is then taxed in the form of increased living expenses or directly by the government until they can barely afford the necessities that allow them to continue working. Once they are no longer able to do so, they are discarded and allowed to die of preventable illness, starvation, drug use or exposure.

[jcranmer]

The government doesn't decide when you retire. The government decides when it is willing to pay you to be retired.

[foxyv]

Social security is an entitlement. They have taken money from your paycheck to fund it. In fact, they have taken more from your paycheck than they will pay back to you in order to pay for an aging population. The extra goes to bonds which the government then uses to reduce inflation when they decide to invade random countries or bail out a bank.

Now, why does the government get to decide when I retire with my own money?

[jcranmer]

If you don't like it, join the Amish and file a Form 4029.

[foxyv]

https://en.wikipedia.org/wiki/Ergo_decedo

[tptacek]

Well one obvious reason is that you're not retiring with your own money; your contributions fund current retirees.

[zozbot234]

> It covers a major individual cost and need (retirement, medical, housing) instead of just throwing it into a tax.

Forced saving makes it a tax. It's essentially no different than payroll taxes in the U.S. that fund Social Security. Buying government bonds is still marginally better accounting than a complete Ponzi scam like Social Security in the U.S., but even that ultimately amounts to the same thing - the government is paying itself, so it's a wash.

[philwelch]

The social security trust fund does buy government bonds.

[f33d5173]

Social security is not a savings account and is currently underfunded.

[drivebyhooting]

Except for the part where citizens get low returns and are forced to work their whole lives accruing minimal benefit.

How is being a serf win win?

[delta_p_delta_x]

Singapore is one of the last countries one will be a 'serf' in.

The parent contributor has conveniently left out the fact that the 37% of CPF contributions is split 20-17 in terms of employee-employer contributions[1], and has a ceiling of S$8000[2], so if one earns more than that, every additional dollar goes entirely to them, which is also taxed at globally low income tax rates[3]. One can put all one's post-tax money into any stocks/bonds/funds, and there is also no capital gains tax[4].

[1]: https://www.cpf.gov.sg/employer/employer-obligations/how-muc...

[2]: https://www.cpf.gov.sg/employer/infohub/news/cpf-related-ann...

[3]: https://www.iras.gov.sg/taxes/individual-income-tax/basics-o...

[4]: https://www.iras.gov.sg/taxes/individual-income-tax/basics-o...

[gruez]

>The parent contributor has conveniently left out the fact that the 37% of CPF contributions is split 20-17 in terms of employee-employer contributions[1]

This point is a shell game, because the employer's share is still effectively being taken from the employee. It's equivalent of "tariffs are paid by foreigners!" that's trotted out for supporting tariffs.

[kaashif]

I almost feel like the employee/employer distinction is actually worse than tariff fakery because at least tariffs are somewhat confusing to the average person, so you almost see why they get fooled.

But I feel like no-one would be fooled if you changed an e to an r on payslips (employee contribution to employer) - it's just obviously the same.

[dmoy]

$8000 is considerably above median income, no?

[InkCanon]

Yes. Bluntly put, the government maximizes residence of high net worth individuals, and a 37% forced purchase of low interest bonds would be outrageous to them.

[eru]

Also Singapore is reasonably good about applying paternalism mostly to the poor.

(I say, mostly, because they still don't allow rich people to take arbitrary drugs. Unless you count getting a doctor to give you a prescription.)

[spyckie2]

You mean the US, right? Especially with the part 2?

I know this may sound like a shock because you are privileged but 7% yoy return on capital is NOT the norm for the rest of the world. Just look at any other index not called the S&P or the Dow. Look up US exceptionalism.

The US policy for retirement savings shackles the younger generation with a ticking time bomb. Forcing your own citizens to save money for themselves is a lot better than forcing your own citizens to pay for others. Which one is more morally cruel?

HK has a similar forced savings, but that ROI is like 1 or 2% and the options to invest are paltry.

Some perspective is necessary. Yes it’s not great but compared to the rest of the world it’s stellar.

[eru]

> I know this may sound like a shock because you are privileged but 7% yoy return on capital is NOT the norm for the rest of the world. Just look at any other index not called the S&P or the Dow. Look up US exceptionalism.

I have sympathy for your general position, but this particular one is a bit silly: I live outside the US (in Singapore, in fact), and I can invest in US equity just fine.

[drivebyhooting]

If ROI is lower than inflation then what’s the point of saving? So you can have an even worse standard of living after you retire?

Forced investment in low ROI vehicles is just a tax by another name.

[spyckie2]

Well, would you have a better standard of living with $0 or $1000 when you retire?

Even if that $1000 used to be worth $10000, that $0 is still worth $0.

[3rodents]

I can’t speak for Singaporeans and every government has their detractors but the Singaporeans I’ve known loved their system and hated the western systems they were exposed to. They would laugh if you tried to describe their life as serfdom when compared to a life in the U.S. or Europe.

[InkCanon]

I'll be blunt and say most Singaporeans have a very poor idea of how these policies work. Another major one - virtually all Singaporeans believe they own their houses, and it is a point of pride and financial security. Most houses are on 99 year leases, but the idea that is deeply lodged is that this is longer than you can live so this is inconsequential. While this is true if they only cared about living in it, houses have huge financial/investment value to Singaporeans. Despite the iron mathematical law that these houses must depreciate their lease value, most Singaporeans believe house prices will continue to rise based on historical trends. The math just doesn't work out.

[zozbot234]

99 year leases make complete sense. Much of the value of a 'house' in an urban area like Singapore is actually in the land, and the value is being created by the community on a day-to-day basis. It makes no sense for that value to be captured for all future time by a single owner, that just encourages pointless speculation and makes it harder to allocate real estate towards its highest and most valuable use.

[gruez]

> It makes no sense for that value to be captured for all future time by a single owner, that just encourages pointless speculation and makes it harder to allocate real estate towards its highest and most valuable use.

How do 99 year leases fix the problem? Do people actually get kicked out at 99 years, or does the government renew it for a nominal fee?

[autoexec]

> virtually all Singaporeans believe they own their houses, and it is a point of pride and financial security. Most houses are on 99 year leases

It's not as if the US fairs any better. Here you never own your home, you have to pay property taxes your whole life (basically rent) or it will be taken from you. Eminent domain means that they can take your property from you at any time even if you've kept paying them.

Singapore has a home ownership rate of ~90% vs 65% in the US and prices are so unaffordable that on average people buying their first starter homes in the US are in their 40s! Most Americans, if they're lucky will get maybe get 30 years of their life in a home they own while they are still young and healthy enough to enjoy it.

Last I heard Singapore only had about 1,000 homeless. Whatever they're doing with housing could probably be improved on, but they seem to be doing a lot better than we are.

[InkCanon]

Property taxes also apply in Singapore and I believe in practice eminent domain is rarely exercised. But the home ownership rate is the thing I feel the most I should correct. It is very heavily pushed that Singaporeans own their homes. But legally they are renters. By a proper definition, probably something like 90% of Singaporeans are renters, not home owners.

[delta_p_delta_x]

I think Singaporeans have a decent idea, and given their quality of lives, they have no problems with the trade-offs. If they do, they leave. And many go back, because the trade-offs in the West are even worse.

> Despite the iron mathematical law that these houses must depreciate their lease value

SERS means that houses slated to be torn down are resold back to the government at near-market rates excluding the effect of the 99-year leasehold.

In Singapore, the government owns everything, even ostensibly 'freehold' land. If they want to run an MRT line under your house, and they need to tear your house down to get to it, they will force you to sell your house and your land to them. Has happened before, will absolutely happen again. It's an island city-state smaller than London. There is literally no space anywhere else.

[zozbot234]

> If they want to run an MRT line under your house, and they need to tear your house down to get to it, they will force you to sell your house and your land to them.

Eminent domain exists in the U.S. and other developed countries too. The point of it is largely to prevent any single owner from "holding up" a non-trivial project like an MRT line.

[InkCanon]

I think whether houses should be sold on a 99 year lease vs property is a large and separate question. The vast misunderstanding of it still remains - the idea that a house is owned, not rented. Selective properties might be bought back. But the fundamental invariant of this whole situation is that all 99 year leases will worth 0 eventually. Any rise in prices now only increases the eventual depreciation. And add on that massive loans are taken out on depreciating assets, so it's not an investment, it's a liability. And the significant majority of Singaporeans bears this liability on their books.

[butterbomb]

People don’t believe me when I tell them that there’s a large portion of even the American population that will happily accept the simplicity and safety of serfdom.

[nosianu]

Unless we scale back our lives significantly, and are fine with a lot less stuff and vacations and devices and modernized living (houses and transit today are vastly more complex systems than a few decades ago), there simply is no way to let a large number of people live like rich people.

I grew up in East Germany, and while it was a total failure, they got at least one idea correct in the workers paradise: We need to work. (Never mind the implementation, I already said it was a total failure, okay? It's about problem recognition, not about the quality of the solution.)

And you know what? I'm actually like my grandfather, who without any need whatsoever continued to work well past retirement, privately, painting a house here, doing some paint shop there, designing and installing a sun dial somewhere. He only got off the scaffolding on a house's paint job a week before he died.

I too would hate to just laze around. I LOVE doing useful stuff. I worked and made money many times as a child already, and it was always fun!

What stopped the fun was the coming of The West (which I too went to the streets for and wanted, still, "side effects may apply"). While I studied CS I took a job in a chocolate factory, not because I needed the money, but because that's what I always did and was used to. Being in the production of stuff is actually FUN! Except then came some western management idiot to make it clear fun is over. I had just setup a machine to work as efficiently and as well as possible (because that's fun!), so now I had to wait a few minutes for it to finish. Just a few minutes, no time to start something else. So I briefly sat next to it and waited for it to finish. In comes the management idiot, immediately jumping on me, why am I lazing around??? That's not what they pay me for!

Just an anecdote, and of course it is much better in knowledge jobs, but that, and the fact that the money accumulates towards the top is what I think is a HUGE problem in today's capitalism. No wonder they have to make live as miserable as possible for the working majority, because there is no fun. The managers and owners think we don't want to work, and treat us accordingly. But it is THEM who are responsible for much of that.

[eru]

Coincidentally, I was born in East Germany and now live in Singapore.

Even in unified Germany you can have fun. I think actually a lot more. You can run your own independent cooperatives etc.

[drivebyhooting]

Working as a painter for lack of imagination of what else to do is not fun. It reminds me of being “institutionalized” from Shawshank’s redemption.

[bubblewand]

Adult coloring books are a thing. I could definitely see a person enjoying a version of that, that also had a purpose beyond killing time.

[temp8830]

You get lots of vacations? And fancy transit systems? Where do you live and work?

[Terr_]

> Singapore's economic policies are complicated and often misdirecting. [...] it's sovereign wealth

Tangentially, I've had a similar gripe around how some US folks discuss Singapore's similar old-rival Hong Kong. They'll advocate "Hong Kong shows policy X works, we should do X here too", while ignoring the other half of the system required to make it work, policies the same advocates would never want to adopt.

In particular, celebrating HK's "tax freedom" while glossing over how the government does fund expenditures. It's the ultimate landlord, deliberately constraining supply (with high subsidies to the poor to prevent revolt), and draws from its huge [0] sovereign-wealth fund.

[0] Huge by any US standards, even if far smaller than Singapore or Norway. To put the per-capita amounts in context, if the US is 1x, then HK=80x, Singapore=356x, Norway=379x.

[philwelch]

> The primary purpose of CPF is not a pension scheme. It is structured as a massive forced bond purchase scheme by citizens. Financially what happens is the 37% of citizen income buys a long term bond (till retirement age, on average decades) at rock bottom interest rates (it's pegged to the overnight rate or a minimum of 2.6%).

Social Security is effectively the same thing. Payroll taxes are collected and placed in the social security trust fund, which invests them in federal bonds.

[InkCanon]

The main difference is SS bonds are bought at market rates. CPF bonds are not.

[zozbot234]

Payroll taxes actually pay for current Social Security benefits, the trust fund was tacked on with separate government funding in order to make it a bit less of a complete Ponzi scheme.

[drdec]

The trust fund is funded by the overage of collected Social Security taxes compared to Social Security payouts. It is not "tacked on" and does not use "separate government funding".

Currently there are more payouts than taxes so the trust fund is being used to make up the difference.

When the trust fund is depleted (barring any changes, this happens at some point in the next decade if I'm not mistaken) then there will be a reckoning. If no action is taken by Congress the result is that payouts will be cut by the necessary percentage to match the taxes.

[zozbot234]

> does not use "separate government funding".

Yes, it does. The Obama administration explicitly appropriated general government funds to try and make up a developing shortfall in the 'fund'. There is no money being accumulated because there are more payouts than taxes - but even if that wasn't the case, these are not actual "bonds" that have been bought on any market, they're just non-market government obligations.

[nicholasluimy]

A lot of follow up comments are representing this as a forced bond purchase with subpar returns, without also considering that, it essentially forces folks who wouldn't otherwise save for retirement to do so (albeit at the government's definition of retirement age)

For those who know how to manage their money, this is absolutely a hit on potential returns. But for many who may not, this is net more than what they would have otherwise

[janpeuker]

I think it's also relevant that CPF is not only a pension schema but most importantly also a home ownership scheme via HDB OA https://www.cpf.gov.sg/member/home-ownership/using-your-cpf-...

[salesynerd]

The "gotcha" here is that the home is, legally and technically, on a 99-year lease from the government. So, the government is free to take it back once the lease expires. This happened a couple of years back with an old enclave - the "owners" had to vacate their units as their lease had expired and the government needed the land for developmental purposes.

In fact, this had become a hot button issue in the elections. All this while, and even today the government claims that the people are the owner considering they can sell the units and book profits. On the other hand, they justify the 99-year limit, as a step to being fair towards future generations in a land scarce country.

There have been many policy and public discussions around this topic. But, as of date, there is no firm or permanent solution to this conundrum.

[itemize123]

this is almost entirely orthogonal. you can use cpf for private, non-99year lease housing too.

[salesynerd]

Thanks for correcting me; I accept that CPF can be used for both the cases you have mentioned.

My comment came from two observations: 1. The majority of Singapore citizens live in HDB. 2. The vast majority of non-landed residential properties (private condos and HDBs) are on 99-year leases.

[eru]

You also get health insurance.

[NooneAtAll3]

> After all this there's the astronomical cost of living. This is also intentional, to raise the number of employees.

how does that work?

[DaedalusII]

> It is structured as a massive forced bond purchase scheme by citizens

the UK effectively does the same thing with DB schemes forced to buy Gilts

[throwaway5465]

DB schemes forced not to take long payment holidays when markets go up.

Offering a DB scheme however is an employer's choice, a choice most choose not to make today.

[eru]

> The main goal of the government is to maximize the absolute number of people working.

Why? What? You know, they have to win elections?

They recently tightened migrant worker visas quite a lot.

[exidy]

The non-resident population of Singapore (which is a reasonable proxy for migrant worker population) is at the highest it's ever been, as is the total population.[0][1]

[0] https://www.singstat.gov.sg/publications/reference/singapore...

[1] https://www.mom.gov.sg/foreign-workforce-numbers

[JamisonM]

The Singaporean government is responsive to public opinion to some degree, but it is so they can maintain their current status of not having to worry about winning elections.