By Chuin Ting Weber, CFP, CFA, CAIA
CEO & Chief Investment Officer, MoneyOwl
The Prime Minister’s comments on the now on-hold Lifetime Retirement Investment Scheme (LRIS) in this interview, reported in The Business Times in English, are also relevant to any investment of CPF under the existing CPF-Investment Scheme.
Said PM Wong, “The challenge is, can such a fund produce returns that are better than the very generous, risk-free, guaranteed returns that the government already provides?”
“And will it still have some volatility, which will expose CPF members to financial market risk, especially when they retire?”
Indeed, much as I believe in investing, it makes me uncomfortable when CPF retirement monies and double-digit, all-stock investment returns of S&P500 are spoken of together in the same breath.
Investing for and in retirement is nuanced.
More so in Singapore, perhaps, as our CPF system is one of a kind in many ways, for better or worse (mainly better).
Therefore, please don’t just follow calls to chase higher returns, or even higher risk-adjusted returns, than 2.5% p.a. or 4% p.a.
There are trade-offs.
May I suggest fellow Singaporeans to be discerning about the commercial vested interest behind these calls, and look beyond throwaway truisms and understand the “whole truth”.
Take not just an investment lens, but broader financial planning, and even actuarial and policy lenses.
You can consider joining MoneyOwl’s webinar on Thu 13 Feb 2025 evening. Link here.
Reference to The Business Times article here.
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