Tag: T_sgCitizen

SG government offer=theBest #Aaron

Posted on by tiger40490

“Whenever there are competing products to the Singapore government’s offer, the government one is always the best and the most competitive”.

, my DBS financial adviros Aaron commented. Our conversation was about protective financial “schemes” most Singaporeans would need. We didn’t go through each item:

  • [c] long-term savings — CPF pays the highest interest on the market
  • [c] annuity
  • [c] medishield and eldershield
  • [c] universities — high quality, highest quality/cost ratio
  • [c] mortgage — HDB mortgage is often the most forgiving
  • [c] HDB fire insurance?
  • [c=citizens get the most benefit, followed by SPRs]
  • — some exceptions:
  • ??

Q: can we say the same about U.S.?

2points@livelihood ] President’s address

Posted on by tiger40490

I think these and other points raised in the President’s address to new parliament are points to be explored in the upcoming parliament debates.

I feel the President’s address to a new parliament (once in a few years) usually sets out broad directions of focus over the next few months or years. Some of the policies would be adjusted within 12M, but the broad directions don’t change.

  1. jobs-for-citizens remain the top priority for the parliament. Three vulnerable groups: 1. low-income and 2. mature (struggling with age) workers, and 3. mid-career (i.e.被迫转行) workers with heavier financial commitments and families to support.
  2. find new ways to make a living, create jobs in new sectors.

She pointed out the current top threats: national protectionism; geopolitical rivalry; more volatility; disruption. Therefore, more Singaporeans may need more social safety net. She said Government will support young families to own their own homes, offer middle-aged Singaporeans more help to secure good jobs, and give them greater assurance that they will have enough resources to retire on. <– elements of the safety net and the nanny state

 

## some advantages of SG citizenship over SPR

Posted on by tiger40490

This is written for some friends asking me

Q: as a Singapore PR, why should I bother to apply for citizenship?

  • Primary school registration favors citizens
  • university subsidies .. for citizen students. Admission criteria? Not sure
  • scholarships .. usually target citizens
  • bursaries … mostly target low-income citizens
  • LTVP .. sponsorship of your family members if you are citizen.
  • free or subsidized job training .. for mature job seekers
  • some job positions favor citizens
  • GST voucher?
  • one-off relief during economic crisis
  • hdb home upgrade .. citizens pay (almost) nothing
  • [r] reduced fare on public transport
  • [r] recurring rebates .. monthly utility, town council fees..
  • [r] medisheild subsidy .. is more generous for citizens
  • [r] government hospital subsidies
  • [r] polyclinic subsidies
  • [r=impacts retirement planning for wife and me]

— school fee subsidy.. including preschools

  • Primary school: PR pays about $200/M vs $0 for citizens
  • Secondary school: PR pays $400+/M, vs $25 for citizens
  • JC: PR pays $460/M vs $72 for citizens

for me, CpfLife beats SSA

Posted on by tiger40490

Look at the citizen’s confidence level in cpfLife vs SSA

One specific reason I won’t give up Singapore citizenship is CPF, something comparable to Social Security. At age 55 I will have put aside a nest egg (perhaps 200-400k) and use it to buy an annuity plan backed by the Singapore government. It will pay out as long as I live.

In contrast, SSA doesn’t give me the confidence that they would be able to keep up with payment. With CPF, my money is never spent on someone else but SSA uses part of my money to pay low-income, disabled and other families who take more payout than they contribute. That’s the basic principle of welfare state.

— depletion of SSA reserve .. Even worse, every calendar year, the SSA pays out more than it receives. in contrast, my CPF money is always mine so it won’t pay out more than I contribute, until we consider “pooled interests”. Known as CPFLife, it is exactly like a regular annuity plan from any insurer, so the risk of “running out of money” is widely known to be small, otherwise the insurer would increase the premium and reduce the payout for new customers.

Social Security’s retirement benefits trust fund is projected to deplete reserves in 2033, leaving it reliant on current-year tax receipts covering 79% of scheduled benefits.

— other features of SSA
The Social Security tax applied to both employees and employers is 6.2% of an employee’s paycheck — or 12.4% in total. (Self-employed individuals pay the entire 12.4% themselves.)

When you contribute to Social Security, the money doesn’t go to a specific fund allocated to you: Workers are paying into a system that pays for _current_ retirees’ (not your) benefits. For every dollar you pay in, 85 cents goes towards the Social Security trust fund.

The other 15 cents goes to a separate fund that pays benefits to people with disabilities and their families. In Singapore, separate systems exists such as risk-pooling CareShield.

Unlike CPF, Payroll tax contributions are not reserved for future payouts to the particular taxpayer. In other words, the payroll taxes you contribute to the Social Security system aren’t set aside to pay your benefits when you become eligible. They fund payouts for current beneficiaries or are saved into the reserves i.e. the trust fund.

Tax .. social security is a “tax on the rich” while cpf is a compulsory savings scheme.

— health benefits
As to hospitalization insurance, IMHO the CPF-backed medisave/medishield is generally superior to the medicaid/medicare system. My main argument is again about pooling. The CPF medisave account is completely segregated by account. The shield plans are like hospitalization insurance from private insurers, but subsidized heavily by government. There’s no concern that poor families would “take” the money I contributed to a pool. In the medicare system, the rich and healthy tax payers contribute more to the pool than they withdraw, while the poor and sick members contribute less than they withdraw, according to my friend Sudhir (Mummaneni). Sudhir said even more significantly, some percentage of the population is so sick that they use up a high portion of the medicare pool.

See https://www.theatlantic.com/business/archive/2012/01/5-of-americans-made-up-50-of-us-health-care-spending/251402/ and google “chronically ill medicare”. According to U.S. Department of Health and Human Services

  • In 2008 and 2009, 5% of Americans were responsible for nearly half of the country’s medical spending.
  • In 2009, the top 1% of patients accounted for 21.8% of expenditures.
  • the healthiest 50% of population used only 3% of total cost

Q: Is this disportionate distribution normal pattern across all insurance companies? Note U.S. system is based primarily on private insurance. I guess similar stats exist in private[1] hospitalization insurance schemes thanks to the defining feature of the insurance model.

[1] cpf medishield is similar, but public.

## SG citizenship: $value imt GC

Posted on by tiger40490

I feel lucky to have Singapore citizenship. Now I feel SG citizenship is better than U.S. green card because

  1. — ranked by … strategic value to my family
  2. nanny-state public (+ private) service ..
    • Grade A vs C. It’s possible to put a dollar value on this ‘grade’
    • client service — good, efficient CRM (uncommon in many countries) when I’m in need of help
  3. medical cost relief — Medishield, polyclinics…
    • long-term nursing cost (esp. out-patient) is probably lower based on my personal observation.
    • Without insurance, hospitalization is probably much cheaper in Singapore than U.S.
  4. housing — relatively affordable public housing for citizens
  5. overall lower minimum burn rate, easier to achieve carefree if not absolute ffree
  6. for me, Singapore CPF beats U.S. social security
  7. weather — warm for retirees
  8. low crime rate — important to wife
  9. NRY — thanks to the open and robust economy, foreign professionals represent a stable rental demand.
  10. transport — Reliable and cheap public transport for non-drivers, though gas is costly
  11. college — Singapore universities for my kids
  12. Property tax — much lower than U.S.
  13. inflation control — better control than in many countries
  14. SG government has a large past reserve to protect Singapore against many threats.
  15. if stranded overseas — I can count on SG government to bring me home. U.S. citizens probably have lower confidence.

Q: If SG citizenship offers so many tantalizing carefree features, then why are they unattractive to so many shrewd Chinese professionals?

  • A: even if we agree that SG citizenship contributes to a bare-bones ffree far out in the future, the ffree is too bare-bones, too far out, and contribution are too small and unattractive to most people
  • A: these capable, qualified, elite professionals tend to be well-established in their country. In such a case, the sacrifice is too high, and risk is too high.
  • A: At our age, to abandon the current home country (US or ..) and try out a small SEA country is highly questionable, risky and a long shot. There’s too much at stake.
  • A: there’s a age window for choosing and changing home country. After that window closes, it’s increasingly costly to do that now.
  • A: SG citizenship is hard to get
  • A: SG is seen as too small too vulnerable to be strong, robust and powerful

SG rainy day reserve^other nations’

Posted on by tiger40490

Who owns the $700b (or whatever)? Who benefit from it? I would say Citizens benefit more than non-citizens.

https://www.todayonline.com/singapore/explainer-how-much-surplus-govt-has-accrued-under-current-term-and-what-happens-it describes how each term of the PAP government (each administration) contributes or draws upon the past reserves.

— https://www.straitstimes.com/politics/size-of-reserves-cannot-be-disclosed-as-a-matter-of-national-security-says-heng-swee-keat says the past reserve is at least S$700b, invested by three sovereign funds.

HKMA official website declares about USD 540b of reserves.

— based on https://www.channelnewsasia.com/news/singapore/if-situation-deteriorates-significantly-due-to-covid-19-dpm-heng-12480226

He said for the financial year 2019, the Net Investment Returns Contribution (NIRC) was the largest single contributor to the Budget, representing 3.3 per cent of gross domestic product (GDP).

This is a “highly unusual and very fortunate position”, said Mr Heng, who noted that this was not the case in most advanced countries that pay about 2 per cent of their GDP in debt-servicing of accumulated debt.

On the other hand in Singapore, the reserves have generated substantial returns, which help to keep taxes low. “Today, the NIRC at S$17 billion is more than personal income tax collections at S$12 billion, and GST collections at S$11 billion. If we did not have the NIRC, even doubling personal income tax, or doubling the GST rate to 14 per cent, would still not be enough,” said Mr Heng.

“Tell me in which other country are citizens able to reap the benefits of past savings in this way?” he added.

“So let us never forget that what we have inherited is very unusual and very precious. Let us be responsible and steward these properly for our future generations.”

The reserves have also given Singapore, a small country with no natural resources, the confidence to deal with the ups and downs in the world, said Mr Heng. In 2009, then-President Nathan approved a draw of S$4.9 billion from the past reserves to fund the Resilience Package. A year later after the economy rebounded sharply, the Government decided to return the money used to the past reserves. “It did not have to, but did so, to maintain the discipline that has allowed this unusual move in the first place,” said Mr Heng.

[18]Y I feel ffree !!US cohort despite higher pay #Deepak

Posted on by tiger40490

See also big discretionary spends

Background, by definition, my “peers” all have kids, and working in (financial) IT, often with 2 incomes.

Q: why am I feeling financially free but not the U.S. peers despite their higher income
A: My advantages are 1) burn rate 2) nonwork income
A: For their USD 90k burn rate supported by employee health benefit, at 4% reliable return, they need 2.25M invested.
A: For my SGD 36k burn rate supported by medishield, at 6% rental yield, I only need SGD 600k invested

  • passive income — i.e. the incoming side —
    • my projected real-estate passive incomes add up to S$4k+. Do some of my peers have a similar income? Not sure
    • I think too few of my peers have seriously focused on reliable, consistent passive income
  • burn rate — i.e the outgoing side  —
    1. My burn rate is 20-30% lower than my peers in the same location. For example, during the initial stabilization period after my family comes, my burn rate is possibly 7k, including rent + med bx + car
    2. my actual SGP burn rate of S$4-6k is less than their USD9k, largely due to location difference and childcare. Rural China, Malaysia, India .. would be even lower. I think Rural America is somewhat lower but not sure how much. I can ask some U.S. colleagues
    3. In terms of “minimum” burn rate, I think their average in the U.S. is 2 to 4 times higher than mine in Singapore, largely due to medical, transport and rental cost.
    4. SG citizenship — offers cost advantages in terms of medical, college ..
    5. In the job loss scenario, my confidence about reducing burn rate is not echoed by U.S. peers. Can some of them cut from USD9k to USD5k? I assume yes but none of them shows confidence.
    6. I don’t aim to buy a 700k home or send my kids to private colleges. Free of these burdens.
    7. My minimalist lifestyle is rare among my peers. This lifestyle is not theoretical, but visible in action
    8. my confidence about my household burn rate is rare among my peers

— After the analysis, now a more casual look at peer’s burn rate:

I discussed with grandpa about a huge difference between me and my colleagues’ burn rates.
This difference is rooted in their long-term optimism about their earning growth and stock market returns.

(In contrast, my self-confidence about my salary sustainability is based on IV.)

One thing easy and really useful to do with money matters is break-down analysis.
I can see my younger (and some in 40’s) colleagues spending more than I do on food, rent, mortgage, car, vacations, entertainment, gadgets, kids’ enrichment ..
These are often big-ticket items or creature-comfort spending, and clearly luxury IMO

Many believe food is never a big ticket item, but I think they spend $40/D i.e. $15k/Y vs my 4k/Y.

Q: sometimes I feel I can’t (allow myself to) cut further down below my peers because my family could then feel deprived, but can I?
A: I think I some capacity to ignore the peer pressure and maintain my superior brbr.

— In Sep 2020, I discussed “livelihood pressure” with DeepakCM. I described a fictitious family earning 250k [1] combined. Deepak said after-tax 150k/Y or 12.5k/M.

If they spend 10k/M then Brbr is stressful not comfortable. I feel comfortable brbr is 2.0+ but I guess the typical family is unlikely to save half the income.

Deepak pointed out that immigrants leave their home countries behind, and come to U.S. in search for a better life, so these high-income families would spend to enjoy. Lifestyle creep — a stark contrast to my financial discipline.

Q: If these immigrants are able to “accept/cope with” a simpler life but choose to enjoy a better, more /comfortable/ (actually lavish) life, then why do they complain about livelihood pressure like depicted in 中年男士40-50压力最高@@?
A: It depends on the acceptance — like my carefree acceptance vs reluctant, grudging acceptance. I think exclub and FOMO are fundamental /drivers/ in these high-earning immigrants. They are driven to spend, and driven to endure livelihood pressure. Some are unable to say NoThanks, as I described to my sis.

Q: Are they on cashflow high ground, with their high income?
A: No necessarily.

Q[1]: 250k … what if combined income is 300k? I think by most wealth-management standards that income would put the family in a different league . Indeed, some of my U.S. (I didn’t write “SG”) friends, my ex-classmates, and possibly my sister are in the “wealthy” exclub and not comparable to the rest of us. Their livelihood pressure, their Brbr, their assets are not comparable to mine.

polyclinic xp: retiree healthcare

Posted on by tiger40490

In early 2019, I spent quite a bit of time on my multiple polyclinic trips and there’s an unexpected ROTI.

For whatever reasons, the patients at TPY polyclinic are mostly elderly. Semi-consciously I started to see myself in them, and recognized, at a physical and emotional level, the SG advantage over U.S. system, where ordinary (mid-curve) old folks get significantly less help than the wealthy old folks able to afford private health care. U.S. health care welfare targets the low-income tail of the bell curve. As the U.S. debates how to make health care more affordable, Singapore is quietly adapting and modernizing an already proven formula of efficient yet affordable health care for ordinary old folks, not only the needy.

The Singapore system is largely based on polyclinics and subsidies at public hospitals + private clinics.

Efficient yet affordable — fast, modern, well-staffed. system is less complicated, more understood.

Many would cast doubt on the waiting time and commute.

  • waiting in clinic — usually 10 – 60 min.
  • waiting list — However, Zeng Sheng cautioned me that older patients might hit a scarce resource constraint and longer wait. I think this is a real, tough challenge in every rich or poor countries, including Canada and Malaysia.
  • commute — bus 238 is about 5-min frequency, 10-min journey from bus interchange.

Conclusion at the personal level — My recent polyclinic experiences help foster a growing self-reassure that as long as we maintain our Singapore citizenship, we don’t need to earmark a huge sum for our elderly medical needs. Until recently, I used mostly private clinics, which are still a fraction of the cost in U.S.

When I visit any U.S. service provider I often feel dis-functional, perhaps a deep-rooted bias.

I would guess very few governments take care of their ordinary old citizens so well.

Q: In 20Y when I grow old will the SG system deteriorate?
A: I have reason to believe it won’t.

I now feel the elderly medical cost + daily living is rather affordable despite SG’s reputation, but this is a feeling not really based on facts

— Oct 2020, i brought my son to polyclinic for 3 issues: 1) acne 2) jock itch 3) BMI
wait time: 5-20 minutes to see doctor. Medicine wait was 5-10m. Appointment counter wait was close to an hour.

Costs and polyclinic subsidies:

  • consultation: $48 – $41 subsidy = $7 payable
  • 5 medicines for acne and jock itch: $23 – subsidy = $9 payable
  • total $71 – subsidy = $16 payable

[17] sg as#1 retirement destination #Dilip

Posted on by tiger40490

See also

Hi Dilip,

After our chat, I wrote down my reasons. Singapore and U.S. (perhaps near NY) are two of my most likely retirement destinations. The advantages of Singapore include:

  1. in-patient medical — .. care is subsidized (for Singapore citizens), including all major operations and hospitalizations. In some cases (like mine) there’s no deductible or co-insurance and no claim limit.
  2. climate — My wife hates cold weather. I will, too, when I get older
  3. cost level — Excluding housing and cars, most everyday expenses are 15% to 30% cheaper than U.S. so our savings are more significant.
    1. Stable inflation. I have little worry about inflation in Singapore.
  4. nanny sate — Essential services from government. Singapore government is known as a nanny state, esp. attentive to senior and low-income citizens’ needs — maintenance; out-patient health care; disaster management; taxes ..
    • Shrewd fiscal policies. Government won’t run out of money and cut services
  5. My wife can work part time till an old age, as a Chinese teacher.
  6. Chinese communities — My wife much prefers Chinese communities. There are a few Chinese communities in NY area but we can’t afford the housing cost therein.
  7. My wife has a large extended family in China, so we could visit them easily. My mother may also live a very long life, and she too has an extended family in China.
  8. driving — No driving required when we grow old. Excellent public transportation. I lived in Singapore for about 20 years, never owning a car.