Withdrawing from our retirement account verses withdrawing from Annuities.

[Stallion]

They just keep pumping in the reserves.

http://www.channelnewsasia.com/stories/singaporebusinessnews/view/322733/1/.html

GIC pumps S$9.8b into Citigroup
By May Wong, Channel NewsAsia | Posted: 15 January 2008 1951 hrs


SINGAPORE: The Government of Singapore Investment Corporation (GIC) will soon have a bigger stake in US-based Citigroup.

GIC will pump in US$6.88 billion (S$9.8 billion) into one of the world's largest banks. This is part of Citigroup's bid to raise US$12.5 billion of capital to boost its financial position.

GIC is the hand behind the management and enhancement of Singapore's reserves.

That is exactly what the company is doing with its latest purchase into Citigroup. The two companies took just eight days to seal the deal.

GIC's investment is done through a financial instrument called convertible preferred securities. This will effectively give GIC some form of protection.

For example, if Citigroup's stock price falls, GIC does not have to convert its securities into shares and will continue to earn dividends of 7 percent.

But such a prudent investment, with lower risks, will also mean that GIC will see relatively lower returns.

In a news release, GIC's deputy chairman and executive director, Tony Tan, said the company looks for returns on a long-term basis. He believes GIC's latest Citigroup investment will meet that objective.

Dr Tan said: "GIC is a financial investor seeking commercial returns on a long-term basis ... We believe that the investment in Citigroup will meet our long-term investment objective in terms of risk and return."

GIC now holds 0.3% of shares in Citigroup. The new deal will bring GIC's stake in the bank to 4% if converted to shares.

The investment will make GIC, as a single entity, one of the top five investors in Citigroup. However, GIC says it will not sit on Citigroup's board.

GIC's latest investment comes hot on the heels of a major deal last month, when it pumped nearly S$14 billion into the Swiss banking giant UBS. - CNA/ir

[tom]

Total investments within few weeks amounts to SGD 23.8 billion ( 23.800,000,000 ) correct ? so many zeros. 

  Singapore as a little red dot is so prosperous  but unluckily, Singaporeans are cash poor.

[tom]

Coming back to our topic about retirement.

Now the experts found out that CPF savings provide only 25% of funds needed for retirement.

Singaporeans rely too heavily on their Central Provident Fund savings to fund their retirement, a global survey on retirement planning by French financial group AXA has found. In fact, it is estimated that for the average Singaporean, CPF savings will provide only a quarter of the funds he or she need in old age.

Estimated the average Singaporean earns $50,000 a year. Financial planners say a good rule of thumb for retirement is to have a savings of 10 times your annual income. Thus the average Singaporean would need a lum sum of $500,000.

The CPF Minimum Sum will be raised to $120,000 from April, so the shortfall will be increase to $380,000.  Not sure if the financial planners are correct, or the authorities are not wrong. 

[tom]

Now it seems this annuities thing is getting more complicated.

Singaporeans had 12 types of annuity plans to choose from and the whole exercise will kick in only in year 2013, that's 5 years from today. but the first batch of CPFmembers to come under it are those who turn 50 this year. Once we decided on the type of annuity we want, thats it, no chance to change in future.

To better understand what it is  all about, lets wait for the CPF board to come out with the " cartoon " version. Easy to read and easy to understand. It is very important to understand the report thoroughly because this will decide how we are  going to get our monthly payments from the CPF when we retires.