Wednesday, February 21, 2024

Poof! Goes The CPF SA 'Shielding' Hack

After the Budget 2024 announcement recently, the local 'Pro-CPF 1M65' community immediately went into meltdown mode. CPF-rich members were bemoaning the removal of the CPF SA shielding hack. Here is my personal quick take on this issue. Perhaps some lessons to be learnt. 

Unlike other bloggers or influencers out there, I never ever talk about CPF shielding because it is a loophole in the system. Its removal is very much expected. It is called a ‘loophole’. Loopholes are meant to be closed eventually. When shielding was heavily promoted in the mainstream media in recent years, I knew it is only a matter of time before it is removed. To be honest, I am surprised the government allowed it to go on for so long. The lesson here is not to plan your retirement heavily on a loophole.

Do not put all your eggs in one basket. It is always prudent to build multiple income streams in our retirement plan. For me, I build my retirement nest egg like a pyramid or a soccer team. Things in life can change fast. Policies can change overnight. Having multiple passive income sources would prepare us to better adapt to changes. The only constant in life is change. Learn to roll with the punches and navigate through the changes. 

Never over-commit to a single retirement instrument. Similar to building a title-winning team. Some clubs go all-in and spent their entire transfer budget on a star striker, but unfortunately he suffers a serious injury and the club’s season goes down the drain. I treat CPF as my ‘goalkeeper’ but I am not spending my entire summer transfer funds on him.

Lastly, is sharing really caring? In local slang, we say "Limpei found a good lobang! Mai Gong Bo Jio!" I understand the feeling of uncovering a loophole can be exhilarating. You might even feel like a genius, but maybe it is better to curb that enthusiasmMaybe next time when we discover a loophole somewhere in the system, let's not get overly excited and go running to produce tonnes of social media content on said loophole before blasting it all over the internet. Food for thought...

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