The road to riches isn't just paved with keys of condos

AS the Central Provident Fund (CPF), Singapore's pension scheme, was in the news recently, I was having a debate with a colleague on whether restrictions should be placed on the use of CPF savings to buy property, especially private property. It was not financially smart to commit that money - meant for retirement savings - to buy a pricey apartment, I said.

She responded: "Why deny people the chance to break into the upper classes? You'll exacerbate inequality if you prevent people from buying private property."

But the bigger issue is retirement adequacy, which is the original goal of the CPF - and remains the main goal - I argued. After wiping out your CPF savings to help pay for the S$240,000 downpayment on a S$1.2 million home, as well as your monthly CPF Ordinary Account contribution to help pay for the $4,000-a-month 30-year mortgage (on a 3 per cent interest rate), how much will you have left by the time you're 55 when you have to pay for CPF Life? You might still be paying the mortgage by then. Will you still have a job?