Get a better return on your CPF savings

Someone asked me to write about CPF.

He said,
"Most of CPF goes to ordinary account- buying government bonds and the return is 2.5%. i think this is terrible policy. Long term retirement savings should be partly invested in the stock market. ST index went up 20% this year and we stuck with 2.5% on the ordinary account.
Not everyone has high salary to save privately beyond what we get in CPF. Many people will not have enough to retire. this disaster is waiting to happen."

Here are my comments:

1. Most people use all of their ordinary account to pay for their HDB flat or private housing.

2. Those who do not use their ordinary account for housing has the option to invest their money under the CPF Investment Scheme into any of the approved investment scheme. They do not need to keep the money to earn 2.5% interest.

3. I recommend that they invest in the STI ETF (exchange traded fund) .This ETF earned a return of nearly 20% in 2012. Those who wish to know how to make this investment should attend the Talk on investments, organised by FISCA (www.fisca.sg).