CPF minimum sum raised to $106,000 from July
THE Minimum Sum (MS) for Central Provident Fund members who turn 55 from July 1 will be raised to $106,000 – from the current $99,600, the CPB Board announced on Monday, along with other changes to the Medisave contributions and withdrawal rule.
This means that CPF members who turn 55 from July 1 to June 30 next year will have to set aside the $106,000 cash savings in their Retirement Account, from which they will will get a monthly payout of $910 from age 64 for about 20 years.
The current MS, which applies to members who turn 55 from July 1 2007 to 30 June, is $99,600, which gives a monthly payout of $790.
The new MS is in line with the announcements made in August 2003 that the CPF MS will be raised gradually to reach $120,000 in 2013, said a CPF board statement.
‘The increase in MS, which includes an adjustment for inflation, is to ensure that Singaporeans set aside sufficient savings for their retirement,’ it added.
Phasing out 50% withdrawal rule
The board also announced on Monday that members who are unable to meet the full CPF MS at age 55 are allowed to withdraw the first $5,000 or 50 per cent of their savings in their CPF Accounts, whichever is higher.
Members who are able to meet the full MS will be allowed to withdraw the remaining monies in their CPF accounts.
As announced in 2003, the percentage for withdrawal will be cut back from the current 50 per cent to 40 per cent Jan 1 next year, and this will be further reduced every year by 10 percentage points.
This means that from Jan 1, 2013, CPF members must meet the CPF and Medisave Minimum Sums first before they can withdraw their remaining Ordinary Account and Special Account balances at age 55.
However, CPF members can continue to withdraw the first $5,000 from their Ordinary Account and Special Account balances.
The change in the withdrawal rule will enable members turning age 55 from Jan 1 next year to set aside more savings for their retirement.
- This is going to be one of the key topics of the month, CPF changes. I am currently only 30 years old and CPF doesn’t meet the requirement of $106k and by the time I reach 55 years old I cannot withdraw 50% of my savings in my CPF accounts which is rightfully mine.
I do understand the stand that CPF is actually is applying inflation into the calculation for the changes and uses our money for their “own purposes” which might include paying other Singaporean their CPF money when they reach 55 recently.
However, the changes are done in a fashion that the people 0n the ground cannot protest or voice their concern is disturbing. The very idea of changes of policy without the approval of the people means the policy MAY CHANGE AGAIN.
Regardless of the idea behind CPF annuity scheme to “save” money using some kind of insurance scare tactics is sad. Insurance companies are not fully protected against economic down turn and may change their policies anytime base on the market as stated in the “fine print” and can legally delay any kind of payment due to many “valid” reasons.
This swift change of policy on presumably our hard earn retirement savings probably will change the whole idea behind retirement savings.
It should be called retirement lottery ticket, if I turn 55 and only get a token sum of $5,000 and gamble that I don’t die before 64 years old due to high cost of living, super expensive medical treatment, suicide, mental illness due to depression and the higher chance of dying in a leisurely jog or long walk…these days.
The lottery also have to bet against MORE changes to the CPF money for example to extend the retirement age to even further!!! How about 80 years old? Or 90?? Maybe we don’t retire at all? Does that means the CPF money will never be taken out? It’s our hard earn money and should be given to us rightfully and with no questions asked…just like a bank account.
This will eventually drive every Singaporean to migrate before they give birth as this is the “legal” way of withdrawing their CPF money out. The kids are bonded to serve national service if they are above a certain age, so young Singaporean families tend to migrate whenever they have the chance. It’s the golden ticket to paradise and leaving behind the middle to lower income Singaporeans who can’t afford to migrate away? I guess so, this is the type of policy that the Singapore government are doing is driving more Singaporean talents away from Singapore.
What can be done? That depends how much you love this country.
1. You can work harder…and migrate.
2. You can work harder and stay and keep quiet.
Alternatively we can do a “The Happening” (movie) mass demonstration by freezing in public by the hundreds…but not committing suicide…haa…just freeze 10 minutes and go.
