Category Archives: Central Provident Fund (CPF)

Basic Retirement Sum a more realistic amount for workers

Source: The Straits Times 4 Feb 2015

Source: The Straits Times 4 Feb 2015

National Trades Union Congress (NTUC) said an advisory panel’s proposal to revaluate the CPF Minimum Sum to the Basic Retirement Sum is good as it is a more achievable amount for most employees to achieve retirement adequacy. NTUC supports the use of long-term inflation to accustom the Basic Retirement Sum, which could provide more predictability. NTUC also urged the Government to make sure that the public is well informed beforehand on any adjustments to the Basic Retirement Sum to ensure transparency on the calculated adjustments. NTUC also suggested that the government introduce incentives to encourage members to retain their retirement savings so that their monthly pay outs will not reduce.

 

Do you agree with the new proposal of having the basic retirement sum is a good idea? Will you be able to hit the basic retirement sum when you retire? However, is the basic retirement sum sufficient to sustain your ideal retirement lifestyle?

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7 things to know about CPF Minimum Sum

Source: The Straits Times,  21 Jan 2015

Source: The Straits Times, 21 Jan 2015

The Minimum Sum is the amount that must be retained in Central Provident Fund (CPF) for retirement when a member turns 55. 50% of the sum can be in the form of a pledge from a property purchased with CPF savings. The Minimum Sum provides CPF members with monthly payouts during retirement. It varies from the age of individuals and is adjusted with inflation. When a member turns 55, money from his Special and Ordinary accounts will be transferred into a newly-formed Retirement account. The Retirement account will hold up to S$155,000 or it varies with his age-group. Any extra will continue to grow in his respective accounts.

A member can still withdraw up to the first $5,000 from his CPF account even though he is unable to meet the Minimum Sum as the CPF board will immediately pledge the property he purchase during his CPF for up to half the Minimum Sum. Upon reaching 65 years of age, members will get monthly payouts, depending on the cash savings he has in his Retirement account. For members who do not make any withdrawal, money in their Ordinary account will earn up to 3.5% per annum. For Special, Medisave and Retirement accounts, the current interest rate is up to 5% annually.

Members can choose not to set aside the Minimum Sum unless they have purchased life annuity with payouts that is equivalent or more than their expected retirement sum. Over the years, the minimum Sum was set at $80,000 in 2003 and has rose over the years to match up with inflation and higher standard of living.

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Will you reach the minimum sum when you retire? Are you aware how much do you need for retirement? Besides CPF’s retirement account, do you have other sources of money for retirement? What happens if you do not have enough for retirement and you are too old and weak to work?

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MediShield Life: How will you benefit from it?

Source: The Sunday Times, 20 Jan 2015

Source: The Sunday Times, 20 Jan 2015

MediShield Life, when roll out in end of this year, is a compulsory healthcare insurance scheme which covers all Singaporeans for life which will replace MediShield. The key differences between MediShield and MediShield Life are:-

  • Covers everyone, including those with pre-existing conditions that are not covered under MediShield.
  • MediShield Life has higher claim limits for hospital bills and outpatient cancer treatment.
  • The initial lifetime claim limit has been removed in MediShield Life.

There are 3 premium subsidies with different eligibility – transitional subsidies for all Singapore Citizens, premium subsidies for lower to middle-income earners and special premium subsidies and Medisave top-ups for the pioneer generation for life. Premium subsidies for lower and middle-income households are applicable to Singapore citizens and permanent residents with a monthly per capita household income of less than $2600, and households with an annual income of $21,000 or less. The government will provide additional financial assistance for those who cannot afford premiums even after subsidies to keep all Singaporeans in MediShield Life. Those with severe pre-existing conditions will have to pay 30% higher premiums for 10 years.

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Over the years, the higher cost of living and higher medical bills has led to the government to revamp and introduce enhanced policies. This year, MediShield Life will replace MediShield to cover more Singaporeans regardless of their income. Do you think that having MediShield Life is sufficient for your hospitalization coverage or do you prefer to fork out more money on your own to get fully comprehensive hospitalization coverage?

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Only one in five Singapore investors think CPF is enough for retirement

Only one in five Singapore investors think CPF is enough for retirement

Only one in five Singapore investors think CPF is enough for retirement

Source: The Straits Times 13 Aug 2014

Based on a recent survey, roughly 50% of the Singapore investors find that their CPF savings is insufficient for their retirement. About 40% surveyed responded that returns are too low and 25% surveyed have contributed more to their CPF account voluntarily. The survey also showed that many who do not top up their CPF accounts due to the lack of funds. Approximately 66% of the CPF contributors expressed to see more flexibility in withdrawing CPF monies. About 60% request for more education for retirement planning, while more than 50% hope for greater CPF contribution from employers or government.

Although CPF savings is important for retirement, it must not be solely relied upon as a diversified portfolio is equally important for retirement planning. Do you only have your CPF savings for retirement or do you have other sources of retirement funds too? Start planning for your retirement so that you can have a comfortable lifestyle for retirement.

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