• About Us
    • Fact Checking Policy
    • Ownership & funding information
    • Volunteer
  • Subscribe
  • Letter submission
    • Submissions Policy
  • Contact Us
The Online Citizen Asia
  • Opinion
    • Editorial
    • Commentaries
    • Letters
    • Comments
  • Current Affairs
    • Singapore
    • Malaysia
    • Indonesia
    • China
    • ASEAN
    • Asia
    • International
  • Finance
    • Economics
    • Labour
    • Property
    • Business
  • Community
    • Arts & Culture
    • Consumer Watch
    • NGO
    • Lifestyle
    • Travel
  • Politics
    • Civil Society
    • Parliament
    • Transport
    • Education
    • Environment
    • Health
    • Housing
  • Law & Order
    • Legislation
    • Court Cases
No Result
View All Result
  • Opinion
    • Editorial
    • Commentaries
    • Letters
    • Comments
  • Current Affairs
    • Singapore
    • Malaysia
    • Indonesia
    • China
    • ASEAN
    • Asia
    • International
  • Finance
    • Economics
    • Labour
    • Property
    • Business
  • Community
    • Arts & Culture
    • Consumer Watch
    • NGO
    • Lifestyle
    • Travel
  • Politics
    • Civil Society
    • Parliament
    • Transport
    • Education
    • Environment
    • Health
    • Housing
  • Law & Order
    • Legislation
    • Court Cases
No Result
View All Result
The Online Citizen Asia
No Result
View All Result

Will S’poreans “feel rich” too in retirement?

by onlinecitizen
13/10/2008
in Uncategorized
Reading Time: 4 mins read
0

Breaking News: Judge orders SDP leader, Dr Chee Soon Juan, and his sister, Ms Chee Siok Chin, to pay PM Lee and MM Lee damages totalling $610,000 for defamation.

Leong Sze Hian / Columnist

In the Channel NewsAsia report, “Labour chief says Singapore’s slide into recession unavoidable” (Channel NewsAsia, 11 October 2008), NTUC Chief Mr Lim Swee Say was reported as having said the following:

“Every month, when I receive my CPF statement, I feel so rich and the best part is, I know the CPF money won’t run away. CPF will still be around for a long, long time to come… Not only is it earning good interest, my capital is protected.”

First of all, I think the CPF Board issues CPF statement half-yearly, and not monthly. Or perhaps Mr Lim checks his CPF statement – diligently – online every month. But if he did, he shouldn’t have used the word “receive”.

Lets take a closer look at the CPF and see if it would make other Singaporeans, besides the minister, feel “rich” too.

Lesser, later?

I refer to the article “Easier to top-up loved one’s CPF” (Today, Sep 17).

Whilst I applaud the changes to encourage Singaporeans to top-up their CPF for retirement, other changes to the CPF may deter some from contributing more to their CPF.

Also, with the tax relief remaining at $7,000 per year, some may inadvertently top-up more and lose out on the tax reliefs that may otherwise be available if one staggers the top-up over the years.

Minimum Sum = minimum sum at retirement?

In this connection, the CPF Minimum Sum (MS) has been increased to $ 106,000, on 1 July 2008, and the phasing out of the MS 50 per cent withdrawal rule will start from 1 January 2009.

By 2013, the MS would have increased to $ 120,000, and the Medisave Required Amount (MRA) to $ 25,000.

This means that CPF account holders with less than $ 145,000 in 2013, can only withdraw $5,000 at age 55.

*($ 120,000 CPF Ordinary Account (OA) + Special Account (SA), plus $ 25,000 MRA)

Those who do not meet the MRA will be required to transfer any OA/SA in excess of the MS, to meet the MRA.

According to the Longevity Insurance Committee (LIC), 60 per cent of CPF account holders are projected to have at least $ 67,000 in their CPF OA and SA in 2013, and 25 per cent are projected to have less than $ 40,000.

Therefore, how many are expected to have less than the MS + MRA requirement of $ 145,000 in 2013 ?

Will more Singaporeans be financially stressed from age 55 to 65, which is the deferred CPF life annuity starting age, under the new CPF life scheme ?

Why increase minimum sum by 6.4% per cent?

This year’s MS increase from $ 99,600 to $ 106,000 is an increase of $ 6,400 or 6.4 per cent. In previous years, the increase was also about $5,000 per year.

Since historical inflation in Singapore is only about 2 per cent, why has the MS increased by 6.4 per cent ?

According to the LIC, the MS in 2013 is projected to be $ 134,000 after adjusting for inflation.

So, is the MS $ 120,000 or $ 134,000 in 2013 ?

At its current rate of increase, does it mean that Singaporeans like my daughter, who is 23, may only be able to withdraw $ 5,000 when she reaches 55, as the MS may have increased to about $ 280,000 by then ?

After using CPF for their HDB flat, how many Singaporeans will have more than $ 280,000 in their CPF when they reach 55 ?

How much will the MRA be by then – about $ 105,000, at its current quantum of increase at $2,500 a year ?

So, will the MS and MRA for my daughter be about $385,000 when she is 55?

Selling properties

From next year, there will be a change in the policy on the sale of property by those age 55 or older.

The CPF plus accrued interest will have to be returned to one’s CPF account to make up any CPF Minimum Sum (currently $105,000) shortfall.

So, particularly for lower-income Singaporeans who may have to downgrade their HDB flat to monetise the value of their HDB flat for retirement, there may not be sufficient funds available to buy a smaller flat, as any Minimum Sum shortfall may reduce the net flat sale proceeds available.

So, how many Singaporeans will, as the minister without portfolio does, feel rich when they are in their old age?

———

For just US$7.50 a month, sign up as a subscriber on The Online Citizen Asia (and enjoy ads-free experience on our site) to support our mission to transform TOC into an alternative mainstream press.

Related Posts

2024 Olympic torch relay to start in Marseille
AFP

2024 Olympic torch relay to start in Marseille

03/02/2023
India’s Adani shares plunge again after stock sale cancelled
AFP

India’s Adani denies rise due to Modi as shares fall again

03/02/2023
TotalEnergies says Adani exposure ‘limited’ at US$3.1 bn
AFP

TotalEnergies says Adani exposure ‘limited’ at US$3.1 bn

03/02/2023
India’s finance minister says markets ‘well regulated’ after Adani storm
AFP

India’s finance minister says markets ‘well regulated’ after Adani storm

03/02/2023
A man can be sentenced to death by a testimony of another, but CPIB finds it hard to prosecute with mountain of evidence and self-confession?
Opinion

A man can be sentenced to death by a testimony of another, but CPIB finds it hard to prosecute with mountain of evidence and self-confession?

03/02/2023
AFP

Myanmar junta imposes tough new measures on resistance strongholds

03/02/2023
Subscribe
Connect withD
Login
I allow to create an account
When you login first time using a Social Login button, we collect your account public profile information shared by Social Login provider, based on your privacy settings. We also get your email address to automatically create an account for you in our website. Once your account is created, you'll be logged-in to this account.
DisagreeAgree
Notify of
Connect withD
I allow to create an account
When you login first time using a Social Login button, we collect your account public profile information shared by Social Login provider, based on your privacy settings. We also get your email address to automatically create an account for you in our website. Once your account is created, you'll be logged-in to this account.
DisagreeAgree
0 Comments
Inline Feedbacks
View all comments

Latest posts

2024 Olympic torch relay to start in Marseille

2024 Olympic torch relay to start in Marseille

03/02/2023
India’s Adani shares plunge again after stock sale cancelled

India’s Adani denies rise due to Modi as shares fall again

03/02/2023
TotalEnergies says Adani exposure ‘limited’ at US$3.1 bn

TotalEnergies says Adani exposure ‘limited’ at US$3.1 bn

03/02/2023
India’s finance minister says markets ‘well regulated’ after Adani storm

India’s finance minister says markets ‘well regulated’ after Adani storm

03/02/2023
A man can be sentenced to death by a testimony of another, but CPIB finds it hard to prosecute with mountain of evidence and self-confession?

A man can be sentenced to death by a testimony of another, but CPIB finds it hard to prosecute with mountain of evidence and self-confession?

03/02/2023

Myanmar junta imposes tough new measures on resistance strongholds

03/02/2023
Malaysia High Court dismissed DPM Zahid’s application to get passport returned permanently

Malaysia High Court dismissed DPM Zahid’s application to get passport returned permanently

03/02/2023
Why is Gautam Adani’s Indian empire in turmoil?

Adani turmoil a key test for Modi’s India Inc

03/02/2023

Trending posts

Former Singaporean shares change of life in Australia with annual pay of S$80,000 as a plumber

Former Singaporean shares change of life in Australia with annual pay of S$80,000 as a plumber

by Yee Loon
30/01/2023
25

...

Earning only S$400 a month, delivery-rider turned hawker threw in the towel after two years of running a rojak stall

Earning only S$400 a month, delivery-rider turned hawker threw in the towel after two years of running a rojak stall

by Yee Loon
26/01/2023
24

...

They have done a fine job of confusing us about the jobs situation

They have done a fine job of confusing us about the jobs situation

by Augustine Low
01/02/2023
36

...

Two Indian nationals paid about S$330 and S$730 respectively for forged certificates submitted in their S-Pass application

MOM found issuing EPs meant for foreign PMETs to PRC waitress and general worker

by Correspondent
26/01/2023
41

...

Singapore warns slower economic growth in 2023

Less than 1 in 10 jobs created in first three quarters of 2022 went to Singaporeans?

by Leong Szehian
28/01/2023
69

...

Excessively charging for an essential need, and calling it affordable because people still can pay for it?

by Terry Xu
31/01/2023
40

...

October 2008
M T W T F S S
 12345
6789101112
13141516171819
20212223242526
2728293031  
« Sep   Nov »

The Online Citizen is a regional online publication based in Taiwan and formerly Singapore’s longest-running independent online media platform.

Navigation

  • Editorial
  • Commentaries
  • Opinion
  • Politics
  • Community

Support

  • Contact Us
  • Letter submission
  • Membership subscription

Follow Us

  • Facebook
  • Twitter
  • YouTube
  • Instagram
  • Fact Checking Policy
  • Privacy Policy

© 2022 - 2023 The Online Citizen Asia

No Result
View All Result
  • Opinion
    • Editorial
    • Commentaries
    • Comments
  • Current Affairs
    • Malaysia
    • Indonesia
    • China
    • ASEAN
    • Asia
    • International
  • Finance
    • Economics
    • Labour
    • Property
    • Business
  • Community
    • Civil Society
    • Arts & Culture
    • Consumer Watch
    • NGO
  • Politics
    • Parliament
    • Transport
    • Education
    • Environment
    • Health
    • Housing
  • Law & Order
    • Legislation
    • Court Cases
  • Lifestyle
    • Travel
  • Subscribers login

© 2022 - 2023 The Online Citizen Asia

wpDiscuz