Financial Planning: Are you ready?

~by: Leong Sze Hian~

I refer to the article “More making voluntary CPF top-ups” (ST, Oct 10).It states that “The Are You Ready” campaign comprises a set of checklists on four key aspects of financial planning – cash flow, health care, housing and retirement”.

So, how are Singaporeans doing in these four aspects of financial planning? Let’s look at  officially available statistics to give some indications.

Cash flow

Under the Adequacy of Retirement Income sub-index in the Mercer Pensions study, Singapore’s net income replacement rate is ‘particularly low’.

The retirement income replacement rate is a measure of a pension system’s effectiveness in providing income during retirement to replace earnings which were the main source of pre-retirement income.

Why is it that Singaporeans have the highest contribution rate in the world (36.5%), but their retirement income replacement rate is so low?

CPF pays probably the lowest interest historically amongst all pension funds in the world. This has resulted in practically every study indicating that Singaporeans retire with one of the least replacement income in retirement, despite having the highest pension contribution rate in the world.

Health care

How many people who were discharged from hospital were unable to pay their medical bills? The latest statistics from Credit Counseling Singapore is that about 21 per cent of Singaporeans who sought credit counseling were due to medical fees.

How many do not have any form of medical insurance, or have less than $500 or nothing in their Medisave accounts?


The last time that HDB concessionary loans in arrears over three months statistics was given, the figure was 28,000. What is it now?

The last reported statistics on people over age 55 who still had HDB mortgages to pay was about 25,000. What is the latest figure?

(Note: Singapore does not disclose public housing statistics like mortgages in arrears, foreclosures. Only occasionally when questions are asked in Parliament are HDB concessionary loan statistics disclosed, but HDB bank loan statistics are never disclosed, this despite there being more than 160,000 HDB bank loans.)


The latest CPF Life Report says that about 60 per cent of Active CPF Members are projected to have at least $67,000 in 2013. But the current  CPF Minimum Sum  is now $131.000, 1.95 times more than the $67,000 that 60 per cent of Active CPF Members are projected to have in 2013.

My question is how many Singaporeans have the current Minimum Sum in their accounts.

As there were about 1,646,700 Inactive CPF Members in 2009, does it mean that their data are excluded from the CPF Life Report?

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