Singapore–A 60-year-old Keban Baru resident working part-time who wants to remain anonymous, criticized the CPF retirement scheme. He states how in order to withdraw from his CPF, he has to be 65 years of age.
“I want to stop work already, but cannot” as he has to continue working to fend for himself.
In relation to CPF, he refers to it as “can see but cannot touch.” Similarly, he also states that the “standard living in Singapore is too high” due to the government being “very unfair”. When questioned what he means by this, he states that the “country so small, the PM all high salary! What they do? They do nothing!” He also stated how he would “migrate” if he had the money to do so.
The basic retirement sum is raised yearly as part of the recommendations made by the CPF Advisory Panel in 2015. The panel recommended that the basic retirement sum be increased by three per cent each year for members who turn 55 between 2016 and 2020.
It is important to help Singaporeans save more for retirement adequacy, said Minister for Manpower (MOM) Josephine Teo in 2019. She recommended that the Central Provident Fund (CPF) basic retirement sum should be regularly adjusted to ensure the payouts remain relevant to members.
The basic retirement sum for a CPF member who turned 55 in 2016 was S$80,500, while the basic retirement sum for a member who turned 55 in 2017 was S$83,000. The basic retirement sum for a member who turns 55 in 2019 is S$88,000. This amount will go up to S$90,500 this year.
Mrs Teo had mentioned that: “One factor affecting retirement adequacy is inflation. When savings and monthly payouts are fixed, their real value erodes over time.”
A member turning 55 in 2020 who sets aside his basic retirement sum of S$90,500 will get S$740 to S$800 in lifelong monthly payouts from age 65 in 2030.
On justifying the rate of adjustments made by the CPF Board, Ms Teo said: “One factor affecting retirement adequacy is inflation. When savings and monthly payouts are fixed, their real value erodes over time.”
This rate of adjustment thus takes into account long-term inflation and increases in the standard of living.
However, for Keban Baru resident, his frustration draws from his inability to retire due to the funds required to match the cost of living in Singapore. The CPF retirement scheme further entrenches this as he is unable to withdraw his money until the age of 65. -/TISG