CPF retirement sum raised

CENTRAL Provident Fund (CPF) members will have to set aside more in their Retirement Account from July 1.

The new ceiling of the CPF minimum sum will be $123,000, up from the current $117,000.

Those who turn 55 from July 1 and do not have $123,000 can withdraw only a proportion of their CPF savings. If their balance is $5,000 or less, they can withdraw the full amount.

The latest revision is in line with the plan announced in August 2003 to gradually raise the CPF minimum sum to $120,000 by 2013, a ceiling that will be adjusted for inflation.

The aim of the change is to ensure that Singaporeans have enough savings for their retirement, the CPF Board said in a statement yesterday.

Similarly, the minimum sum in the Medisave Account will go up to ensure Singaporeans have enough savings for hospitalisation expenses.

It will be $34,500 from July 1, up from $32,000 now. Any excess amount can be withdrawn at age 55 or older. A CPF member, however, can opt to have $5,000 more than the minimum sum in Medisave.

This higher balance is referred to as the Medisave contribution ceiling and it too will be raised, from $37,000 to $39,500.

The Medisave, Special and Retirement accounts earn 4 per cent interest - higher than the 2.5 per cent paid on money in the Ordinary Account.

The CPF Board also said members who have the full CPF minimum sum will receive about $1,100 a month when they reach their draw-down age. For those who turn 55 between July 1 this year and June 30 next year, their draw-down age is 65.

Members reaching age 55 can attend one of three seminars the CPF Board is organising next month.

The seminars, to mark CPF turning 55 in July, will inform members what happens to their CPF savings when they reach 55, and they can learn about the new CPF Life scheme.

They will be held at Suntec City. The first seminar on June 26 is fully booked. The next two are on June 27.

Source: Straits Times, 15 May 2010