Singaporeans turning 55 between July 1 this year and June 30 next year will need to set aside a higher minimum sum of $155,000 ( $148,000 in 2013) in their Central Provident Fund (CPF) accounts.
CPF Minimum Sum is a mandatory amount of savings that we must leave in our CPF accounts so that we can receive a regular income during our retirement years.
The minimum sum was set at $80,000 in 2003 and will be raised every year till it reaches $120,000(in 2003 Dollars) in 2015 to keep up with inflation and expected higher standard of living in Singapore.
What does all this mean to us?
First we need to know how much $155,000 will last for us. CPF Life will provide a monthly income of less than $1000 ( NON GUARANTEED ) for life. Is this enough for us? Given that inflation is at about 3% p.a. in Singapore, we must seriously look at this amount.
$1000 a month will not be enough to live decently in Singapore… if you have been living on $5000 monthly expenses, I am sure you will not be sustain for long. Your bank savings will be depleted very soon before you say goodbye to this world.
Do consult your independent financial adviser to work out a sensible retirement income plan now. There are many plans in the market now and you will need to find one that suits you and not the other way round. Don’t leave your future into the hands of a friend who might not have all your needs taken into consideration.
You may want to know more about CPF Minimum Sum Scheme here