CPF Minimum Sum to be raised again, again and again

[Ktglfc]

MCF has many rich and elites. You dun know meh?

 

Majority of sandwiched middle class are oppo supporters.

 

Definition of sandwiched middle class (someone in MCF set this criteria list before):

 

- household income < $500K p.a.

- personal income < $250K p.a.

- own 1 car (2, at most)

- stay in HDB or condo, and if lucky enuf, landed - but outside D10 CCR

 

These are the most dissatisfied and unhappy segment of the populace and want to see change in the ruling party.

 

Other than the rich and elites, the not-so-well off are all quite happy with the incumbent garmen.

They form the 60% majority.

Very formidable and daunting ...

By the definition, it should be lower class and sandwich middle class

 

Oh ya, the rich and elites may not always vote in favour. Time has changed.

Anyway, Voting Is Compulsory. Voting is Secret :)

[Wt_know]

very well written ...

so, if your salary increment (per annum) is less than $7000 ($583.33/month) = unacceptable?

 

Will We Ever Get Our CPF Money? CPF Raises the Minimum Sum by $7,000 to $155,000

 

Let’s be honest. You’re not a huge fan of the Central Provident Fund (CPF) are you? If you’re below the age of 50, seeing 20% of your monthly salary disappear into that black hole known as your CPF account probably doesn’t make you too happy. After all, its money you really can’t touch.

 

The reason why the government won’t let you touch it is because it’s for your “retirement.” Well, you must reach the CPF Minimum Sum (MS) first before you can “retire” at age 55. That’s 148,000. Oh, no it isn’t. It’s going to be $155,000 starting this July, an increase of $7,000 dollars!

Is it me, or is it just getting harder and harder to retire every year?

 

Why Is the CPF Minimum Sum (MS) Raised Every Year?

The short answer to this question is simple – inflation. The MS is increased every year in order to account for inflation. If you’re unfamiliar with the concept of inflation, you can read this.

 

The reality is that the price of everything will rise every year, and the powers that be over at CPF have dictated that your CPF MS must increase as well to keep up with the ever increasing cost of living.

 

To give you an idea into just how much your CPF MS has increased over the last 14 years, the MS in 2000 was ONLY $65,000. That’s a 138% increase!

That’s a Great Reason, But What About Wages?

While the annual CPF MS increase is tied to the rate of inflation, what it misses out is wage growth. That’s the number that’ll determine whether you’ll be able to make the CPF MS or not.

 

Think about it. The CPF MS went up from $148,000 to $155,000 – a 4.7% increase. Look back at your salary over the last few years and calculate whether your wages went up higher than that.

 

You might be surprised (or disappointed with the results you find.

What’s worse, according to a press release by ECA International, a global consulting firm, companies in Singapore are only expected to give employees a pay increase of 4.5%.

 

That brings up a very important question – are wages in Singapore really enough to keep up with the annual CPF MS increase?

 

Sounds like a good future article to cover. Follow us on Facebook as we look deeper into the issue.

In Short, the Yearly MS Increase Is Like an Annual Kick In the Crotch (And a Wake-Up Call)

A few years ago, I asked my cousin what it was like to graduate Ranger school at Fort Benning, Georgia. His response was something like, “It’s like getting kicked full force in the nuts every day for two months, but it’s worth it!”

 

He did have a point though – at least there’s an end goal to the pain you have to endure.

The annual CPF MS increase on the other hand is more like a yearly financial kick in the crotch – especially if your income isn’t increasing along with inflation. That means there might be NO payoff for all the pain you endure.

 

Well, there is a way you can get your all of your CPF funds, but you’re not going to like it (*hint* it involves a casket and a mourning relatives).

 

So if your annual “salary reviews” only provide a $50-$100 annual increase, you seriously cannot keep up with the CPF MS when it’s going up by thousands of dollars every year!

 

What can you do? Well, aside from asking your boss for a better raise every year – not much. That’s especially true if you’re using your CPF account to finance your mortgage repayments like most other Singaporeans.

 

In that case, you’re probably getting farther and farther away from retirement every year the CPF MS goes up.

Then again, if you’re relying just on your CPF account for retirement, you’re setting yourself up for failure. If anything, the CPF MS increase should be a wake-up call to start taking charge of your finances and retirement planning.

 

If you’re already in your 30s, and haven’t started investing, you’ll want to get started soon.

 

 

Edited May 11, 2014 by Wt_know

[Joseph22]

2009 to 2014, no financial crisis, members not 65 years old, draw down yet to start, already payout cut, where the money go?

U do know that opposition party didn't even bother to bring this up?? There is a reason why they didn't. Likely they know it's a non issue. Seriously take cue from opposition especially worker party. What u had ask they likely had thought about it and check on it. And likely found out it is not dubious hence they did not bother to bring it up in parliament.

very well written ...

so, if your increment (per annum) is less than $7000 ($580/month) = unacceptable?

 

Will We Ever Get Our CPF Money? CPF Raises the Minimum Sum by $7,000 to $155,000

 

 

Except, from the beginning the gahment had already say that it will slowly increase to 120k 2003 value.

 

If they had wanted to complain, they should done so in 2006. And we know what is the voting result in 2006.

[Goldbug]

U do know that opposition party didn't even bother to bring this up?? There is a reason why they didn't. Likely they know it's a non issue. Seriously take cue from opposition especially worker party. What u had ask they likely had thought about it and check on it. And likely found out it is not dubious hence they did not bother to bring it up in parliament.

 

Except, from the beginning the gahment had already say that it will slowly increase to 120k 2003 value.

 

If they had wanted to complain, they should done so in 2006. And we know what is the voting result in 2006.

 

brompton bike saga dig up by online forum leh

[Tigerwoods]

Actually they should have named it Gov Tax when they first started.

use the money collected for social security for eligible people. Then nobody will have the expectation of feeling good looking at the account and feeling pissed for not able to take it out.

I guess they justify to keep the CPF money and dish out in small amounts to you because they gave between 2.5~5% interest rate and claim ownership.

[Kangadrool]

can I have no interest rate, but withdraw all so that I don't burden the state with interest subsidies?

 

I guess they justify to keep the CPF money and dish out in small amounts to you because they gave between 2.5~5% interest rate and claim ownership.

 

[Tigerwoods]

can I have no interest rate, but withdraw all so that I don't burden the state with interest subsidies?

 

 

Of course cannot lah... its the law that they must gib u interest.

Remember - gib u chicken wing, take back the chicken. just go check when did they gib you something and not take back more ? Only during erection...

[Tigerwoods]

very well written ...

so, if your salary increment (per annum) is less than $7000 ($583.33/month) = unacceptable?

 

Will We Ever Get Our CPF Money? CPF Raises the Minimum Sum by $7,000 to $155,000

 

 

it makes me mad to see their CPF money locked up and only by your 60s they give you small pocket money, while a Minister can get lotsa pension money upon reaching 55 and if he desires, take up a lump sum of pension at one go.

 

It befits the saying the rulers help themselves with the spoils on the table top while the servants get crumbs under the table. and you thought they are your servants voted into office to serve you.

[Solar]

 

 

I wonder if n when the P8P r gone n it was discovered SG is bankrupt n no more money left at all.

 

The we will see all the world newspapers have headlines, "The biggest n best run Ponzi Scheme went on for almost 40 years n was not detected".

that situation...u die, I die eeeverybody die...

except those holding foreign currency and gold bars on hand

[Si4dr]

I thought inflation rate in SG only ard 2%?

 

I am afraid one day they will ask u compulsory top up with cash if u cannot meet the MS!

 

Is a joke in democracy country where we cannot have a choice to decide what to do with our own money.

 

还钱于民! Return the money to people!

 

 

[Astrid]

except those holding foreign currency and gold bars on hand

Already started buying gold bars liao, 1kg at a time, when gold prices tanked a whole ago.

Better be prepared man!!! Safer than sorrier :-P

 

When (no, IF) Oppo walks into the cabinet, SGX, SGD will sure free fall one ...

[Luckcent]

I see that many of you are complaining about your precious CPF. May I remind you if you have voted for the lightning party, please STFU because you have given them the Mandate to do what they think is good for you. Period. Feel happy that they take care of your ars*. hahahaha.

[Astrid]

Alternative is to vote oppo and buy plenty gold bars as a hedge lor!!

Hehe

[Sdxx]

Getting old so now I am more interested in CPF issue. I think CPF is a good but not perfect scheme. To debate objectively, I think we shouldn't be bias and say things like the money cannot get, temasek get, etc etc. Like someone has already pointed out, the money is not cannot get, it is kena lock up till we are 65 years old. If you very rich, you still can get whatever above the minimum sum at age 55. Of course we know the minimum sum is very high and it will be 155k come this July. So we all have very little money to cash out at age 55. But that's does not mean the money kena makan. If we expired and still got money in the CPF, it does not go to temasek or ah gong or whatever, the money still have to pass to our beneficiary.

 

So let's be less emo and debate objectively lah. I also want all my CPF money at 55. 55 to 65 can see cannot touch and I am sure I won't finish all the money before I expired since the payout is monthly from 65. But the opposite can also be true, now with the CPF life thingy I also don't know how it work? If I live till 120 years old which mean I earn because 155K how to last until I am 120 years old?

 

So if I expire early, then sayang leg, work so hard earn all the money then cannot spend all before I expired? some more have to pass the money to my children and their spouses? If they good still ok, if unfilial then for nothing my money become theirs? But seriously if I live till 85 or even 80 years old I think 155K to last 15 to 20 years reasonable lah.

 

There again, why not give me the money for myself to manage? That's the way I prefer but I think ah gong say chances are people will squander all if not majority of the money away too early before they expire? And that will cause problems to the society? Agree or disagree? That's debatable but please don't anyhow say CPF money don't know go where that kind of thing.

[Wt_know]

i agree that cpf is a good scheme.

the big question is "the sum does not add up"

 

1. we were told spore inflation is not high. if you do not buy car buy property buy rolex or eat at restaurant, inflation is very low ... we were told 2% +-, no? and if the article is correct, min sum had increased 138%

 

2. suka suka up min sum ... suka suka change payout ... suka suka 55-62-65 ... imagine you get onto a field to play football but the opposite team can change rule anytime and said it is "good" for both teams

 

3. dulan is not merely because of party ... because of prata flipping policy and slow in responding to issue be it transportation, property, education, healthcare ...

 

i recall there was a question why msia epf can give 6%+ interest which is higher than cpf

and the answer is sgd is strong ... walao ehh

if cpf interest is higher then min sum is self sustain already right?

simi sgd is strong?

 

i am not saying opposition party would do better or they would do differently.

the current caretaker need to buck up, no?

Edited May 11, 2014 by Wt_know

[Astrid]

I think the CPF scheme and MS concepts are good ones, to take care of the people when they grow old, in a non-welfare state like Singapore. Imagine any severe sickness (but curable, surgical / therapies, or otherwise) striking you above 65, equating to a death sentence - just because you have no money to your name!

 

But continually increasing the MS amount (moving the goal posts, as many have put it), is adding unnecessary uncertainty and confusion to what is already a well-understood and communicated long-term plan. To many, these impromptu changes may be viewed as disruptive to one's retirement plans.

 

Some may have to forego long-awaited plans to tour the world, setup a small business, fund children's tertiary education, etc.

 

Perhaps, a better way is to offer opt-in options for MS extension schemes, to be offered at regular 3-5 year intervals - to keep pace with inflation (no one is immune to the latter, rich or poor).

 

BUT, such opt-in schemes will give people an option.

The high-salaried folks, who can still draw out monies at 55, above the MS, may want to opt in and continue earning the 4% interest.

 

The not-cash-rich folks, who need to withdraw their CPF monies above historical-MS can still do so, by not opting into MS increases. But then the choice (and risk taking) is theirs - as whatever that's left in their meager historical-MS may see them ending up from hand to mouth, by the time they reach 65 ... that is, if they live to see 65!

Edited May 11, 2014 by Astrid

[Wt_know]

even one old liao decided to retire at 62 ... sibei tired liao. stay home read newspaper and play with grandchildren and play chess at downstair also must wait 3 years then can drawdown/touch MS at age 65?

Edited May 11, 2014 by Wt_know

[Sdxx]

In 2003 ah gong already said the MS will increase yearly till 2015 to 120K in 2003's money. It started with 80K so next year will be the last increase but don't happy too fast, the amount will still be adjusted to reflect the inflation. So if next year 177K is 120K in 2003's money, maybe 180K in 2016 is 120K in 2003's money. Depreciation in money value usually can calculate one but I don't know how but I am sure a lot of reports out there if we really bother to find out. So this one maybe not so much of moving goal post. However, 2008 onward cannot withdraw all money at age 55 and the 'drawn down age' kept increasing till 65 as it stands now. Will it increase further?

 

Actually if we have money from 55 to 65 then no problem. The 10 yrs lock down is just like paying single premium upfront for insurance with 10 yrs maturity. After that every month take money. No issue. The problem is will we actively plan for our retirement? I don't want to depend on ah gong and I think I better prepare and responsible for my old age myself regardless who is the ah gong. So even ah gong change I also no scare.

Edited May 11, 2014 by Sdxx