The Central Provident Fund (CPF) is a risk- and tax-free retirement savings plan. So why is there a sense of uncertainty among some people over whether their CPF monies can see them through old age?
Could it be that people have unrealistic expectations of better returns from a conservative savings plan? Or is it that they do not treat their CPF funds like their own money?
If CPF is primarily a savings plan for retirement, it should not be allowed for too many other uses such as housing, health care, education and investment.
The CPF Board cannot assume that all members will be prudent and spend within their means.
I have heard of people using their CPF savings to deliver their children at costly private hospitals rather than at public ones, or buying condominium units when they can afford only HDB flats.
The lack of care in managing one’s CPF funds could be because of the ease with which the cash can be dispensed – via a signature on an authorisation form.
If CPF did not exist, most Singaporeans would be putting their money in the bank, earning meagre interest. And their savings above $50,000 would not be protected if the financial institution fails.