As a young Singaporean who has just entered the workforce, I am at a critical juncture where I need to make important life decisions – getting married, buying my first home, and starting a family, all the while being mindful that the more I spend today, the less I may have for my retirement.
Hence, I was pleased to read Manpower Minister Tan Chuan-Jin’s illustration of a 25-year-old polytechnic graduate, Ben, who can save $165,000 in his Central Provident Fund (CPF) by the age of 65 – enough to meet the prevailing Full Retirement Sum of $161,000 (“Singapore Budget 2015: CPF Board to roll out one-on-one retirement planning services this year”; ST Online, Monday).
However, upon deeper analysis, I found that the CPF Minimum Sum has increased a whopping 437 per cent since its inception in 1987.
It has grown from $30,000 to $161,000 in 28 years.
If this trend continues, a 65-year-old Ben may need to set aside more than $800,000 for his retirement in 2055.
This is worrying for younger Singaporeans.
Will the Basic, Full and Enhanced Retirement Sums experience the same exponential increase of its predecessor, the CPF Minimum Sum scheme?
Muhammad Rasyid Abdullah