CPF - Minimum Sum Up & Up

[Maxus-MIFA9]

CNA news report : CPF & Medisave Minimum Sum to be raised

Posted: 30 May 2012 1139 hrs

 

SINGAPORE: The Minimum Sums for both the CPF and Medisave accounts are set to be raised.

 

CPF members who turn 55 between this July (2012) and June next year (2013) will have to set aside S$139,000, up from the S$131,000 in 2011.

 

The CPF Board and Ministry of Manpower (MOM) said the amount has been adjusted over the years to account for inflation, longer life expectancies and Singaporeans' rising expectations of their quality of life after retirement.

 

They said that since 2004, the MS has been increased by S$4,000 each year to reach S$120,000 in 2013, as recommended by the Economic Review Committee in 2003.

 

The actual increases in MS are also adjusted for inflation each year.

 

The S$120,000 target in 2003 dollars is effectively S$120,000, adjusted for inflation between 2003 and the time the target is met.

 

Doing so preserves the real value of the target.

 

Based on 2011 inflation and incorporating the annual S$4,000 (in 2003 dollars) adjustment, the increase in MS due this year would have been S$12,000, which is relatively large compared with previous years.

 

The Medisave Minimum Sum (MMS) will also be raised from S$36,000 to S$38,500 from July 1 - making it an increase of 7 per cent.

 

The ministry said the move will help Singaporeans plan for their long-term healthcare needs.

 

The CPF Board and MOM said they'll spread out the remaining MS increases needed to reach their S$120,000 target over a longer period of four years.

 

This means they'll reach the target in 2015, instead of 2013.

 

With this change, the 2012 MS will be S$139,000, an increase of 6 per cent, or S$8,000, over 2011.

 

Without the change, the 2012 MS would have been S$143,000, or a 9 per cent increase, over 2011.

 

Changes will also be made for contributions to the Medisave Minimum Sum (MMS) to help Singaporeans plan for their long-term healthcare needs.

 

From July 1, the MMS will be raised to S$38,500, from S$36,000 - an increase of 7 per cent.

 

The MMS is the amount that a person who turns 55 needs to set aside for hospitalisation expenses in subsidised Class B2 and C wards, subsidised outpatient treatment for selected chronic conditions and basic MediShield and ElderShield premiums.

 

Members will be able to withdraw their Medisave savings in excess of the MMS at or after age 55.

 

Another change - also from July - is in the Medisave Contribution Ceiling (MCC).

 

It's the maximum balance a member may have in his Medisave Account.

 

This is set at S$5,000 above MMS and would be increased correspondingly to S$43,500, from S$41,000.

 

Any Medisave contribution in excess of the prevailing MCC will be transferred to the Special Account if the member is below age 55, or to his Retirement Account if he is above age 55 and has a MS shortfall.

 

In a blog post, Minister of State for Manpower Tan Chuan-Jin said that the minimum sum exists to help Singaporeans set aside enough to meet a basic level of needs in retirement.

 

That sum needs to be adjusted to account for inflation and also members' growing expectations of their quality of life during retirement.

 

Mr Tan added that it is encouraging to note that despite the rising minimum sum, the percentage of active CPF members meeting their minimum sum at age 55 has improved over the years.

 

In 2011, nearly one in two CPF members (45 per cent) met their minimum sum, compared to about two in five members in 2007 (36 per cent).

 

He added that among those starting work now, about 70 to 80 per cent should be able to attain the current level set for the minimum sum in cash (adjusted for inflation), by the time they retire, even after they have withdrawn money for a home.

 

- CNA/ck/cc

 

 

KNS, the current minimum sum is as good as increasing every year. The current increase is only from 1st July 2012 to 30 June 2013 which means, there will be an increase again from 1st July 2013 ..............

 

I fall outside his category which mean I has to have a minimum sum of $143,000/- and medisave of $38,500/- next year. The increase is calculated by "adjusted for inflation"..

 

quote: "In a blog post, Minister of State for Manpower Tan Chuan-Jin said that the minimum sum exists to help Singaporeans set aside enough to meet a basic level of needs in retirement.

 

That sum needs to be adjusted to account for inflation and also members' growing expectations of their quality of life during retirement.

 

He added that among those starting work now, about 70 to 80 per cent should be able to attain the current level set for the minimum sum in cash (adjusted for inflation), by the time they retire, even after they have withdrawn money for a home."

 

If he is really sincere of fighting inflation, help us by lowering our basic needs like housing, medical & transport cost. Those starting to work now would never meet their targets if the housing cost keep raising like no body business. Furthermore, by their retirement age, the minimum sum could have rise to $300,000/-... (taking into consideration at the age of 30 yrs old and 25yrs before retirement)

 

No one for sure that the retirement age to withdraw CPF, will not increase from 55 to 60 or more in future...

 

 

 

 

 

 

 

 

 

 

 

[Dumb]

Your monthly salary need to increase by $2000 to match the increase in min sum.

[Watwheels]

Every year got so much inflation how not to go up? It's either they up the withdrawal age or up the minimum sum. Withdrawal age got limitations unless ppl get to live forever like you-know-who. Only thing left to adjust upwards is minimum sum.

[Poper]

  On 5/31/2012 at 12:53 AM, Watwheels said:

Every year got so much inflation how not to go up? It's either they up the withdrawal age or up the minimum sum. Withdrawal age got limitations unless ppl get to live forever like you-know-who. Only thing left to adjust upwards is minimum sum.

 

Vote MIW out of a few GRCs in 2016 and we should see CPF policy changes..

 

Hope the 60.1% will do the right thing.

[Mustank]

Bro, i don tundertsand.

 

i thot if i got hdb or property under my name, and the value of the hdb is more than the mim sum, then i am not affected?

[QQDreamer]

basically they are telling us that forget about cashing out your CPF money. Give it all to them. I just wonder how many of us here can really reach that MS. perhaps if you are earning big bucks than perhaps you can reach. But generally for ordinary singaporeans like myself and perhaps majority very hard to reach. So they are telling people like us forget about your CPF monies. Unless you die than you can cash them out. Sometimes i just wonder are we just a slave.

[Dumb]

  On 5/31/2012 at 1:09 AM, Mustank said:

Bro, i don tundertsand.

 

i thot if i got hdb or property under my name, and the value of the hdb is more than the mim sum, then i am not affected?

 

So daft votes pay and pay?

[Evillusion]

  On 5/31/2012 at 1:12 AM, MkMan said:

basically they are telling us that forget about cashing out your CPF money. Give it all to them. I just wonder how many of us here can really reach that MS. perhaps if you are earning big bucks than perhaps you can reach. But generally for ordinary singaporeans like myself and perhaps majority very hard to reach. So they are telling people like us forget about your CPF monies. Unless you die than you can cash them out. Sometimes i just wonder are we just a slave.

if u base ur salary against the MIW salary of course can...but then we dont wear white to work! i oni wear white when i went to school 25 yrs ago!

 

[Tigerwoods]

  On 5/31/2012 at 1:05 AM, Poper said:

Vote MIW out of a few GRCs in 2016 and we should see CPF policy changes..

 

Hope the 60.1% will do the right thing.

Inflation in SG is quote funny. Our currency has been stronger than say 3 years ago against other currencies, yet we are paying a higher price to get goods and services that are all imported. Why ?

 

Did your salary increase so much that added weightage to the inflation ? NO or at most lower than the inflation rate.

What did ?

[QQDreamer]

  On 5/31/2012 at 2:06 AM, Tigerwoods said:

Inflation in SG is quote funny. Our currency has been stronger than say 3 years ago against other currencies, yet we are paying a higher price to get goods and services that are all imported. Why ?

 

Did your salary increase so much that added weightage to the inflation ? NO or at most lower than the inflation rate.

What did ?

 

i agree with this. our currency is stronger now. yet when we buy imported good we pay alot. I really do not understand.

[Tigerwoods]

  On 5/31/2012 at 2:12 AM, MkMan said:

i agree with this. our currency is stronger now. yet when we buy imported good we pay alot. I really do not understand.

Unless the prices of goods imported rise above the strength of SG $

 

[Solar]

  On 5/31/2012 at 12:17 AM, Picnic06 said:

.....

 

If he is really sincere of fighting inflation, help us by lowering our basic needs like housing, medical & transport cost. Those starting to work now would never meet their targets if the housing cost keep raising like no body business. Furthermore, by their retirement age, the minimum sum could have rise to $300,000/-... (taking into consideration at the age of 30 yrs old and 25yrs before retirement)

 

No one for sure that the retirement age to withdraw CPF, will not increase from 55 to 60 or more in future...

 

even if one maxes out his cpf contribution, he will not be able to meet the minimum sum in the future..

 

[Meanmachine]

Inflation rate is on the high, how & when we retire is our business, THey want us to keep pumping money into Cpf to ring teh bells louder for them,

 

I do not see the need, besides, all our money are used up in housing purchase, and I do not have much left, let alone contribute to Cpf anymore,

 

SP has nothing to produce in product, goods or sell, all we have are imported goods, so damn high prices, our peoples are suffering due to Gahmen promoting themself 1st, serve them 1st and squeeze us high & dry.

 

What is left is only dry sugar-cane juice, or only husk.

 

Contribute wad ?

[Maxus-MIFA9]

  On 5/31/2012 at 1:09 AM, Mustank said:

Bro, i don tundertsand.

 

i thot if i got hdb or property under my name, and the value of the hdb is more than the mim sum, then i am not affected?

 

Yes, can use the house as part of minimum sum but as every year 'ms' increases, more $$$ in hdb will be freezed and at the end when you reach 55 (or even to 60 or 60+), your available cash-in-hand is only a few thousands...

 

Furthermore, you will receive the monthly payment from your cpf account from 65yrs and this could well also be increased to 70. Nobody knows what they had in mind.

 

So now you are not affected but when years to come, policies changes and ask yourself, how many years from now till you reaching 55 (if it stays at 55)...

 

I could says that I am not affected cos, 24yrs ago, I bought my hdb at $103,000/- (fully paid) and if I sell, could fetch a good sum for retirement. I am more worried for my 2 kids, they have another 33 years to reach that age and if they are to buy a hdb house now, it could easily be around >$450,000k.

 

Then my retirement sum had to be folk out to help them settle at least 50% of the purchase price and they had to struggle with >$200,000k.

 

And if that happen, where is my cash-in-hand when I reach 55yrs ....

[Tigerwoods]

  On 5/31/2012 at 2:25 AM, Solar said:

even if one maxes out his cpf contribution, he will not be able to meet the minimum sum in the future..

Basically they are trying to shift your focus away from the Nest egg in CPF and focus on squeezing the dough from your house.

The money in CPF is paid from their pockets.

The money from the sale of your HDB is paid from some goondu.

You have to continue "downgrade" from 5 to 4 to 3 to rental and finally to coffin.

 

[Wyfitms]

  On 5/31/2012 at 3:40 AM, Tigerwoods said:

Basically they are trying to shift your focus away from the Nest egg in CPF and focus on squeezing the dough from your house.

The money in CPF is paid from their pockets.

The money from the sale of your HDB is paid from some goondu.

You have to continue "downgrade" from 5 to 4 to 3 to rental and finally to coffin.

 

might as well cut the pain short and downgrade to coffin now.

[Kiadaw]

Seem like Government is forcing the hand leh. I have no CPF contribution for a while liao, at this rate, the money lock inside will be....lock.

 

At this rate, to say goodbye & cash out maybe better....

[Tigerwoods]

  On 5/31/2012 at 6:01 AM, Wyfitms said:

might as well cut the pain short and downgrade to coffin now.

I think we are heading towards this type of society :