Singapore Profit

There are some changes made to the Central Provident Fund. The advantage is the 1% extra in interest for the first $60000. $20000 comes from the ordinary account. For young Singaporeans, we have to wait until we are 65 years old to be eligible to withdraw the Minimum Sum.

While the reasons for increasing the Minimum Sum are sound, we should remake our plans for the future. Currently, my endowments payments and my CPF withdrawals are timed in such a way that I would be getting a neat sum of money every few years. With the change in the minimum age, I would require another sum of money of money to come in when I am around 62 and before I reach 65. The SRS will come in useful as you can withdraw money from it over a span of ten years, lasting me until 72.

The Minimum Sum is currently set to increase to $120000, and that is before inflation is taken into account. If we fail to meet the Minimum Sum, that means we can only take out $5000 from our CPF. According to the CPF website, there are three ways to invest this sum. First, we can buy annuities with a participating insurance company. Second we can take the money out and put at a participating bank. Third, we can leave it with CPF and get it after we turn 65.

You may apply for exemption from the Minimum Sum Scheme if you have bought your own life annuity using cash. The monthly payment you receive from the life annuity should be equal or above the Minimum Sum monthly payment.

This is something you can consider by buying your own life annuity.

According to the government, quite a significant number of people live beyond 85 years. The government would look into getting the people buy compulsory annuities. This money would be paid out. Depending on this is not enough for most of us, since with inflation, the amount of money we require post-retirement is even more than now.

Since the boundary for to get our money is constantly being pushed back, we need to have more sources of income. Apart from savings, endowment plans, insurance and other investments are necessary, because we will never know when the government will change the ruling (again). It is wise to receive the money in stages, so that we do not have to worry about running out of money after a certain age. I’ve once read that this lady will have policies maturing every few years all the way until she is 85 years old. That’s some food for thought.
 

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