CPF for retirement?

Relying solely on CPF for retirement? Do you think it is sufficient?

Most Singaporeans are aware that the Government has planned for their retirement through the CPF scheme. But I personally do not think CPF is sufficient if I rely solely on the compulsory 20% CPF contributions each month, even if I work from age 21 to age 62.

From the CPF Trends Report, the minimum sum (MS) expected is always on the rise. With alot of us using majority of our CPF Ordinary Account(OA) to pay for our houses, it will be difficult for us to hit the MS in future. I foresee without proper investments or planning, alot of us will not have any money withdrawn out at age 55 as we may not have enough to meet the MS at all.

In 2008, about 66.2% of Singaporeans aged 55 do not have MS. More than 2/3 of Singaporeans above 55 will not be able to retire.

In June 2009, CPF Trend reports that only one third (33.8%) of Singaporeans aged 55 met the MS requirement of $106k. According to CPF Life, with MS in 2023, one can expect $570-$620/mth on a Life balanced Plan. With inflation, this sum gets even smaller. And $600 has to cover food, medical, expenses bills (e.g hp), property tax, transport and more.

In 2010, CPF Trends shows only 40.7% of Singaporeans met the required MS, though increasing but still not enough awareness.

In Feb 2011, the MS has been increased to $123,000.

So we should start planning early for our own retirement. Take up savings or investments plans with insurance companies, on top of CPF, for retirement. I personally got mine from AIA, as they are among the best performers for returns last year. I never put my savings in bank or fixed deposits as I know the low interest rate they provide me cant even meet the inflation rate. So save and invest your money wisely.

I hope in few years to come, more Singaporeans will be educated in this importance and more will be able to meet MS. As MS only offers us the most basic monthly amount for retirement, you will need much more to have a more comfortable retirement.