Recently, wherever I go, be it at coffee shop or at client’s meeting, everybody is talking about Medishield Life change and CPF the hot potato issue. However, what appears to me is that most of the arguments, accusation, conspiracy theories are based on incorrect or incomplete information. This is not surprising as I have highlighted in my previous article.
The issue here is the lack of public education. CPF schemes have gone through so many changes and become so complicated. I hardly meet anyone who understands the system and have the up to date information.
On the other side, there is no incentive for so called “experts” or “advisers” to educate their clients because most are just interested in using CPF to sell an investment or insurance plan.
After my post, I am glad to see government has realized the importance to “Putting a ‘human face to the message’” and “promised that the outreach will go beyond merely explaining the technical nuts and bolts of the system, which may be difficult and off-putting for some.”
Lately, Sunday Times Invest has started running a series on retirement planning. I wish the main stream media can really speed up the financial literacy campaign because a lot of times, people just realize what they do not know too late. Today, I will give you an example, or a shocking reality to many.
Many of you can only withdraw $5,000 from your CPF when you are at age 55!
Yes, that is right. Many people will only receive $5,000. And many retirees-to-be will be caught in this. Thinking of retiring at age 55? Think again.
How come? Most people have somewhat heard about CPF Minimum Sum, which was set up to provide members with a monthly income to support a modest standard of living during retirement. Medisave Minimum Sum is the amount a member needs to retain in his Medisave Account whenever he withdraws his CPF savings.
Under the current CPF regulation, upon reaching 55 years old, you will be able to withdraw the remaining savings in your CPF account after setting aside the CPF Minimum Sum and the latest Medisave Minimum Sum. As now, the CPF minimum sum is $155,000 and Medisave Minium Sum is $43,500.