The Central Provident Fund (CPF) Board had announced that the Medisave Required Amount or MRA will be raised from the current $18,000 to $22,500 from January 1 next year.
The MRA scheme was introduced in 2004 for CPF members who turn 55 and are able to meet the CPF minimum sum.
They are required to set aside a required amount in their Medisave account when they make a CPF withdrawal.
If they have less than the required amount in their Medisave, they will have to use the excess amount in their Ordinary and/or Special accounts to top up the difference.
The minimum sum was introduced in 2003 to ensure that Singaporeans have sufficient funds in their CPF to meet their retirement needs.
Before 2003, all CPF members are able to withdraw their entire CPF in one lump sum when they reach 55 years of age.
The minimum sum, which was set at $80,000 in 2003 has been increased to $117,000 this year. Further increases are expected yearly from 2010 till 2013.
This means that a Singaporean needs to have at least $117,000 in his CPF account before he is able to withdraw a single cent when he reaches 62 years of age now (The age for withdrawal is also raised from 55 to 62)
For example, if one has $120,000 in his CPF, he can only withdraw $3,000. The rest of his CPF will be disbursed to him monthly till it runs out.
If the CPF holder dies prematurely, his CPF will be passed on to his children or his nominees.
All Singapore citizens have to contribute 20 per cent of their monthly income to the CPF while their employers will contribute 13.5 per cent.
Besides changes to the MRA, the government will also maintain the 4 per cent floor rate for interest earned on all Special and Medisave Accounts (SMA) monies and Retirement Account (RA) monies for another year until Dec 31, 2010.
Introduced in the 1960s initially as a national pension scheme, many Singaporeans are finding it difficult to rely on their meager CPF savings for retirement.
A large part of their CPFs is tied up with housing loans to finance their HDB flats whose prices have sky-rocketed over the years.
The repeated increases in the CPF minimum sum and the postponement of the withdrawal age by the government is meant to prevent Singaporeans from depleting their CPFs early and thereby end up penniless and dependent on the state for social support when they grow old.
Though Singapore is a first-world developed country, it offers few social welfare benefits for its citizens who are expected to be self-reliant by themselves.
The government insists that providing more welfare and handouts to the people will create a “crutch mentality” thereby retarding the nation’s competitiveness and going down the slippery road of a welfare state as seen in the West.
While Singaporeans are expected to work for as long as they can to support themselves, the wealthy Singapore government is able to splurge billions of dollars in overseas investments through its two sovereign wealth funds Temasek Holdings and GIC.
There is no opposition in parliament to check on the ruling party. Neither is there a free press in Singapore to expose the wrong-doings of the government and to educate citizens on their rights.
The MRA scheme was introduced in 2004 for CPF members who turn 55 and are able to meet the CPF minimum sum.
They are required to set aside a required amount in their Medisave account when they make a CPF withdrawal.
If they have less than the required amount in their Medisave, they will have to use the excess amount in their Ordinary and/or Special accounts to top up the difference.
The minimum sum was introduced in 2003 to ensure that Singaporeans have sufficient funds in their CPF to meet their retirement needs.
Before 2003, all CPF members are able to withdraw their entire CPF in one lump sum when they reach 55 years of age.
The minimum sum, which was set at $80,000 in 2003 has been increased to $117,000 this year. Further increases are expected yearly from 2010 till 2013.
This means that a Singaporean needs to have at least $117,000 in his CPF account before he is able to withdraw a single cent when he reaches 62 years of age now (The age for withdrawal is also raised from 55 to 62)
For example, if one has $120,000 in his CPF, he can only withdraw $3,000. The rest of his CPF will be disbursed to him monthly till it runs out.
If the CPF holder dies prematurely, his CPF will be passed on to his children or his nominees.
All Singapore citizens have to contribute 20 per cent of their monthly income to the CPF while their employers will contribute 13.5 per cent.
Besides changes to the MRA, the government will also maintain the 4 per cent floor rate for interest earned on all Special and Medisave Accounts (SMA) monies and Retirement Account (RA) monies for another year until Dec 31, 2010.
Introduced in the 1960s initially as a national pension scheme, many Singaporeans are finding it difficult to rely on their meager CPF savings for retirement.
A large part of their CPFs is tied up with housing loans to finance their HDB flats whose prices have sky-rocketed over the years.
The repeated increases in the CPF minimum sum and the postponement of the withdrawal age by the government is meant to prevent Singaporeans from depleting their CPFs early and thereby end up penniless and dependent on the state for social support when they grow old.
Though Singapore is a first-world developed country, it offers few social welfare benefits for its citizens who are expected to be self-reliant by themselves.
The government insists that providing more welfare and handouts to the people will create a “crutch mentality” thereby retarding the nation’s competitiveness and going down the slippery road of a welfare state as seen in the West.
While Singaporeans are expected to work for as long as they can to support themselves, the wealthy Singapore government is able to splurge billions of dollars in overseas investments through its two sovereign wealth funds Temasek Holdings and GIC.
There is no opposition in parliament to check on the ruling party. Neither is there a free press in Singapore to expose the wrong-doings of the government and to educate citizens on their rights.
