CPF minimum sum : adequate and achievable?

• Main Authors: Li, Yun Fan., Soh, Kok Yong., Ni, Hao Ming.
• Other Authors: Leon Chuen Hwa
• Format: Final Year Project
• Language: English
• Published: 2013
• Subjects: DRNTU::Business::General::Economic and business aspects
• Online Access: http://hdl.handle.net/10356/51371
• Institution: Nanyang Technological University

Prior studies on CPF focus on its adequacy in replacing the income and maintaining equivalent standards of living before and after retirement. Few researches have focused on the particular aspect of CPF Minimum Sum, the amount required to meet basic needs after retirement This study examines: (1) whether the current CPF Minimum Sum is adequate to provide the basic needs of Singaporeans after retirement, and (2) whether the CPF Minimum Sum can be achieved by Singaporeans who are entering or have just entered the workforce. The study finds that the current Minimum Sum is adequate to meet the basic needs after retirement, as this sum is almost equal to the expenditure needed for basic living standards. An average1 Singaporean who has just entered the workforce is not only able to achieve the Minimum Sum, but also accumulate surplus in his account at retirement. In comparison, the lower income2 will not be able to achieve the Minimum Sum due to lower monthly CPF contribution. The authority should therefore consider strategies to assist the lower income Singaporeans in meeting their CPF Minimum Sum. The study concludes that an increasing number of Singaporeans will be able to meet their CPF Minimum Sum. This is due to the higher educational profile of younger Singaporean, who is likely to command a better pay. The lower-income group is the most vulnerable, as they are not able to accumulate sufficient amount in their CPF account to achieve the Minimum Sum and in turn unable to meet their basic needs after retirement.