The current state of retirement savings is indeed not overly rosy ("Retirement savings: PM's account not overly rosy" by Ms Chong Wan Yieng, Press Secretary to the Minister for Manpower; Aug 21).
A lot of money has been diverted from Central Provident Fund savings for various purposes, particularly to service mortgages.
Last year, only half of CPF members turning 55 met the Minimum Sum. This included 15 per cent of members who pledged their properties to meet part of it ("Time to relook private pension plans"; Aug 26). This group will likely have insufficient retirement savings, and receive significantly lower CPF Life payouts.
Perhaps the CPF Board could reveal data on the CPF monies used for property purchases by members who reached the age of 55.
It would not be surprising to find more than half the funds locked up in property, leaving little in their Retirement Accounts.
This data will be useful to policymakers when making decisions on whether to rein in CPF use for non-retirement purposes.
Efforts should not be spared to find out why so much CPF money is tied up in property.
Have CPF members over-committed themselves to property purchases? Or did the policy of allowing citizens only a "single bite of the cherry" in terms of CPF housing subsidies and grants induce people to take as big a bite as possible?
CPF members should exercise prudence in their property purchases as overspending will reduce their retirement savings.
The CPF Board should also tighten withdrawal rules to ensure retirement savings are not depleted.
Thiew Ming Tuck
This article was published on Sept 4 in The Straits Times.
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