Young workers will have enough CPF for retirement

Young workers will have enough CPF for retirement

Young Singaporeans entering the workforce today will have accumulated enough savings in their Central Provident Fund (CPF) when they retire to see them through their golden years.

This was one of the key findings from a Ministry of Manpower-commissioned study, revealed Deputy Prime Minister Tharman Shanmugaratnam yesterday.

Based on the current CPF system, the study showed that the savings will "provide a comfortable level of income in retirement, a level equal to a large part of their pre-retirement income", he said.

Mr Tharman, who is also Finance Minister, was speaking at the opening of the two-day Singapore Human Capital Summit 2012, held at Resorts World Sentosa.

He said that Singapore has two major priorities when dealing with the challenges of human- capital management today.

These are: To ensure a strong Singapore core at the heart of a globally competitive workforce; and to harness a more mature workforce and ensure that people have enough after retirement.

According to the study, Mr Tharman said the male median earner who enters the workforce today will be able to achieve an Income Replacement Rate (IRR) of 71 per cent through his CPF savings.

Used by economists, the IRR is a ratio of retirement income to pre-retirement earnings.

For a female median earner, the IRR is 63 per cent.

The study estimated IRR using all CPF savings accumulated by a member up to age 65, including savings above the Minimum Sum which can be withdrawn.

The study's results will be released soon.

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