Singaporeans who turn 55 between July 1 this year and June 30 next year will have to set aside more retirement savings under the Central Provident Fund (CPF).
For these CPF members, the Minimum Sum will be raised to $155,000 - up from $148,000 for those who turned or will turn 55 between July 1 last year and June 30 this year.
The amount will be set aside in the Retirement Account, using savings from first the Special Account and then the Ordinary Account.
"In order to maintain its real value over time, the Minimum Sum increases to account for inflation," the CPF Board and the Ministry of Manpower (MOM) said in a joint statement yesterday.
To cater to rising expectations of what is considered a basic standard of living in retirement, the CPF Minimum Sum has been on the rise for each group of members turning 55 yearly. The target is to reach $120,000 in 2003 dollar terms by next year. A CPF spokesman said $155,000 is equivalent to $117,500 in 2003 dollar terms.
The Minimum Sum provides CPF members with monthly payouts once they reach their draw-down age.
The CPF Board and MOM also announced that, from July 1, the Medisave Minimum Sum will be raised to $43,500 from $40,500.
Members must set that sum aside in their Medisave Accounts for their health-care expenses and those of their dependants, as well as MediShield and ElderShield premiums during old age.
Before members can withdraw excess funds, they must have this amount in their Medisave Accounts and also meet the CPF Minimum Sum.
The Medisave Contribution Ceiling will be increased accordingly to $48,500 from $45,500. That is the maximum balance that members can have in their Medisave Accounts.
"With Singaporeans living longer and the availability of better-quality medical treatment, Singaporeans will need to save more in their Medisave Accounts to help pay for their health-care expenses," the statement said.
"In addition, as Medisave is opened up to more uses, regular Medisave Minimum Sum adjustments will be necessary to help Singaporeans better prepare for their long-term health-care needs."
For more information, visit www.cpf.gov.sg or call the CPF Call Centre on 1800-227-1188.
This article by The Straits Times was published in MyPaper, a free, bilingual newspaper published by Singapore Press Holdings.Get a copy of The Straits Times or go to straitstimes.com for more stories.