CPF members who turn 55 between 1 July 2012 and 30 June 2013 will need to set aside a Minimum Sum (MS) of $139,000. This works out to be a 6.1% increase from the previous Minimum Sum of $131,000.
The MS has been adjusted over the years to account for inflation, longer life expectancies and Singaporeans’ rising expectations of their quality of life post-retirement.
In 2004, there was a target set for the MS to be increased from $80,000 to $120,000 in the year 2013 ($4000 each year) as recommended by the Economic Review Committee in 2003. As the actual increases in MS are also adjusted for inflation each year, the adjustment each year will be more than $4000.
Based on 2011 inflation and incorporating the annual $4,000 adjustment, the increase in MS due this year would have been $12,000, which is relatively large compared to previous years. In response to concerns over large increases in MS in any given year, CPF will spread out the remaining MS increases needed to reach the $120,000 target over a longer period of four years. This means the target will be reached in 2015 instead of 2013.
Also, from 1st July 2012,
- The Medisave Minimum Sum (MMS) will be raised to $38,500 from $36,000, a 7% increase. The MMS is the amount that a person turning 55 needs to set aside for his hospitalisation expenses. Members will be able to withdraw their Medisave savings in excess of the MMS at or after age 55.
- The maximum balance a member may have in his Medisave Account, known as the Medisave Contribution Ceiling (MCC) will also be increased to $43,500, from $41,000.