CPF as a source of savings for retirement

Many Singaporeans rely on the Central Provident Fund as their main source of savings for retirement.

In recent years, many found their CPF savings to be inadequate for retirement. In 1999, only one-third of people reaching age 55 had sufficient savings to meet the Minimum Sum of $60,000. The Minimum Sum has since been raised to $99,600 for people who reached age 55 in 2007.

The Minimum Sum is just sufficient to meet the very basic cost of living in Singapore. For a more comfortable standard of living, you need at least two times of this Minimum Sum.

Many people over-invest on a property. They buy the most expensive property that can be financed by their CPF savings and their spare income. It should be avoided

As a rule of thumb, you should buy a property based on five to seven years of your family income.

Do not make excessive withdrawals for your medical expenses or medical insurance premiums. Try to leave the savings in the CPF as it can earn interest at 5% on the Medisave and Special accounts.