The gap will widen further tomorrow when that sum is raised by $5,000 to $99,600 - which members need to set aside in a retirement account. They can then use this account to get $790 a month from age 62 onwards.

The CPF Board believes that these monthly payments help retirees 'maintain a basic standard of living' during their sunset years.

But currently only about four in 10 active CPF members are able to set aside that sum, either in cash or by pledging property. This is after withdrawing a portion of their CPF balances at 55.

If all CPF members were taken into account, the average minimum sum could be even lower.

This is worrying, especially since the minimum sum constitutes 'the bulk of an average elderly person's savings', said Madam Halimah Yacob, MP and NTUC assistant secretary-general.

'Many of the elderly receive financial assistance from their children and other family members,' she added. 'But the worry is how long this will last, as the average family is now smaller.'

The CPF Board says it will continue to 'encourage and educate members to be prudent with their property purchases and have less medical expenses to help meet their minimum sum'.

Workfare - where the Government tops up the take-home pay of low-wage older workers - was also introduced to be an additional safety net, the board said while revealing to The Straits Times that average balances for CPF members between 50 and 55 stood at $65,800 at the end of last year.

The impending minimum sum increase is in line with a plan announced in August 2003 to increase it to $120,000 by 2013 in order to adjust for inflation.

The CPF issue hit the headlines last week when Mr Lim Boon Heng, the minister in charge of ageing issues, spoke of the possibility of raising the minimum sum draw-down age from 62 to 65.

However, labour economists said that while the board's measures are useful, retirees should not rely on CPF savings alone.

Professor Mukul Asher, from the Lee Kuan Yew School of Public Policy, said there is no evidence to suggest that a CPF-type mandatory savings scheme can by itself 'provide adequate income security in retirement to most of the population'. The focus should be on building a multi-tiered social-safety system, he said.

Professor Chew Soon Beng from Nanyang Technological University, pointed out that in 2005, more than 2,000 CPF members in their early 50s had CPF savings of less than $10,000. That number has since climbed to 2,500. 'The key lies in devising policies that allow the elderly to work as long as their health permits,' he said.

This suggestion is the mantra for low-income workers such as Ms S. Devagi, 50. The cashier, who earns around $800 a month, says she and her husband must keep working for as long as they can to stay financially stable.

This despite her home being fully paid for and, after more than 25 years of work, about $70,000 accumulating in her CPF account.

'It seems a lot now, but if a serious illness hits, the money can disappear really fast,' she said.

radhab@sph.com.sg