SINGAPORE - Singaporeans who turn 55 between July 1 this year and June 30 next year will have to set aside more retirement savings in their Central Provident Fund (CPF).
The Minimum Sum will be raised to $155,000 for them, up from $148,000 for those turning 55 between July 1 last year and June 30 this year.
The amount will be set aside in their Retirement Account using savings first from their Special, and then Ordinary Accounts.
"In order to maintain its real value over time, the Minimum Sum increases to account for inflation," the CPF Board and Manpower Ministry (MOM) said in a joint statement on Thursday.
The government agencies added that to cater to Singaporeans' rising expectations of what is considered a basic standard of living in retirement, the CPF Minimum Sum has been increasing for each group of members turning 55 yearly to reach a target of $120,000 in 2003 dollar terms by 2015.
A CPF spokesman told The Straits Times that the $155,000 Minimum Sum 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.
CPF Board and MOM also announced that from July 1, the Medisave Minimum Sum will be raised to $43,500 from $40,500.
The Medisave Minimum Sum is the amount that a CPF member needs to set aside in his Medisave Account for his own and his dependents' healthcare expenses, as well as MediShield and ElderShield premiums during old age.
A CPF member will need to have this amount in his Medisave Account and also meet the CPF Minimum Sum before excess funds can be withdrawn.
The Medisave Contribution Ceiling will also be increased correspondingly to $48,500 from $45,500.
This is the maximum balance that a member can have in his Medisave Account.
"With Singaporeans living longer and the availability of better quality of medical treatment, Singaporeans will need to save more in their Medisave Accounts to help pay for their healthcare expenses," the statement said.
"In addition, as Medisave is opened up to more uses, regular Medisave Minimum Sum adjustments are necessary to help Singaporeans better prepare for their long-term healthcare needs."
For more information, please visit www.cpf.gov.sg or call the CPF Call Centre at 1800-227-1188.