CPF savings meant for retirement income

The CPF Board Service Centre in Maxwell Road, on Jan 22, 2019.
The CPF Board Service Centre in Maxwell Road, on Jan 22, 2019.PHOTO: ST FILE

We thank Madam Whing Yeok Leng for her views on deferring Central Provident Fund (CPF) payouts beyond age 70 (Give those turning 70 an option to further defer CPF payouts, March 29).

CPF members can instruct the CPF Board to start their retirement payouts at any time after they reach their payout eligibility age of 65.

From January last year, the CPF Board started automatic payouts for members on the Retirement Sum Scheme when they turned 70 years old.

Since that announcement, the Board has received appeals from some members who, at turning 70, wished to continue retaining their savings in the CPF to enjoy above-market interest rates.

Some of these members have much more than their Full Retirement Sum.

Some flexibility to defer payouts beyond 70 years old is granted on a case-by-case basis to members with lower balances.

This allows them to benefit from higher payouts that last them to a later age.

Fundamentally however, the CPF is designed to provide members an income in retirement, rather than serve as an alternative investment instrument.

Members with higher balances who have no immediate use of their CPF savings even after age 70, or who wish to build up a larger bequest for their nominees, should consider other investment options.

Sim Feng-Ji

Divisional Director

Income Security Policy Division

Ministry of Manpower

A version of this article appeared in the print edition of The Straits Times on April 09, 2019, with the headline 'CPF savings meant for retirement income'. Print Edition | Subscribe