This trend, Singapore's Minister for Manpower believes, is attributed to factors such as income growth, increased labour force participation, and improvements to the Central Provident Fund (CPF) system.
In addition to responding to Nominated Member of Parliament (NMP) Abdul Samad's parliamentary questions on re-employment, Singapore's Minister for Manpower, Dr Tan See Leng, on 12 January 2022 (Wednesday), replied to NMP Hazel Poa's question on Central Provident Funds (CPF) payouts, a form of retirement savings.
NMP Hazel had asked Minister Tan about the number of Singapore citizens drawing a monthly CPF payout of:
- Below S$500;
- S$500 to under S$1,000;
- S$1,000 to under S$1,500;
- S$1,500 to under S$2,000, and
- S$2,000 and above respectively.
And, on top of that, about the projected number of Singapore citizens in 10 years’ time drawing a monthly CPF payout of the aforementioned range, and $3,000 and above, respectively.
In response, Minister Tan shared that the monthly CPF payouts that Singapore citizens are receiving "have been increasing over generations" due to factors such as income growth, increased labour force participation, and improvements to the CPF system.
"Older cohorts also tend to have lower monthly CPF payouts due to more liberal withdrawal rules at age 55," he noted.
Minister Tan further explained that older cohorts who withdrew 50% of their ordinary and special accounts (OSA) savings from age 55 would see their payouts reduce by around half. About 25% of those aged 89 and above—which are those who could withdraw 50% of their OSA savings upon turning age 55—and receiving CPF payouts in 2020, had monthly payouts above S$500.
This increased payouts across cohorts to about 40% for those aged 67 to 88, and to about 60% for those aged 65 to 66, which are those who could withdraw 30-40% of their OSA savings upon turning age 55.
With regard to the projection NMP Hazel asked for, Minister Tan acknowledged that "it is difficult to project" CPF monthly payouts with "meaningful accuracy" as members’ CPF balances could change significantly during the period due to multiple reasons, such as contributions from employment income or voluntary top-ups.
However, the Minister shared that there can be an indication by looking at the CPF balances of the cohort that turned 55 in 2020, and their estimated CPF payouts when they reach age 65.
"About 66% of active members would have accumulated sufficient CPF savings by 55 to set aside their cohort’s basic retirement sum, and can receive at least around S$800 in monthly payouts for life," Minister Tan said.
"Of these, about seven in 10 can expect to receive around S$1,600 in monthly payouts, as they would have been able to set aside their cohort’s full retirement sum. In addition, about 10% are expected to accrue additional contributions through employment to also receive at least around S$800 in monthly payouts by age 65."
As for the other members who are likely to have had low total lifetime CPF contributions, Minister Tan highlighted that they could be eligible for the silver support scheme—which covers a third of all seniors aged 65 and above by providing quarterly cash supplements of up to S$900 in addition to their CPF payouts and other forms of government support—if they do not have significant means to provide for their retirement.
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