Making sense of the Central Provident Fund (CPF) scheme and its numerous updates and enhancements is not always easy. At the National University of Singapore (NUS) Greater Good Forum titled Managing CPF money for your retirement, Ms Peggy Chan from the Institute for Financial Literacy broke it down for the audience.
“The three most important things to know about. How does CPF prepare you for retirement? There is no one retirement sum. Your payout can last as long as you do,” Ms Chan said.
With eight years of experience in the financial services industry, Ms Chan brought the audience up to date on the types of accounts in the CPF today, the contribution rates, the account ceilings, and the payout rates of different types of annuity plans.
The Retirement Sum scheme allows Singaporeans to build a retirement income. When you turn 55, the ordinary account and the special account will be combined as a retirement account, which converts a lump sum of the CPF money to a monthly income to support a basic standard of living during retirement for about 20 years.
There are several options to consider: Basic Retirement Sum, Full Retirement Sum and Enhanced Retirement Sum. Each option has different estimated monthly payouts depending on your retirement needs as well as the size of the bequest you wish to leave behind. Payouts can also last for as long as you live, if you choose a CPF Life Plan.
Ms Chan reminded the audience of the importance of making a CPF nomination in order for CPF monies to be distributed accordingly. Otherwise, intestacy laws will take over.
“Nominate a person or an entity so that the money can be distributed as intended. To help loved ones, you can also make contributions to their accounts, so they can also be taken care of in old age,” she explains.
The NUS Greater Good Series and Forums are a series of intimate dialogue sessions and workshops that allow the audience to connect with the speaker on topics related to philanthropy as well as issues that impact community and society. For further information on the NUS Greater Good Series and Forums, contact the Events team at firstname.lastname@example.org.