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Why Will The CPF Minimum Sum Keep Increasing – Financial Planning Point Of View

There was quite a bit of hu-has on my Facebook’s news feed with lots of unhappiness that the CPF’s Minimum Sum has increased from $123,000 to $131,000 and that many more people will not be able to take their hard-earned money out from their CPF accounts and these money will eventually be “taken away” from them

Be assured that the “taken away” part will not be the case as I have seen many of my clients who have reached their draw-down age, did not reach the Minimum Sum and are still able to take out their money.

I will not be dedicating this post to how you will be drawing your CPF money when you reach the draw-down age or explain what you need to do if you are unable to reach the Minimum Sum. But rather, I will explain the rationale behind the annual increment of the Minimum Sum from the Financial Planning Point of View.

Proper Planning For Retirement – The Concept Behind The Minimum Sum

If you are truly concerned about planning for your Retirement, a Financial Advisor would usually sit down with you and work out the numbers. For instance, to plan for your Retirement, you would need to know a few numbers like

  • How much you would like to have and to spend each month and in today’s dollar
  • How long you would like to have these sum of money
  • What is your feel for the average rate of inflation

An Example To Illustrate The Above

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