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Is CPF Savings Enough for Retirement

Friday, 25 January 2008 08:00 Ginny Lim
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Do you have any other savings besides your CPF? Are they enough? A lot of Singaporean thought that CPF savings is enough to see them through retirement, including one of my family member.

The real fact is, CPF is not enough for your retirement expenditure! It may provide about 25% of the retirement needs. And much less if you are using your CPF for housing loan and children education loan! So, start a good savings habit by investing regularly a fixed sum of money. You will be pleasantly surprised that a $200 savings per month at age 23 will yield about $0.5million when you turn 60 years old, assuming the rate of returns of 8% per annum.

 

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Bankruptcy May Now Be Prevented

With effect from 18th May 2009, if you are in debt of less than $100,000, bankruptcy may be avoided if Insolvency and Public Trustee’s Office (IPTO) approved your repayment plan over the next 3-5 years. Statistically, about 42% of the bankrupts declared each year owes less than $100,000. So with an average of 3,200 bankrupts per year, 1,300 of debtors will be considered for the new Debt Repayment Scheme (DRS) administered by IPTO.

This is good news for Singaporeans amid the current recession. DRS benefits both the debtors and creditors in its own ways. Debtors will be able to avoid the stigma of bankruptcy and continue his work without the disruption brought about by the bankruptcy act, as long as he is able to fulfil the repayment plan. Creditors will also get his debts repaid from the debtors, albeit over a longer period of time.

The debtors must cooperate with the Official Assignee (OA) of IPTO in the administration of the plan. The debtor can make his payment at any SingPost branch or SAM machine, which is being monitored by OA. Dishonesty, failure to cooperate with the OA or comply with the terms of the plan may result in the OA issuing a Certificate of Failure on the debtor in the DRS. Creditors may then proceed to initiate fresh bankruptcy proceedings against the debtor. OA will issue you the Letter of Completion if you complete all repayment in accordance of the approved DRS plan. And you are now out of debt without being made a bankrupt!