(UPDATED: 31 May, 11am, corrected factual inaccuracies)
Central Provident Fund (CPF) members who turn 55 between this July and June next year will have to set aside the minimum sum of $139,000, the Ministry of Manpower (MOM) said.
The new minimum sum is up 6 per cent from $131,000 last year.
According to MOM, the amount has been adjusted over the years to account for inflation, longer life expectancies and Singaporeans’ rising expectations of their quality of life post-retirement.
The government has explained that the CPF minimum sum scheme provides members with a monthly income to support a modest standard of living during retirement.
Since 2004, the CPF minimum sum has been increased by $4,000 each year to reach $120,000 in 2013, as recommended by the Economic Review Committee in 2003.
MOM also announced that from the start of July this year, the Medisave minimum sum (MMS) will be raised to $38,500 from $36,000 -- an increase of 7 per cent.
Members will be able to withdraw their Medisave savings in excess of the MMS at or after they turn 55.
The MMS is the amount that a person turning 55 would have to set aside for his hospitalisation expenses in subsidised Class B2 and C wards, subsidised outpatient treatment for selected chronic conditions and basic MediShield and Eldershield premiums in his old age.
In addition, the maximum balance a member may have in his Medisave account -- otherwise known as the Medisave Contribution Ceiling (MCC) -- is set at $5,000 above MMS and this will be increased correspondingly to $43,500 from $41,000.
Any Medisave contribution in excess of the prevailing MCC will be transferred to the member’s Special Account if he is below the age of 55 or to his Retirement Account if he is 55 or above and has a minimum sum shortfall.
MOM said that regular MMS adjustments are necessary to help Singaporeans plan for their long-term healthcare needs.