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As announced by Prime Minister Goh Chok Tong at the National Day Rally in August 2003, the CPF Minimum Sum will be raised gradually from the current $80,000 to $120,000 (in 2003 dollars). This increase will be spread out over 10 years, from 2004 to 2013, to give Singaporeans time to adjust. The increase in Minimum Sum is to ensure that Singaporeans set aside sufficient savings for their retirement.
From 1 July 2004, the Minimum Sum will be increased to $84,500, after adjusting for inflation. This Minimum Sum will apply to CPF members who turn 55 from 1 July 2004 to 30 June 2005. CPF members who set aside the Minimum Sum fully in cash will receive a monthly payout of $668 from age 62 for about 20 years.
The CPF Board will continue to announce the new Minimum Sum applicable before 1 July every year.
With effect from 1 July 2004, the Medisave Minimum Sum will be raised from $25,000 to $25,500. The Medisave contribution ceiling will also be increased from $30,000 to $30,500.
The adjustments are made to ensure Singaporeans have sufficient savings to meet their hospitalisation expenses.
When members qualify for CPF withdrawal, their existing Medisave balance will remain in their Medisave account if it is less than the Medisave Minimum Sum. If their Medisave balance exceeds the Medisave Minimum Sum, they will be able to withdraw the difference in cash at the time of withdrawal.
The contribution ceiling allows any Medisave contribution above the ceiling to overflow to the CPF Ordinary Account. This is to give members the flexibility to use their savings for housing, investment, education or insurance. |