When was the last time you heard the terms “1M65” or “1M55” thrown around in retirement planning discussions? Or perhaps, the buzzword “CPF Shielding” used to dominate conversations among friends? Well, it seems like those days are over with the recent announcement of the Special Account closure in Singapore’s Budget 2024.
As you may have heard, significant changes to Singapore’s Central Provident Fund (CPF) system were unveiled during Budget 2024, causing quite a stir. Amidst the complaints, grievances, and misunderstandings flooding internet forums, I’ve decided to write this article.
As a financial professional who specializes in retirement and investment, I hope I can provide clarity on what’s really matters, and how you should approach these changes objectively.
“Return My CPF” Movement – a Bit of History
Having been in the financial industry and writing blogs for quite some time, I understand that things aren’t always as they seem, especially when it comes to money. To comprehend money matters, a bit of historical context is essential.
You might be under the misconception that people were always enthusiastic about topping up their CPF. However, not too long ago, there was considerable discontent surrounding leaving money in the CPF.
CPF underwent a significant change in 2015, replacing the Minimum Sum Scheme with Retirement Sum Scheme. This change sparked the “Return Our CPF” movement in 2016, with people expressing concerns about CPF’s “inflexibility,” “low rate of returns,” and “lack of transparency.” People were protesting to get their money out of the CPF system.
Let me be clear; I understand the good intentions behind the government’s policies, and I support them wholeheartedly. However, I believe clearer communication and better financial education may be needed for such changes.
I believe CPF has learned the lesson and engaged in a huge marketing campaign by leveraging social media and influencers.
