Amid rising life expectancy of Singaporeans, Singapore should consider raising the age of CPF withdrawal to meet future retirement needs, according to Taimur Baig, DBS Bank group research chief economist.
In an interview with the Business Times, Mr Baig said:
“Pension reform is a lively topic in Singapore, and the government is keen to improve the sustainability and adequacy of the CPF. Raising the age of first withdrawal from CPF is not a particularly radical concept, and can certainly be considered.”
He added that in many countries around the world, as life expectancy has risen, so has the age of pension.
“The US, for example, has a lower life expectancy than Singapore, but a higher full benefit age (65) for social security,” he added.
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Singapore’s retirement income system is based mainly on the Central Provident Fund which covers all employed Singaporean residents and permanent residents (PRs).
According to the World Health Organization, Singapore’s life expectancy is 83.1 years, after Japan at 83.7 years, and Switzerland 83.4.
The CPF withdrawal age is currently55 years old. Singaporeans who reach 55 years old this year can withdraw $5,000 plus an amount excess of the Minimum Sum of $171,000 from their CPF accounts.