Impact of Rising Healthcare and Daily Living Costs on Retirement Adequacy
Ministry of ManpowerSpeakers
Summary
This question concerns Mr Saktiandi Supaat’s inquiry regarding the impact of rising costs on retirement adequacy and potential refinements to CPF withdrawals or the Silver Support Scheme. Minister for Manpower Dr Tan See Leng explained that the Government reviews the Basic Retirement Sum and uses CPF LIFE to manage longevity risks while balancing withdrawal flexibility against retirement income. To support seniors, the Government introduced the Majulah Package and enhanced the Silver Support Scheme with a 20% increase in quarterly payments in 2024. Other support measures include the Workfare Income Supplement, Matched Retirement Savings Scheme, and targeted MediSave bonuses for those with lower savings. Finally, cost-of-living pressures are mitigated through the Assurance Package and Goods and Services Tax Voucher schemes to ensure long-term retirement security.
Transcript
55 Mr Saktiandi Supaat asked the Minister for Manpower (a) whether the Ministry has assessed the impact of rising healthcare and daily living costs on retirement adequacy recently; and (b) what further policy refinements can be made to CPF withdrawals or the Silver Support Scheme to help older Singaporeans cope.
Dr Tan See Leng: The Government recognises and understands Singaporeans' concerns over rising costs and their impact on retirement adequacy. We have been strengthening the Central Provident Fund (CPF) system so that those who work and contribute consistently to their CPF will be assured of meeting their basic needs in old age. This includes reviewing how the Basic Retirement Sum for future cohorts should grow and providing lifelong monthly payouts through CPF LIFE to protect against longevity risks.
With regard to CPF withdrawals, we need to strike a fine balance between members' immediate needs and ensuring sufficient retirement income in their later years. The current withdrawal rules are designed with this in mind, as increasing withdrawal flexibilities comes with the trade-off of lower monthly payouts in retirement.
At the same time, we have and will continue to provide support for those who may not be able to set aside enough despite their best efforts.
We introduced the Majulah Package in 2024 to boost retirement and healthcare adequacy of our "Young Seniors" and older cohorts. Eligible seniors with lower MediSave savings also received a MediSave bonus this year.
We also support seniors' retirement adequacy through schemes, like the Workfare Income Supplement Scheme, the Matched Retirement Savings Scheme and the Silver Support Scheme. We enhanced Silver Support this year, increasing quarterly payments by 20% to keep pace with inflation. We will continue to review Silver Support periodically so that it targets seniors who need it most.
On top of these moves, the Government has provided additional support to help Singaporeans, including seniors, cope with cost-of-living concerns. This includes the Assurance Package and Goods and Services Tax Voucher schemes.