CPF - Minimum Sum 2

I wrote an article about CPF Minimum Sum seven years back.

Well, back then not much people concern about this amount. But it has been a hot issue recent two years. It was projected that the minimum sum will be raised to $120,000 by 2013 based on the inflation rate on 2005. Unfortunately, it is more than what we expected. Thanks to the imported inflation rate, this number will be haunting CPF members in coming future.

The world is not only about the red dot. There are much more greater nation out of this country and the economic uncertainty has already taken place and gave impact to everyone. The government has been trying to control the inflation rate of this country but it is not an easy job and I can say there is not much solution left but to accept.

At this rate, inflation will continues and CPF minimum sum will be adjusted higher than projected. So, what is the catch?

Young professional who stretched too much to buy high priced property with their CPF money will be first affected. You will remember I keep emphasising on the consequences of draining CPF for high priced property. The keyword here is "stretched too much". If you can afford it, you are welcomed to buy. If you catch my post previously, I mentioned before property will be good but only applies to second property.

I mentioned the situation when you don't have sufficient fund for minimum sum in my first post. On top of that, you will need to pledge your property.

Explanation of property pledging for Minimum Sum from CPF website:

You can choose to pledge your property up to 50% of the Minimum Sum. In the event that the property is sold or otherwise disposed of, you are required to refund the Minimum Sum deficiency, or the principal CPF withdrawn for the property plus the accrued interest*, whichever is lower. The Minimum Sum deficiency is the CPF Minimum Sum applicable to you when you reach 55 less the balance in your Retirement Account (excluding the interest earned).

Well, once you pledged your property for minimum sum you are required to refund CPF a certain amount from sales of property including interest. Even if this is really intimating CPF members but the move is really to protect retiree's well-being.

Not to throw wet blanket, but don't really expect to get all your CPF money out before you die. This is really for your own benefit.