The netizen comments that the life of the CPF “has a major flaw, because the payment is fixed by default despite inflation”

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A netizen took to social media saying he thought CPF Life was a good plan, except it had one flaw: the payout is set by default despite inflation.

The netizen, who goes by the name of Wong Boon Hong on social media, wrote, “It means for those who live longer, they will start to notice that their allowance is decreasing every year due to inflation.”

“Even for those following the more realistic escalation plan of 2% per year, it may not catch up when inflation is high,” Wong added. He also said the graduated plan puts people unable to live beyond 90 at a disadvantage, as their starting allowance is much lower than the fixed allowance. The benefit for those on the progressive plan only increases after age 85.

Mr. Wong believed that “the root cause of our asset-rich but cash-poor situation is primarily due to our unsustainable and flawed housing policies, where our retirement funds are compromised for our housing needs, which have been disrupted. as an investment instead”. He shared that he thinks high inflation doesn’t impact young workers as much as it does older ones because wages will catch up with them and they’ll still have many years to save.

He added: “But for seniors, they no longer have enough years to catch up, as they see their years of savings and retirement funds shrink every year.

Worse for those who have retired and no longer have any income to catch up”.

Alongside his comments, Mr Wong shared an image of the following article from the Straits Times: “Rising food and energy prices push S’pore core inflation to record high level for 13 years”.

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