cpf minimum sum

From Jul 1 2014, CPF min. sum is now revised to $155,000.

Min. sum is in existance to allow members who had fulfilled this criteria when they are in retirement age (55 yrs old?) to have a monthly draw down annuity @ $1.2K per month.

Hmm, let's track back for a moment. Assuming one can contribute 1K per month into CPF, in a year one would accumulate $12K. After 10 years of contribution, there will be at about $125K. At this juncture, let's say that person buys a house. Most of that money will be used for housing with little left.

Assuming new 4-room flat @ $260K after grants.  So each partner forks out $130K for this. Let's say wipe the CPF savings out, and the other partner does not have so much and has probably $80K. Balance of 55K to pay.

Restart the CPF contribution and continue to contribute 1K per month. Assuming min. sum continues to revise upwards to beat inflation, the sum might be $215K in 2029. So, 1K per month x 13 x 15 yrs = $195K + interest etc ~ probably $221K.

Looks possible.

Track back a little. To contribute 1K per month, means monthly salary need to be about $4K min, which will nett about $1400 in contribution and about $1250 into OA and SR.

If one can get a starting salary of say, $3500 then CPF contribution shall be about 33K for the first 2 years.
Then, get promoted/pay increment or change job to get $4200, and CPF contribution shall be about $40K for the next 2 years. By the 5th year, should be quite comfy with $5000. The other assumption is that one is getting their 13-month.

With these assumptions, one seem to be able to afford a HDB flat after working for 6 to 7 years. Then, just need to make sure that the monthly salary does not drop below $5K (and continue toget 13-month) and to continue working for the next 15 years.

Looks like I didn't do all these calculations when I started working, so I can see where it went wrong:

1. Starting pay below $2K for a year
2. Average pay of $2.5K for 2 years
3. CPF contribution started later and smaller sum (non-citizen)
4. Stayed for 10 years in a company that did not practise 13-month and no structured pay increment, and max bonus of 1 month at best

Guess either I was stupid, lazy, too comfy etc, or seriously naive.

For people who has just started your careers, you still have a chance to be on track. Just make sure that your salary increases by 15% to 20% once every 2 years, and company pays 13-month and bonuses.

Lesson in life.