CPF to launch nationwide project to encourage mature members to think about retirement plans
SINGAPORE – Think beyond short-term gains and losses: This is one of the key messages the Central Provident Fund Board hopes to drive home in its members.
The board wants to encourage them to rethink their retirement plans and improve their financial situation through an islandwide project in the second half of 2024.
The Heartlands Engagement Project’s primary target audience is mature CPF members between the ages of 36 and 54. They would have been in the workforce for a few years, and still have sufficient time to make a significant impact on their retirement planning.
A tender has been called for the project, which is planned to involve a series of activities for about 40,000 CPF members across key heartland districts.
The tender documents state that the objective includes encouraging CPF members to think beyond short-term gains and losses, and focus on the long-term consequences of their decisions so as not to set themselves up for regrets.
The project will also target future and new CPF members aged between 18 and 35 years old, who are forming their first impressions of CPF and how it plays a significant role in their lives.
Mr Aaron Chwee, OCBC’s head of wealth advisory, said CPF is an integral part of financial and retirement planning, and should form part of anyone’s plans when it comes to his retirement.
“It is an important vehicle for Singaporeans to set aside money for their retirement which delivers decent returns, but Singaporeans should also supplement it with other passive income streams for an even more comfortable retirement that they desire,” he said, adding that amid a volatile and uncertain economic landscape, it is important to be well-prepared financially.
The OCBC Financial Wellness Index in 2022 revealed that less than half of Singaporeans are on track for their ideal retirement.
“While Singaporeans have considered the high inflation in 2022 and rising expenses in their estimations, many are still underestimating the costs of their ideal retirement lifestyles,” Mr Chwee said.
“Hence, it is important for Singaporeans to take their first step to financial planning and retirement planning, to know and understand how much they will need in the future, and how they can build up the funds to get there.”
There are signs that Singaporeans are more aware of what CPF can do for them, observers say.
Mr Christopher Tan, chief executive officer of wealth advisory firm Providend, said: “In the past, Singaporeans were always asking how they can withdraw their CPF funds earlier. Today, more and more are asking about whether they can top up more into their CPF accounts and whether they can delay their withdrawals.
“I think that CPF Board is taking advantage of the momentum so far to further help Singaporeans appreciate CPF even better.
“CPF is perhaps the best instrument to fund our essential expenses (in retirement planning), as not only is its interest rate high relative to the risk, the interest rate and capital are guaranteed.”
Mr Tan added: “CPF has always been seen as an ‘unsexy’ instrument to young adults, especially when they are so far away from retirement. It will be good to engage the youth to help them understand how they can use a so-called ‘boring instrument’ like CPF to kick-start their financial and retirement planning journey.”
Commenting on its youth outreach efforts, Ms Joanne Tan, CPF’s director for outreach and partnerships, told The Straits Times: “To the youth, CPF may be a distant topic and financial literacy may not be a top-of-mind issue. As such, the board utilises gamification techniques and experiential learning to introduce financial literacy concepts, making them easier to digest and more engaging to students.”
In April, it launched a digital escape game for youth to educate them on financial literacy. Titled Catching Insomnia, the fantasy-themed game can be played by teams of four to six players, hosted on the metaverse platform Gather.
It encourages active communication and collaboration among players, who have to solve puzzles and escape the rooms as quickly as possible. They have to think out of the box to solve complex challenges, thereby honing their critical thinking ability.
In the process, players learn about CPF and financial literacy concepts focusing on these five key principles: developing good planning and budgeting habits; exercising prudence in spending; leveraging compound interest to grow savings; understanding investment risks; and recognising the importance of being insured.
Since its launch, more than 2,500 young people have played the game, among them NUS High School student Bethany Lew.
The 18-year-old said the game taught her to spend 50 per cent of her future salary on necessities, 20 per cent on future needs, and 30 per cent on wants. She also came across the idea of setting up a joint bank account with her partner to pay for shared bills such as mortgage or groceries.
“I will also avoid going shopping when I’m in a bad mood as it has been shown that doing so will increase the chances of buying unnecessary things,” she said.
There are four game seasons for Catching Insomnia, which runs from April 2023 to early 2025. Interested members of public may register their interest here: https://www.cpf.gov.sg/member/infohub/youth-engagement/catching-insomnia-game.
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