Are interest rates of the CPF accounts sustainable? – Reader’s input

I haven’t been doing a blog entry about the CPF system for some time and thought that it would be a good time to add one now. I have received a comment previously from a reader who invoked an inspiration for this blog entry (thanks Wabi, whoever you are!). He has asked a question on whether the interest rates for the individual accounts for OA, MA and SA would be sustainable.

Hmm, sustainable… Maybe the first question we can ask ourselves would be how sustainability can be defined for the CPF system. For the sake of this article, I assume that the CPF system would be considered sustainable if we can obtain full financial reliance on it while serving its purpose, e.g. at retirement.

Let’s go back to the purpose of CPF according to the CPF website:

  1. Retirement savings to meet your basic living expenses in old age
  2. A property that is fully paid-up when you retire
  3. Sufficient savings for future medical expenses as you grow older

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