In facing death, is retirement savings still important? During the recent Parliament sitting held on 9 May 2016, the Worker’s Party raised the possibility of increasing the $5000 cap on CPF Medical Grounds Scheme due to rising cost of living in Singapore. The Minister of Manpower Lim Swee Say rejected the proposal and claimed that he was “hesitant about introducing such a move”. I was truly disappointed with his response and felt that he totally missed the point.
Withdrawal of CPF based on Medical Grounds
You can apply to withdraw your CPF savings on medical grounds if you
- are suffering from an illness which renders you permanently unfit from ever continuing in any employment; or
- have a severely reduced lifespan; or
- lack capacity within the meaning of Section 4 of the Mental Capacity Act (MCA) and the lack of capacity is likely to be permanent; or
- are terminally ill.
You will be able to withdraw from your Ordinary, Special and Retirement Accounts, the higher of $5000 or savings after setting aside a reduced Retirement Sum in your Retirement Account. Minister Lim clarified in Parliament that the reduced retirement sum has been set at $40,300, which is half of the current basic retirement sum.
Basically, under this CPF rule, even if you have the legitimate medical reasons to withdraw your CPF monies, you still need to set aside a sum of monies for your retirement. Otherwise, you are entitled to withdraw at most $5000 only. Such CPF ruling, in my point of view, is at best illogical and at worst, come across as inhumane and lack of compassion for those suffering from terminal illness.
Just imagine yourself staring at the prospect of dying in the coming months or years. Logically, you will not be thinking of your retirement lifestyle, which you know is unlikely to happen. Obviously, you will feel angry, in denial, fearful of the unknown and finally defeated. After coming to term with reality and accepting the fact that you are dying, it is likely you will start reflecting on how you want to spend the remaining time of your life. Among your last wishes, maybe you would also want to decide how to spend the hard-earned wealth which you have accumulated and toiled for all these years. Instead, you are told that you can withdraw only $5000 or maybe slightly more, depending on your CPF savings. How would you feel?
Dying and money
It is a very depressing and lonely experience to know that your end point is nearing. The prospect of dying and leaving this world can depress even the most positive person on earth. When you are at this stage of your life, basically your outlook in life takes on a whole new meaning. Your desired retirement lifestyle will of course be the least priority at the back of your mind. But if you are terminally ill, you would certainly want to die with dignity and not be a burden to your family members. Essentially, you would want to be empowered to decide how you want to spend your savings. You would also want to have the call on how to distribute your assets among your loved ones.
Our relationship with money is a very strange thing. Sometimes, it can even border on being comical. Just think about this – when you are alive, your mind will likely be pre-occupied with making more money and time is of secondary importance. But when you are dying, the significance of making more money lost its meaning. It is only human for a dying person to fear the unknown and try every possible means to extend their lifespan, even if it is just for a minute or second.
During one of my conversations with my insurance agent, he shared with me that many of his old comrades panicked and sold their cars and right-sized their houses after being diagnosed with terminal illnesses. He is old enough to see through many things in life. He candidly shared with me that when you are facing death, you start to realize the important things in your life. Naturally, you want to die with dignity, have access to quality healthcare and best medical treatment. After all, you can’t bring your wealth to your grave, so why not spend it before you die?
My family’s experience
I can certainly relate to the anxiety of those facing imminent death due to terminal illness. A few years ago, my late father was diagnosed with Multi-System Atrophy (MSA) and the doctor told him that his maximum lifespan was only 6 years. We wanted to withdraw his CPF Medisave monies which amounted to about $30,000 to pay for his monthly eldercare fee and medical expenses for his homecare. At that point of time, we were not aware of this CPF Withdrawal on Medical Grounds scheme but went to apply for withdrawal with our Member of Parliament anyway.
Unfortunately, our application was rejected by Ministry of Health without any reasons given. Dad was very disappointed because his dying wish was to use his Medisave to pay for his medical expenses. He had relied on the monthly pay-outs from his Eldershield insurance to pay for his eldercare fees but the pay-outs lasted for only three years. Incidentally, at that time, the eldercare centre increased the monthly fees by $150, citing rising costs. So Dad decided not to carry on with the rehabilitation because he did not want to increase our financial burdens.
Up to now, I still don’t know why our application to release Dad’s Medisave monies was rejected because he actually had valid medical grounds for withdrawal. We were not appealing to Singapore’s government for subsidies or expecting any hand-outs but to only release my Dad’s Medisave monies to offset his eldercare expenses and medical costs. Is this considered a form of welfare which the late Lee Kuan Yee deeply abhorred? If CPF monies really belonged to us, then was it right to withhold a dying man’s wish?
Would the $30,000 be useful for my Dad and Mom? I would say yes, of course. Dad’s condition deteriorated extremely fast. Within two years, he lost mobility and the ability to speak and swallow. He also developed festering bed sores and was in and out of hospital after fallen unconscious for several times. The monies could have been used to hire a domestic helper and pay for medical expenses.
Maybe our leaders and policy-makers don’t care anymore. Maybe in their eyes, this article is just one of the many sob stories which they are immune. But nonetheless, I urge them to show more empathy and compassion when they craft policies that may have an impact on Singaporeans. Life is a mystery and you never know if in future, your loved ones might be affected by the policies you created.
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SG Wealth Builder