> The magnitude of the investment also probably makes it impractical for anyone but the very wealthy to retire before that starts paying out...
But they can pull out for housing right? That's an enormous portion of most people's expenses. If I didn't have to worry about housing, I could be living large on less than half of my salary, I would certainly semi-retire at least.
Sort of. So far as I can tell, you can withdraw to buy housing but I don’t think you can pay rent out of it.
The loans are also 75% max loan-to-value so I think until you can get 25% of the purchase price in your account you have to pay CPF and rent (or live with family).
Also, not an economist, but I suspect the forced savings has a wildly inflationary effect on housing prices. You can’t do much else with the money until you retire, so I would guess the price of housing rises up to match the forced savings rate.
> the forced savings has a wildly inflationary effect on housing prices
Housing prices are inflationary independent of CPF, because flats in Singapore are powerful investment vehicles. For HDB flats, however, there is means-testing and rebates to the amount of ~50%, sufficient for anyone on the 30th percentile and above to afford.
Very few locals pays rent here. Most people buy houses. Its kindof forced thanks to the system, but its designed in a way that unless you are a decimillionaire housing is expensive, but attainable. This is done by splitting the housing market into private and public housing. Is this perfect? No.
And yes it does drive inflation of house prices.