CPF was established to force working adults to save enough for retirement (see Wikipedia). It was also setup to force people who don't plan for the future, people who use up what they earn on unnecessary things. The arrangement is that, workers will be forced to allocate 20% of their salary for CPF. At the same time, the government forces employers to top that up, with 16% of worker's salary (from the companies coffer). Talk about government intervention for the betterment of its working citizens. All in all, workers get to enjoy a long term saving plan of 36% of their salary. What's more, the fund generates a risk-free interest rate that is higher than most of any other investment out there, currently at > 4% pa for for Medisave and Retirement account.
To think that "CPF is my money" is wrong. If CPF did not force people to save in the first place, there won't be an additional 16% from employers, and an annual interest rate of > 4%. Without CPF, most people without plan will end up homeless and "clingy" to government help (but fortunately, Singapore is not a welfare country that would spend tax-payers money on lazy bums [I'm not talking about jobless people who deserve short-term help during their job search, but rather on people who misuses the fund to live off being a bum]).
The role of CPF is to dispense monthly retirement monies to contributors once they turn 65. This is similar to pension given by certain governments to their employees after retirement. Unlike certain countries, Singapore depends on CPF to dispense "pensions", in which the amount is relative to the sum kept with CPF. If the contributor has more in CPF, then the allocated monthly payout will be higher. There is a minimum requirement for CPF, and most working Singaporeans (with lower salary) worried about not being able to fulfil this. Fortunately, the government is helping by providing annual "bonus" payment to these accounts after contributors turn 65 years old. This is to supplement the lower monthly payout of these accounts.
Why can't I take all my money out from CPF? If you want to withdraw your money, then it should be just 55.6% of the amount on the CPF account. This is considering that 44.4% was not yours (because when you injected 20% of your salary, your employers were injecting 16%). If you want to defeat the purpose of why CPF was setup, then you shouldn't complain about getting just 55.6%. At least, 44.4% will still be available for use in giving a monthly payout to sustain you.
For those who will use their CPF withdrawal for the greater good, congrats because I believe the "investment" will be great, e.g. funding a college or education for your kids, or investing in the property you have always dreamed of that will appreciate in value, in years to come, or in case of emergency for the medical treatment of someone you cared/loved, or for religious obligations and other beneficial purposes.
Anyway, for those who will spend it off to go for the dream vacation, or to spend it on lovers, or a visit to Sentosa Gambling hub, or the sport car (with yearly value depreciation), or whatever indulgence you can think of; then good luck to you and I hope you don't live for long because when your saving is depleted and you are useless, you will be a burden to your kids, and your government. One good use you will be is for politicians to misuse during election day. Let Singapore accumulate debts so as to give welfare to undeserving candidates. If the payout is good, probably these bums can stay in third world country and live like Kings.
As a parent, it's never in my mind to think that CPF being inherited by next generation is a BAD idea. Why not pass the CPF to your kids? Are they unworthy? If your children are useless (or not filial piety), as parents you are held responsible too.
Well, good news to those who always wanted their CPF for enjoyment or upgrade of their current lifestyle before meeting their makers. You will be able to get lump sum now (~ 20%). For those with poor circumstance, I hope you will not be hawked by unscrupulous people/condition (be it family members, "lovers", conmen, or gambling tables), in which the spent money becomes a regret later. Not to worry though, the 80% left is still a safety net for you; how long will this be status quo is unknown considering that certain politician (or wannabe blogger) wants to harp on the issue to get more votes (or more "likes" on their blogs) just to topple a system that has benefited countless.
Just a thought.