Written by Dee Lim
Singapore – The Central Provident Fund (CPF) was established by the Singapore government in 1955 as an important pillar of the country’s social security system. It is governed by his CPF Board of Directors, consisting of the Chairman and 14 other members, who oversee the organization’s budget and performance.
On a broader scale, the CPF is part of Singapore’s ongoing efforts in social policy to encourage active support from the government to help people become self-reliant, especially in later life. Here are some things to note about CPF:
1.What is CPF?
The CPF is part of our efforts to ensure that all Singaporeans and permanent residents have sufficient funds for their retirement. This retirement savings plan is designed to help anyone achieve her three main goals: a paid-off home, saving for adequate insurance and health care, and a stable retirement income for life. Ta.
CPF is funded by two main contributions: your employer’s and your own monthly salary. These are collected into his three different accounts: Ordinary Account (OA), Medisave Account (MA), and Special Account (SA). A retirement account (RA) is created when you reach age 55.
2. How much is the CPF contribution each month?
The total monthly contribution depends on your age. He ranges from 12.5% to 37% of monthly salary and is only applicable to those whose monthly salary exceeds S$750.
For those with a monthly income of more than S$50 and less than S$750, employers will still have to pay their share of CPF contributions, but there will be no contribution from employees.
The monthly donation percentages are as follows:
|
Employee age (years) |
by employer |
By employee |
Total (% of wages) |
|
Under 55 years old |
17 |
20 |
37 |
|
Over 55-60 years old |
15 |
16 |
31 |
|
Over 60 years old to under 65 years old |
11.5 |
10.5 |
twenty two |
|
Over 65-70 years old |
9 |
7.5 |
16.5 |
|
over 70 |
7.5 |
Five |
12.5 |
3. How do I calculate CPF deduction from my salary?
To calculate how much money will be credited to your CPF account each month, use our handy CPF contribution calculator.
4. How can I check my CPF recommendation?
Money from your CPF is considered part of your estate and is paid and distributed on your death. If a CPF nomination is made, it will be distributed to the designated candidates. In the absence of a nomination, CPF savings will be transferred to the Official Trustee for distribution in accordance with Singapore law.
To check your CPF nominations, go to the CPF nominations page and log in with Singpass. If you haven’t already done so, follow our online guide to create a nomination. You can also update your suggestions here.
If your details are not available online, you can submit a request using Singpass. Your request will be processed within 4 business days.
5. How can I invest my CPF funds?
The CPF Investment Scheme (CPFIS) allows you to invest your CPF funds and grow your CPF further. You will need to set up a CPF investment account with a registered bank such as DBS, OCBC or UOB. This allows you to invest funds in OA. You do not need to open a CPF investment account to invest your SA savings.
Please note that to invest in CPFIS, you must maintain a minimum of S$20,000 in OA and S$40,000 in SA.
You can invest in a variety of products including stocks, REITs, exchange-traded funds, bonds, gold, insurance products, unit trusts, Treasury bills (or T-bills), Singapore government bonds, fixed deposits, and more. However, the CPF Board does not approve any product provider or investment product to be included in the CPFIS.
6. How can I purchase property with CPF funds?
When it comes to real estate, you can use your CPF OA to buy Housing Development Board (HDB) flats or to buy or build private residential land.
There are terms and conditions for using CPF for housing, and there are also some restrictions. Broadly speaking, this is what you need to know, but always check with CPF for details.
When purchasing an HDB or DBSS flat or a private residential property, OA can be used to:
-
As a direct down payment for the purchase price of an apartment
-
As part of your mortgage or as part of your monthly loan payment
-
To pay stamp duty and legal fees incurred when purchasing real estate or taking out a mortgage
-
To pay Home Protection Scheme premiums (HDB flats only)
CPF cannot be used to pay reservation fees, optional fees, security deposits, or monthly service charges or protection fees payable to the Town Council. Taxes levied on your apartment are also not eligible to be paid by CPF. Renovation costs are also not covered by CPF and he cannot use OA if the purchase price exceeds the purchase price or appraised value of the property, whichever is lower.
It is also important to note that when using CPF against HDB or DBSS flats or private residential properties, there are withdrawal limits depending on the age of the property and when it was purchased.
Check the CPF website for the maximum amount of CPF funds that can be used to purchase property.
If you are 54 years old, you can apply to leave your savings in an OA so that they are not transferred to your retirement account when you turn 55. You should consider this if you are currently using your OA to pay off your existing mortgage, or if you are thinking of using your OA to fund your next property purchase.
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