What is CPF?
The Central Provident Fund (CPF) is a social security savings scheme allowing employees, under 65 years old, as well as their employers to contribute to retirement savings. The primary reason for it being set up was to provide for retirement. This has been amended to allow individuals to use this to invest, purchase homes and provide for healthcare expenses.
Can Expats Contribute to CPF?
Since 1995, expats, including their employers, living and working in Singapore are not required to make contributions to the CPF. This remains the case until they become Permanent Residents.
CPF Contribution Rates
Source: CPF Board Website – 2015
Wage Ceilings that Apply to CPF Contributions
Ordinary Wage Ceiling – The maximum contributions payable are based on a maximum monthly salary of $5,000 SGD
Additional Wage Ceiling – This is the maximum amount of Additional Wages on which contributions are payable. The employee’s Additional Wage Ceiling is computed per employer and there is a calculator available here
Are Your Retirement Plans on Track?
One particularly important factor to note is that the Total Contribution rates below decrease as you get closer to your retirement age. It is therefore worthwhile speaking with a professional Adviser to ensure that you will be adequately prepared at retirement.
Unfortunately, the percentage of people in Singapore with adequate funds in their CPF to draw a sufficient retirement income is alarmingly low. It is important to ensure that your contribution strategy is aligned to your retirement goals and your CPF funds are working for you. Contact me to discuss how we can put your CPF funds to work for you.Learn How You Can Maximise Your CPF Returns
CPF can be an excellent investment strategy under the right circumstances. Learn how you can put your contributions to work for you by booking a no-obligation consultation with me today.