The Central Provident Fund, or CPF, is an important source of income for workers. Every month, bosses must set aside a portion of their pay for employee CPF contributions. This is very important CPF information for workers.
People have always been intrigued by CPF concepts, whether they can be touched or not. Why is it that people frequently say that money is intangible?
All Singaporeans and permanent residents are required to contribute to the CPF. Your CPF account will be funded with 20% of your pay. Your employer will also contribute an additional 17% of your salary. Based on the illustration below, your employer's additional contribution is very sweet indeed!
Employees between the ages of 55 and 60 will see a 1.5% increase in their total CPF contribution.
Employers will contribute 14.5% (up 0.5% from the previous rate), while employees will contribute 15% (up 1% from the previous rate).
The increased CPF contribution rates will go entirely into the Special Account to supplement their retirement needs.
CPF can be used to pay medical bills and purchase a BTO flat, among other things. The three CPF accounts each serve a different purpose. The Ordinary Account (OA), Special Account (SA), and Medisave Account (MA) are all used to pay for medical expenses, whereas the Ordinary Account can also be used to pay for HDB, education, insurance, and other expenses. Finally, the Special Account will be used to fund your retirement.
Based on your age, the amount of your CPF contribution will be divided among these three accounts. For example, if you're 21, you'll make more contributions to your OA, whereas a 63-year-old man will make more contributions to his MA.
You can use your entire CPF OA savings or set aside up to $20,000 for future needs if you are a first-time BTO buyer with a HDB loan.
As previously stated, a 20% deduction will be deducted from your salary and deposited into your CPF. This will, however, be subject to a $6,000 limit. If you earn $10,000, for example, your 20% contribution will be only $6,000.
You will only contribute $1,200 (20% of $6,000) instead of $2000 (20% of $10,000)!
As you get older, your contribution will diminish significantly.
Your and your company's contributions will be reduced to 13% each when you reach the age of 55 to 60.
And if you are between the ages of 60 and 65, you will contribute 7.5% of your income, while your employer will contribute 9%.
After the age of 65, you will contribute 5%, while your employer will contribute 7.5%.
Reference article - https://en.wikipedia.org/wiki/Retirement_age
