For the uninitiated, this comprehensive CPF guide is for you.
What Is Central Provident Fund (CPF)?
CPF, short for Central Provident Fund, is a social security system that helps Singaporeans set aside savings for retirement. CPF savings can also be used for housing, healthcare and insurance, as well as certain investments. Both employers and employees make monthly CPF contributions.
What Can CPF Be Used For?
CPF contributions go into three accounts:
Ordinary Account: For housing, insurance and investment
Special Account: For old age and investment in retirement-related financial products.
MediSave: For hospitalisation expenses and approved medical insurance.
Why Do We Have CPF?
CPF helps to ensure that Singaporeans save up for important things in life - retirement, housing, and healthcare. According to a study done on financial planning attitudes of Singaporeans, about 3 out of 10, aged between 30 and 39, had not started planning for future financial needs!
The reason we have CPF in place is simple: it helps us set aside money for our retirement needs and reduces our nation’s risk of having to depend on a shrinking working population to support a growing number of elderly residents.
Amongst other things, CPF also helps to maintain homeownership rates in Singapore as these funds can be used to pay for home purchases.
Who Is Required To Make CPF Contributions?
All Singapore Citizens (SCs) and Singapore Permanent Residents (SPRs) make monthly CPF contributions. You will make and/or receive contributions in your CPF accounts as long as you are:
Working in Singapore under a contract of service.
Employed under a permanent, part-time or casual basis.
If you are self-employed, only MediSave contributions are mandatory*. You can check how much MediSave contributions you need to make by logging in to my CPF Online Services with your SingPass, clicking on ‘My Messages’ and scrolling to the bottom of the page to view the message in ‘Others’.
You can, however, contribute to your three CPF accounts voluntarily.
The voluntary contributions will be apportioned and credited to your Ordinary, Special and MediSave accounts based on the CPF allocation rates expressed as ratios of contribution. Check out the Self-Employed Scheme FAQs on the CPF website to find out more.
*If you earn an annual Net Trade Income of more than $6,000.
Introduction To CPF Contribution And Allocation Rates:
CPF contribution rates are the percentage of your wages that your employer and you have to contribute towards your CPF savings.
Your CPF contributions are distributed to your Ordinary Account (OA), Special Account (SA), and MediSave Account (MA) according to the CPF allocation rates.
Different CPF contribution and allocation rates apply to different age groups to ensure the employability of workers and to meet their needs at various stages of their lives.
As we grow older, the proportion drawn from our salary and contributed towards our CPF accounts will decrease. However, the allocation rates to your MA will increase. This is to meet our healthcare needs, especially during retirement.
To find out more about how your CPF contribution and allocation rates change as you grow older, you can read this article.
CPF Interest Rates
*The above interest rates include 1% p.a. extra interest on the first $60,000 of combined CPF balances, with up to $20,000 from the OA. Those aged 55 and above also earn 1% p.a. additional extra interest on the first $30,000 of combined balances, with up to $20,000 from the OA, thus earning up to 6% p.a. on their retirement balances. Extra interest earned on OA savings go into your Special Account or Retirement Account to enhance your retirement savings. Refer to
CPF interest rates page for more information.
CPF Retirement Sum – What Happens At Age 55?
When you reach 55, a Retirement Account (RA) will be created for you.
The savings from your Special Account (SA) and/or Ordinary Account (OA), up to your Full Retirement Sum (FRS), will be transferred to your RA to form your retirement sum. The retirement sum will provide you with a monthly payout from the payout eligibility age, which is 65 for members born in or after 1954.
When you turn 55, you can withdraw:
(i) $5,000 or your Ordinary and Special Account savings above the Full Retirement Sum, whichever is higher
(ii) Any Retirement Account savings (excluding top-up monies, government grants, and interest earned) above the Basic Retirement Sum as long as you own a property.
Basic Retirement Sum In Years To Come
To help you plan early for retirement, the Basic Retirement Sum will be made known to you ahead of time. For each successive cohort of members turning 55, the payouts will need to be higher to account for long-term inflation and rising standard of living.
Correspondingly, the Basic Retirement Sum to be set aside has to increase.
CPF Lifelong Income For The Elderly (CPF LIFE) Scheme is a life annuity scheme that provides Singapore Citizens and Permanent Residents with a monthly payout for as long as they live.
You can choose to receive your monthly payout anytime, from your payout eligibility age up to age 70.
Who Will Join CPF LIFE?
You will automatically be included in CPF LIFE to enjoy lifelong payouts if:
you are a Singapore Citizen or Permanent Resident born in 1958 or after; and
have at least $60,000 in your Retirement Account six months before you reach your Payout Eligibility Age (PEA).
What Are The 3 Different LIFE Plans And How Do They Differ?
There are three CPF LIFE plans for you to choose from – the LIFE Standard Plan, the LIFE Escalating Plan and the LIFE Basic Plan.
The plans differ in terms of the monthly payout you would receive.
What Are The Estimated Monthly Payouts?
Your CPF LIFE monthly payouts would depend on factors such as:
The premiums and payouts are determined by an independent actuarial consultant.
Below are references for how much you need to have at age 65 for your desired CPF LIFE payouts. If you set your savings earlier at age 55 or 60, you will require less to receive the monthly payouts you want! .
CPF Calculator: CPF LIFE Estimator – If you’re born in or before 1981, you can use this tool to estimate how much you can receive in monthly retirement payouts.
This article was first published on
Last updated on 15 June 2021.