CPF, or Central Provident Fund, is a social security savings scheme in Singapore that serves as a crucial foundation for retirement planning. It was introduced in 1955 to help Singaporeans and Permanent Residents save for their retirement, healthcare, and housing needs. With the rising life expectancy and aging population in Singapore, CPF has become more important than ever, making it essential to understand its significance in retirement planning.
A major portion of an individual’s CPF contributions goes towards their retirement account, also known as the Special Account (SA) and the Ordinary Account (OA). These funds can be used to support an individual’s retirement needs, such as monthly payouts, annuities, and Medical Savings Accounts (MSA). The remaining funds are allocated for housing and healthcare expenses. One of the key advantages of CPF is that it provides a stable and secure source of income during retirement, ensuring financial stability for individuals in their golden years.
Moreover, the government offers several attractive incentives and schemes to encourage individuals to save more in their CPF accounts. This includes the Additional Retirement Savings Scheme (ARSS), which offers a 1% additional interest on the first $60,000 of an individual’s combined SA and OA balances. There are also top-ups available for individuals above a certain age to boost their retirement savings. By understanding the various CPF schemes and incentives