Comprehensive Guide to Singapore CPF Contributions

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Welcome to our comprehensive guide on Singapore CPF – a system that plays a crucial role in shaping the financial security and retirement planning of Singaporeans. As one of the most sophisticated social security savings schemes in the world, the CPF has evolved over the years, offering a strong foundation for individuals to build a financially stable future.

In this blog, we embark on a journey to demystify the complexities of Singapore CPF, exploring its historical evolution, key features, and the ways in which it empowers citizens to optimize their financial well-being. Whether you’re a Singaporean navigating the intricacies of the CPF or an individual interested in understanding how social security systems work, this guide is tailored to provide you with valuable insights and practical knowledge.

What is CPF

The Central Provident Fund (CPF) lies at the heart of Singapore’s social security framework, providing a comprehensive safety net for citizens throughout their lives. The CPF was established in 1955 to address the socio-economic challenges faced by the post-independence Singapore. Initially designed as a compulsory savings scheme to provide retirement funds for workers, it has evolved over the decades to encompass a broader scope of benefits, including healthcare and housing financing.

Objectives and Key Features of the CPF

The CPF serves a multi-faceted purpose, catering to the long-term financial well-being of Singaporeans. Its primary objectives are:

  • Retirement Savings: To accumulate savings for retirement, ensuring financial security in the golden years.
  • Healthcare Financing: To provide for medical expenses and healthcare needs through the MediSave Account (MA).
  • Homeownership Support: To assist with housing needs, such as down payments and mortgage payments through the CPF’s housing schemes.
  • Asset Enhancement: To enable CPF members to invest and grow their savings through the CPF Investment Scheme (CPFIS).
  • Financial Protection: To offer insurance coverage and financial assistance during critical life events.

CPF accounts

CPF is structured into three main accounts. From the age of 55, you also receive a Retirement Account (RA), which is an amalgamation of your Ordinary Account and Special account.

  • Ordinary Account (OA): Used for housing, education, investment, and insurance.
  • Special Account (SA): Primarily focused on retirement savings and investment in approved financial products.
  • MediSave Account (MA): Dedicated to covering healthcare expenses and medical insurance.

The division of contributions into these accounts allows for different financial goals to be met simultaneously.

CPF Contributions and Allocations

The Central Provident Fund (CPF) operates on a contributory basis, with both employees and employers making regular contributions to fund various accounts that serve different financial needs. In this section, we will explore the mechanics of CPF contributions, the rates applicable, and how the funds are allocated to different accounts.

CPF Contribution Rates 2023 for Employees and Employers

CPF contributions are calculated based on a percentage of an employee’s monthly wages. As of July 2023, the contribution rates are as follows:

Age of employeeBy employerBy employeeTotal Rates
55 and below17%20%37%
Above 55 to 6014.5%15%29.5%
Above 60 to 6511%9.5%20.5%
Above 65 to 708.5%7%15.5%
Above 707.5%5%12.5%

Self-Employed and Voluntary Contributions

Self-employed individuals, including freelancers and those without an employer, have the option to contribute to their CPF accounts voluntarily. These contributions can be made to the OA and MA, providing self-employed individuals with a means of saving for retirement and healthcare needs. Except for Medisave contributions, which you’ll be prompted to pay after filing your taxes each year.

Division of CPF Funds into Accounts

The CPF contributions made by both employees and employers are divided into the three accounts mentioned earlier: the Ordinary Account (OA), Special Account (SA), and MediSave Account (MA). The allocation of funds depends on the age and income of the CPF member.

  • For employees below 55 years old: The majority of the contributions go to the OA, while a smaller portion is allocated to the SA and MA to foster long-term savings and healthcare coverage.
  • For employees aged 55 and above: A higher proportion of the contributions is channeled to the SA, with a smaller portion going to the OA and MA. This shift in allocation aims to enhance retirement savings.

Planning for Retirement with CPF

Retirement is a significant milestone in one’s life, and the CPF plays a crucial role in providing financial security during this phase. In this section, we will explore how the CPF Retirement Scheme works, including the Retirement Sum, Minimum Sum, and Full Retirement Sum, to help Singaporeans plan for a comfortable retirement.

Retirement Sum, Minimum Sum, and Full Retirement Sum

The Retirement Sum is the amount of money that CPF members need to set aside in their RA to receive monthly payouts during retirement. There are two key components of the Retirement Sum:

  • Minimum Sum: The Minimum Sum is the lower threshold that CPF members must meet in their RA to qualify for monthly payouts. It is adjusted annually to account for inflation and changes in the cost of living.
  • Full Retirement Sum: The Full Retirement Sum is a higher threshold, set at 2.5 times the Minimum Sum. If a CPF member has sufficient funds in their RA to meet the Full Retirement Sum, they will receive higher monthly payouts during retirement.

Calculating Expected Retirement Payouts

The amount of monthly payouts a CPF member receives during retirement is determined by the total amount in their RA, specifically the excess above the Full Retirement Sum. The CPF Board provides calculators and resources to estimate the expected payouts based on the RA balance.

Options for Receiving Retirement Payouts

CPF members have the flexibility to choose from several retirement payout options, which can affect the amount and duration of the payouts. Options include the Basic Retirement Sum Scheme, Full Retirement Sum Scheme, and Enhanced Retirement Sum Scheme.

Making Informed CPF Investments

The Central Provident Fund Investment Scheme (CPFIS) empowers CPF members to grow their CPF savings by investing in a range of approved financial instruments. In this section, we will explore the CPF Investment Scheme, the investment options available for the Ordinary Account (OA) and Special Account (SA), and the considerations for making informed CPF investments.

Understanding CPF Investment Scheme (CPFIS)

The CPFIS allows CPF members to invest a portion of their OA and SA savings in various financial products, such as stocks, bonds, unit trusts, and real estate investment trusts (REITs). By participating in CPFIS, members have the potential to earn higher returns compared to the CPF’s guaranteed interest rates.


CPFIS offers two sub-schemes for the OA and SA accounts, each with distinct investment guidelines:

  • CPFIS-OA: This scheme allows CPF members to invest in a range of approved instruments with the primary goal of growing their OA savings. The returns from these investments are credited back into the OA.
  • CPFIS-SA: The CPFIS-SA is designed to focus on long-term retirement savings. CPF members can invest their SA savings in approved financial products to achieve higher returns, which contribute to their retirement fund.

It is essential to seek professional financial advice or conduct thorough research before making investment choices, as CPFIS investments carry market risks.

Housing and CPF: Striking the Balance

Using CPF Funds for Housing Purchases

CPF members can use their savings from the OA to finance various housing-related expenses, including down payments and monthly mortgage payments. The amount that can be withdrawn from the OA depends on factors such as the property type, the remaining lease of the property, and whether it is a public or private residential property.

The CPF Housing Schemes

CPF offers several housing schemes to assist members in purchasing their homes:

  • Public Housing Scheme: CPF members can use their OA savings to buy Housing and Development Board (HDB) flats, which are government-subsidized public housing units. Additionally, they can also use their OA savings to service their HDB housing loans.
  • Private Residential Property Scheme: CPF members can use their OA savings to finance private residential properties, including private condominiums and landed properties. The amount available for withdrawal depends on the property’s remaining lease.

The Balance Between Housing and CPF Savings

While using CPF for housing is a valuable benefit, it is crucial to strike the right balance to ensure sufficient CPF savings for other financial goals, such as retirement and healthcare needs. Depleting CPF savings entirely for housing may hinder the ability to accumulate adequate retirement funds.

Before making housing decisions, individuals should carefully assess their financial situation, housing needs, and long-term goals. Exploring various housing options, considering affordability, and evaluating the impact on CPF savings can lead to a well-informed housing choice.

Securing Healthcare with CPF

Singapore CPF not only serves as a robust retirement savings scheme but also plays a vital role in securing healthcare financing for its members.

Eligible Medical Expenses Covered by MediSave

MediSave complements the national health insurance scheme, MediShield Life, which provides coverage for large hospital bills and selected outpatient treatments. CPF members can also use their MediSave to pay for premiums for private Integrated Shield Plans (IPs) to enhance their healthcare coverage.

Optimizing CPF Withdrawal Strategies

CPF members have different withdrawal options based on their age:

  • Age 55: At the age of 55, CPF members have the option to withdraw a lump sum from their OA and SA, subject to the prevailing Full Retirement Sum (FRS) requirement. They can also choose to leave their funds in the CPF and continue earning interest until the age of 65.
  • Age 65: At the age of 65, CPF members have the choice to commence monthly payouts from their Retirement Account (RA). The amount of monthly payouts depends on the RA balance, which is the excess above the Basic Retirement Sum (BRS).


Singapore CPF (Central Provident Fund) stands as a testament to the nation’s commitment to providing its citizens with a robust social security system and a foundation for financial security throughout their lives. In this comprehensive guide, we have delved into the various facets of the CPF, from its historical evolution to its role in securing retirement, healthcare, and homeownership.

Understanding the CPF system is not just a matter of compliance but a crucial step in empowering individuals to take charge of their financial future. By optimizing CPF contributions and allocations, making informed investment decisions, and striking a balance between housing needs and long-term savings, CPF members can leverage this powerful savings scheme to their advantage.

As you embark on your financial journey, may this guide serve as a valuable resource to navigate the intricacies of Singapore CPF and secure a brighter and more financially stable tomorrow.

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