Are you considering a move to Singapore for work or retirement? If so, one important aspect of living in this wealthy island state is understanding the Central Provident Fund (CPF) system. The CPF is a mandatory savings scheme for all working Singaporeans and permanent residents, with contributions from both employees and employers. It serves as a comprehensive social security system that provides Singaporeans with a safety net and a source of income for retirement, housing, healthcare, and education.
If you are an expat planning to work in Singapore, you may be wondering how the CPF system applies to you. The good news is that all foreigners holding a valid work permit in Singapore are also covered under the CPF scheme. This means that you will contribute towards your retirement savings and other benefits, and can withdraw them when you leave the country. Understanding the CPF system and its benefits is crucial for making informed financial decisions and planning for your future in Singapore.
The CPF operates on a three-tiered system, comprising the Ordinary Account (OA), Special Account (SA), and MediSave Account (MA). Your contributions are automatically deducted from your monthly salary and allocated to these three accounts, based on set contribution rates. The OA can be used for housing, investment, and education, while the SA is for retirement and investment. The MA is strictly for healthcare expenses, such as hospitalization and medical insurance