How much more will you get in your CPF account after the monthly salary ceiling is raised? Will it be enough for your retirement?
SINGAPORE: You may have heard by now that the Central Provident Fund monthly salary ceiling will be going up, as part of announcements in Budget 2023 to address the retirement adequacy of Singaporeans.
All these extra CPF savings will help with the servicing of mortgages and add to a bigger retirement nest egg, experts told CNA.WHAT IS CPF AND HOW DOES IT HELP WITH RETIREMENT? When you turn 55, funds in the Special Account, followed by the Ordinary Account, will be transferred to a newly created Retirement Account that offers yearly interest of 4 per cent.
Meeting the highest tier – the Enhanced Retirement Sum of S$298,200 – will yield monthly payouts of about S$2,370. Let’s assume an individual who is 35 years old this year and earns at least S$8,000 a month with no additional bonuses – that is an annual salary of S$96,000. These calculations exclude any CPF contributions made prior to 2023. They also assume that the income ceiling for monthly CPF contributions remains at S$8,000 until 2043, although this is unlikely to be the case given period reviews to factor in rising income levels and cost of living, EY noted.
The annual ceiling sets out the maximum amount of annual income that is subject to CPF contributions. The yearly income takes into account additional wages such as a performance bonus. Back to the 35-year-old example, having additional funds of about S$170,000 will help this person to “meet or exceed” the Basic Retirement Sum by the time he or she turns 55 in 2043, Mr Selvam said.
While it is good news that more people will be able to accumulate larger amounts in their CPF and in turn receive bigger payouts for their retirement, it is also worth noting that the estimated monthly payouts have not been increasing at the same pace as the retirement sums.
South Africa Latest News, South Africa Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Real-life CSI: This forensic pathologist in Singapore searches for clues in dead bodies to help solve crimesCNA Lifestyle visits the mortuary to find out what forensic pathologists like Dr Lee Chin Thye do – and is it anything like true crime TV shows.
Read more »
School Work: Meet the policeman-turned-discipline master who strives to teach children right from wrongIn the second part of a series where CNA reporters shadow various school professionals for a day, a discipline master at Yuhua Primary School shows what it means to him to care for children - and who is a far cry from the type of discipline master many people might remember.
Read more »
'I consider this my second life': How a drug addict kicked the habit after jail stints, leg amputationMr Aaron Chew became hooked on heroin in secondary school. He tells CNA about the gruelling process of overcoming his addiction, which included multiple stints in prison or drug rehabilitation centres over a decade.
Read more »
Money Talks: Why the ABCs of financial literacy for children is criticalHow an adult manages his finances has a lot to do with money lessons he learnt as a child and parents should communicate concepts such as saving and investing as early as possible. Foord Asset Management portfolio specialist and father of two, Ruperto Ancajas, explains why in this episode of the Money Talks podcast.
Read more »