Among Singapore residents aged 65 in 2006, 67% can expect to be alive at age 80 and 47% at age 85. This rising life expectancy means a change in the way we support ourselves.
Number of Singapore residents aged 65 or older...
Supporting and caring for a rapidly aging population will be an increasing strain on Singapore's younger generations. Today, 8.5 economically active persons are supporting one elderly. By 2030, only 3.5 persons will be supporting one elderly! Therefore, it is important that you plan early for a secure retirement.
The Central Provident Fund (CPF) is a comprehensive social security savings plan that has provided many working Singaporeans with a sense of security and confidence in their old age. The overall scope and benefits of the CPF encompass the following:
Working Singaporeans and their employers make monthly contributions to the CPF and these contributions go into three accounts:
- the savings can be used to buy a home, pay for CPF insurance, investment and education.
- for old age and investment in retirement-related financial products.
- the savings can be used for hospitalisation expenses and approved medical insurance.
Your CPF savings earn a minimum risk-free interest of 2.5% guaranteed by the Government. Special, Medisave and Retirement Account savings currently earn a guaranteed minimum 4% interest until 31 December 2013. In addition, the first $60,000 in your combined CPF balances, with up to $20,000 from your Ordinary Account, will earn an extra 1% interest. So leave your money in your CPF accounts to enjoy this extra interest.
It is important to plan the use of your CPF savings to ensure the following:
||Sufficient savings to see you through your retirement |
||A property that is fully paid-up when you retire
||Sufficient savings to meet your medical needs in your old age|
Your CPF will provide you with a retirement income to meet your basic needs in old age. Members are encouraged to supplement their retirement income with their personal savings.
To ensure that you have a roof over your head when you retire, map out your finances carefully when you buy a home. Buy a home that you can afford so that your home will be fully paid-up when you retire.
Saving for future medical expenses is important as the need for medical care increases significantly as you grow older. Use your Medisave wisely by staying in affordable wards when hospitalised. You should also stretch your healthcare dollar by buying medical insurance such as MediShield. This will help you to meet the treatment expenses for prolonged or serious illnesses.
Click here for more information on CPF Schemes and Services