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How your CPF contributions and allocation rates change as you grow older

21 Apr 2017 
SOURCE: CPF Board

​Remember the day you received your first paycheck and took your parents out for a nice meal to celebrate? That is also the very day your first working CPF contribution was deposited, and you started saving for your future!

 

But #DidYouKnow that your CPF contribution and allocation rates are adjusted at various milestones to reflect your changing needs?

How your CPF contributions and allocation rates change as you grow older.png 

Age 35 and below

At the start of your career, your CPF contributions will amount to 37% your monthly salary, with 17% contributed by your employer and 20% contributed by yourself. A large portion of this, 23% of your salary to be specific, goes towards your Ordinary Account (OA), which can also be used for your first home purchase in future.

 

Above 35 to 55

If you are above 35 to 55, you’ll see that there is a gradual shift in allocation of your contributions from your OA to your Special Account (SA) and Medisave Account (MA). Between 50 and 55 years old, your SA and MA contributions will amount to 11.5% and 10.5% of your monthly salary. These savings serve to form the foundation of your retirement and healthcare needs in old age.

Employee's age 
(years)

Allocation Rates from 1 Jan 2016

(for monthly wages ≥ $750) ​ ​

Ordinary Account

(% of wage)

Special Account

(% of wage)

Medisave Account

(% of wage)

Above 35 to 45

21

7

9

Above 45 to 50

19

8

10

Above 50 to 55

15

11.5

10.5

 

Above 55 to 65

Towards the later part of your working life, the percentage of your salary received in CPF contribution is reduced from 37% to 16.5%, with 9% contributed by your employer and 7.5% contributed by yourself. With this, you can continue to remain competitive in the workforce.

 

Since it is highly likely for your home to be fully paid for and your retirement sum to be set aside in your Retirement Account (RA) by then, less of your contributions will be allocated to your OA and SA, i.e. you will continue to save 10.5% of your salary in your MA.

 

Employee's age 
(years)

Allocation Rates from 1 Jan 2016

(for monthly wages ≥ $750) ​ ​

Ordinary Account

(% of wage)

Special Account

(% of wage)

Medisave Account

(% of wage)

Above 55 to 60

12

3.5

10.5

Above 60 to 65

3.5

2.5

10.5

 

Above 65

If you decide to continue working after 65, your CPF contributions will amount to 12.5% of your monthly salary, with 7.5% contributed by your employer and 5% contributed by yourself. Only 1% of your salary will be contributed to your OA and SA respectively. 10.5% will continue to go towards your MA to maintain the Basic Healthcare Sum for any medical expenses you may incur in old age.

 

Employee's age 
(years)

Allocation Rates from 1 Jan 2016

(for monthly wages ≥ $750) ​ ​

Ordinary Account

(% of wage)

Special Account

(% of wage)

Medisave Account

(% of wage)

Above 65

1

1

10.5

 

Do you have a better understanding of your CPF contribution and allocation rates now? You can put this knowledge to good use by taking your CPF savings into account when planning your finances for the future!


Find out how you can manage your financial responsibilities as an adult by following @cpf_board on Instagram! #ICanAdult and face the challenges ahead one step at a time!

 

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