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Building Your Nest Egg in Singapore: A CPF Guide for Expats and PRs building your nest egg in singapore a cpf guide for expats and prs

The Central Provident Fund (CPF) in Singapore is a comprehensive social security system that plays a pivotal role in the financial well-being of Singaporeans and Permanent Residents (PRs), providing for their retirement, healthcare, and housing needs. Introduced on July 1, 1955, the CPF has evolved from a simple savings scheme into a key pillar of Singapore’s social security system.

Eligibility for CPF Contributions

CPF contributions are mandatory for Singapore citizens (SCs) and Singapore Permanent Residents (SPRs) who are employed under a contract of service in Singapore. This encompasses those employed on a permanent, part-time, or casual basis. For SCs or SPRs working overseas, CPF contributions are not mandatory​​.

How CPF Works

Contributions to the CPF are made by both employers and employees. The amount contributed depends on the employee’s age, with rates ranging from 12.5% to 37% of monthly wages for those earning more than $750. These contributions are allocated into three accounts: the Ordinary Account (OA), used primarily for housing and investment; the Special Account (SA), for retirement and investment in retirement-related financial products; and the MediSave Account (MA), for healthcare expenses​​.

At the age of 55, a Retirement Account (RA) is created, into which savings from the OA and SA are transferred to form the retirement sum. The CPF system is designed to provide a foundation for retirement, with the Basic Retirement Sum (BRS) set to ensure monthly payouts in retirement to cover basic living expenses​​.

CPF for Permanent Residents

For PRs, CPF contributions start from the date their PR status is approved. However, to ease the transition, PRs and their employers contribute at a reduced rate for the first two years, gradually moving to full contribution rates in the third year​​.

Foreigners and Voluntary CPF Contributions

As of the information available, foreign employees who are not PRs are not eligible to contribute to the CPF. The system is specifically designed to support Singapore Citizens and Permanent Residents. Therefore, foreign workers without PR status cannot make voluntary contributions to the CPF​​.

Utilizing CPF Funds

CPF savings can be used for various purposes, including purchasing a home, covering medical expenses, and ensuring a steady stream of income during retirement. The CPF also offers various schemes like CPF LIFE, an annuity that provides lifelong monthly payouts, and other support schemes for reduced life expectancy and immediate needs​​.

Interest rates within CPF accounts are attractive, with the Ordinary Account earning a minimum of 2.5% per annum, and the Special, MediSave, and Retirement Accounts earning a minimum of 4% per annum. Enhanced interest rates are provided for members aged 55 and above, with up to 6% on the first $30,000 of their combined CPF balances​​.


The CPF system is a cornerstone of Singapore’s social security, designed to ensure financial security for its citizens and PRs in their retirement, healthcare, and housing needs. While it offers comprehensive benefits for SCs and SPRs, it currently does not accommodate voluntary contributions from non-PR foreign workers, emphasizing its role as a national scheme aimed at supporting Singaporeans and Permanent Residents in their retirement years.

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