CPF or Central Provident Fund is familiar to all working Singaporeans. Up to 20% of our salaries goes to CPF every month, and we are left with 80% of the money that we work very hard to earn.
This forced savings is part of the Government’s efforts in helping us to save money for retirement, but it has been getting some really bad reputation in recent years.
Are there things that we did not know about the CPF? Let us share 10 facts about it!
You can top up your children’s CPF accounts
Are you aware that you can top up your children’s CPF accounts once they are born? Every Singaporean will have a CPF account set up for him or her by the Government to receive the $4,000 Medisave grant. Parents with excess cash can top up their children’s CPF Special Account to let the money grow for 55 years. Imagine the compounded amount when your children hit 55 years!
You can use refund to CPF for the money used in your property purchase using cash
When Singaporeans purchase a property, we use our CPF savings to finance the house. What we know is that when we sell the property in future, we need to return the money we used plus accrued interests back to CPF. However, do you know that we can return the money using cash to CPF even if the property is unsold? Just head down to CPF, fill in a form to indicate which property you are making the refund for and you are set!
Zero balance in Ordinary Account is possible
For CPF members who want to earn more interest, it is possible to transfer all the money from your Ordinary Account (OA) to your Special Account (SA) and zero out your OA. For members below 55 years of age, the first $60,000 in the SA savings will attract 5% while the remaining balance will enjoy 4% interest if your OA is zero.
Multiple CPF Withdrawals are possible, within restrictions
Members 55 years old and older can withdraw from their CPF after setting aside their basic retirement sums. The sum of money they can withdraw will be taken from their SA first before touching the OA. Members are also not required to withdraw the excess money at one go, but can withdraw them as and when needed by submitting an application to CPF. By leaving the money in CPF, members can still enjoy the higher interest rates on cash that are not needed.
It is not necessary to make a CPF nomination
If you have not make a CPF nomination, do not fret. All CPF monies are governed by law and should any Singaporean pass away without a nomination, the savings inside your CPF will be distributed to all family members by the Public Trustee. However, if you want the savings to be distributed according to your wishes, then a CPF nomination should be made.
A will does not cover your CPF distribution after death
This is an important point to take note of. A will can cover property and wealth distribution for all assets except for your CPF distribution. As long as a Singaporean does not have a CPF nomination, the savings inside CPF will be distributed by the Public Trustee according to law.
The CPF Minimum Sum will increase every year
The CPF minimum sum is calculated based on the basic needs of a lower-middle income retirement couple. Due to the inflation rate, the minimum sum will be revised every year to reflect a realistic amount that a couple can live on without too much lifestyle changes.
You can still withdraw some money even if you have less than the Minimum Sum at 55
Even if you have less than the required Minimum Sum when you are 55 years old, CPF will still allow you to withdraw $5,000. The remainder will be paid out monthly after you hit your drawdown age until the amount is depleted unless you participate in CPF LIFE.
You can top up your family member’s CPF account to enjoy tax relief
If you have already hit your Minimum Sum in your CPF savings, you can use part of your CPF savings to top up your spouse and parent’s CPF savings. Otherwise, you can also use cash top up. Cash top up will also enjoy tax relief of up to $7,000 a year.
CPF monies are not used in Government spending
There were some hotly debated issues regarding CPF and one of the biggest one is whether our CPF monies were being used by the Government. They are not. What the Government does with the money they collected is to invest them in Special Singapore Government Securities (SSGS) that are issued and guaranteed by the Government. GIC is the governing body which manages the funds.
Always bored during your commute to and fro work or school? Here’s the best solution: download our app for new articles, Facebook videos and YouTube videos that are updated daily…and most importantly, exclusive contents that are only available in our app! It’s your perfect companion for your daily commute!
Click Here to Download the App!
This article was first published on goodyfeed.com
Read Also
- Once You Know This Secret Workout, You’ll Never Go To A Gym Again
- Here’s a Hack to Make Part-time Jobs Look for You Instead of You Looking for Part-time Jobs
Do you love writing? Do you want a platform to showcase your works? Goody Feed is looking for part-time writers to join the team! Click here to find out more!
Featured Image:Â businesstimes.com.sg
Watch this for a complete summary of what REALLY happened to Qoo10, and why it's like a K-drama:
Read Also:
- Woman Tried Bribing Officer in S’pore Immigration, Thinking It’s a M’sia Officer
- There Might Not Be Crazy Rich Asians 2 in the Near Future
- Everything About Donald Trump’s Controversial Cabinet’s Picks That Are Known So Far
- Pet-Friendly Cafe Just 10 Minutes Away From JB CIQ Has Furry Floral Decor, Pastries & Mains
- 4 Handrolls For S$4 At Japanese Handroll Bar In Duxton Road On 17 November 2024
- Everything About The Deepfake Nude Photo Scandal in S’pore Sports School
Advertisements
