Planning for retirement is crucial, and in Singapore, the Central Provident Fund (CPF) plays a key role in ensuring financial security during your golden years. This blog post dives into the intricacies of Singapore’s retirement age and CPF contributions, helping you navigate the system with confidence.
Related Read: How the COVID-19 Resilience Package Can Back Businesses in SG »
Table of Contents
- Retirement Age in Singapore
- CPF Contribution rates
- Government Initiatives on Raising Singaporean Retirement Age
- Change in Risk Appetite Among Singaporean Seniors
Retirement Age in Singapore:
- Minimum Retirement Age: Currently, the minimum retirement age in Singapore is 63. This means that employers cannot mandatorily retire employees before this age.
- Re-employment Age: The re-employment age is 68. Employers are encouraged to offer re-employment opportunities to eligible employees up to this age.
- Payout Eligibility Age: You can start receiving your CPF payouts at any time from age 65 onwards. This is not linked to the retirement or re-employment age.
CPF Contribution rates
To align with increasing wages and enhance the retirement adequacy of senior employees, adjustments have been made to the CPF Ordinary Wage ceiling and contribution rates starting from January 1, 2024. The table below outlines the updated contribution rates for Singaporeans and Permanent Residents (PRs) in their third year and beyond, categorized by different age groups.
| Employee’s age (years) | By employer (% of wage) | By employee (% of wage) | Total (% of wage) |
| 55 and below | 17 | 20 | 37 |
| Above 55 to 60 | 15 | 16 | 31 |
| Above 60 to 65 | 11.5 | 10.5 | 22 |
| Above 65 to 70 | 9 | 7.5 | 16.5 |
| Above 70 | 7.5 | 5 | 12.5 |
Government Initiatives on Raising Singaporean Retirement Age
The government substantially had three priorities: ensuring jobs rebound in the short-term, supporting business transformation, and helping every sector of the workforce, including senior workers. All three would contribute to the larger goal of Singapore emerging stronger.
Going forward with raising the ages will give senior workers the ability to work longer and enable them to build their retirement savings for the future.
The Government pledged a $1.3 billion Senior Support Worker Package in July 2020, which allows for the Part-time Re-employment Grant and the Senior Worker Early Adopter Grant, which are intended to help employers increase the re-employment and retirement ages, respectively.
Since their announcements last year, 17,000 senior workers across 1,700 companies have been assisted. Both schemes will be increased by more than $200 million in an effort to help more than 75,000 older workers.
Related Read: How Rikvin can assist your company with recruitment in Singapore »
But the larger goal was to create the momentum and shape a new norm among employers, where many more companies raise Singaporean retirement age and re-employment age to 65 and 70, well before 2030, “A senior worker who can leave the workforce at age 70 instead of 67, and defer the start of his CPF Life payouts accordingly, can get around 20 percent more per month for life.”
Raising the CPF contributions in Singapore for workers aged 55 and over will provide larger payouts to those workers.
The CPF Transitions Offset scheme will absorb half of the increase for employers. Additionally, the Senior Employment Credit will also give up to 8 percent of wage offsets, where a possible extension will be considered.
Change in Risk Appetite Among Seniors in Singapore
There has been a noticeable shift in risk appetite among seniors in Singapore, reflecting changing attitudes towards financial strategies and investment choices. Traditionally characterized by a more conservative approach, seniors are increasingly exploring avenues that offer higher returns, acknowledging the need to optimize their financial portfolios for retirement. This change in risk appetite is influenced by factors such as a prolonged low-interest-rate environment, rising life expectancies, and a desire for greater financial independence in the later stages of life.
At Rikvin, we help companies navigate through schemes to ensure that you are benefitting from them. Engage us now on to learn more on such schemes and how you can upskill your senior employees.
FAQs
-
What will be the new Singaporean retirement age and re-employment age?
- The Singaporean retirement age and re-employment age will be raised to 63 and 68 respectively in 2022.
-
What are some government initiatives to help employers on the raising of Singaporean retirement age?
- The government has rolled out the following schemes and grants:
- $1.3 billion Senior Support Worker Package
- Part-time Re-employment Grant
- Senior Worker Early Adopter Grant
- CPF Transitions Offset scheme
- Senior Employment Credit
- $1.3 billion Senior Support Worker Package
-
What is the benefit of raising the CPF contributions in Singapore for workers aged 55 and above?
- The benefit is that raising the CPF contributions in Singapore will provide larger payouts for workers aged 55 and above.
-
What is the Lifetime Retirement Investment Scheme?
- The Lifetime Retirement Investment Scheme is for CPF members who have the risk appetite and investment horizon, but lacks sufficient investment knowledge. However, this was halted due to the changes in risk appetite among senior investors brought by the pandemic.
Engage our HR Services now!
Our HR advisors will guide you on training your senior employees to enhance business performance.
Rikvin’s content team includes in-house and freelance writers across the globe who contribute informative and trending articles to guide aspiring entrepreneurs in taking their business to the next level in Asia.
