The minimum age to start receiving payouts from the national life annuity scheme is 65.

Defined contribution

The maximum contribution is calculated based on a salary ceiling of SGD 6 300 per month for both employer and employee contributions. This ceiling level is legislated to increase to SGD 6 800 from 1 January 2024, then SGD 7 400 from 1 January 2025 and finally to SGD 8 000 from 1 January 2026.

The contribution rates vary with age as indicated below. Contributions to the Ordinary Account and Special Account are for retirement, while contributions to the MediSave Account are for medical expenses. Savings in the Ordinary Account can also be used to buy a home, but amounts withdrawn must be refunded with interest upon sale of the property.

Savings in the Ordinary Account earn a minimum interest rate of 2.5% per annum while savings in the other accounts earn a minimum interest rate of 4% per annum. Individuals below 55 years old will be paid an extra 1% interest per annum on the first SGD 60 000 of their combined balances, while individuals aged 55 and above will be paid an extra 2% interest on the first SGD 30 000 of their combined balances, and an extra 1% on the next SGD 30 000. As a result, those aged 55 and above will earn up to 6% interest per annum on their retirement balances.

At age 55, savings in the Ordinary Account and Special Account are set aside in the Retirement Account to meet the Full Retirement Sum (FRS), which is SGD 198 800 in 2023. Savings above the FRS can be withdrawn in a lump sum from age 55. Individuals who own their homes may choose to set aside half the FRS called the “Basic Retirement Sum” (SGD 99 400 in 2023). There is also an “Enhanced Retirement Sum” (SGD 298 200 in 2023) for those who wish to set aside a larger specified sum and receive higher monthly payouts for retirement.

Savings in the Retirement Account are used to purchase a life annuity for the member. The amount of Ordinary Account savings the individual uses to buy a home affects the total amount of savings available to purchase the life annuity and in turn the retirement payouts received. As such, the modelling results below are based on Retirement Account savings from the Ordinary Account, net of housing withdrawals, and Special Account savings.

For the purposes of comparing replacement rates with other countries, this report uses a standardised set of macro assumptions. These results do not take into account other institutional features unique to Singapore. For example, many homeowners in Singapore do not need to pay rent in old age, given the high home ownership rate at 89.7% nationally. In addition, elderly homeowners also have various options to monetise their public housing flat to supplement their retirement income. These options include renting out their spare bedrooms or flats, right-sizing to a smaller flat and taking up the Silver Housing Bonus scheme or selling back part of their remaining lease under the Lease Buyback Scheme (LBS). The LBS is a scheme unique in Singapore’s context and is available for all HDB flat types. As such, an alternative modelling scenario where the CPF member monetises his public housing flat in retirement via the LBS has also been provided below. In this scenario, proceeds from the lease sale are used to top up savings in the Retirement Account for a larger annuity stream.

Lower-income members receive additional support. The Workfare Income Supplement Scheme supplements the incomes and CPF savings of lower-income Singaporean workers and encourages them to work regularly. Under the scheme, eligible Singaporeans automatically receive payments of SGD 2 100 to SGD 4 200 per year, based on their age and monthly income.

Older workers receive greater support. In their retirement years, Singaporeans aged 65 and above who had low incomes and CPF contributions during their working years may qualify for the Silver Support Scheme. Under the scheme, eligible elderly Singaporeans automatically receive a quarterly cash supplement of SGD 180 to SGD 900, based on their household monthly income per person and place of residence.

From 2025, the Workfare Income Supplement Scheme and the Silver Support Scheme will be enhanced – the income threshold for scheme eligibility will be raised and eligible Singaporeans will receive higher payout quantum. Additional CPF bonuses will also be introduced to support Singaporeans born in 1973 and earlier to build up their retirement savings.

The retirement age in Singapore is age 63, but employers must offer re‑employment to eligible employees who turn 62, up to age 68.

Withdrawals

From age 55, individuals can make lump sum withdrawals of their CPF Ordinary Account and Special Account savings in excess of the Full Retirement Sum, and any Retirement Account savings in excess of the Basic Retirement Sum if they own a property. From age 65, individuals can start monthly payouts from their CPF Retirement Account. They also have the option to defer the start of their monthly payouts to age 70 and for higher monthly payouts. Individuals can receive payouts from CPF while continuing to work.

Taxation of workers

Compulsory CPF contributions are fully tax-exempt. Individuals can also receive tax relief of up to SGD 8 000 per year for voluntary contributions made by their employers or themselves to their own CPF Special or Retirement Accounts, and an additional tax relief of up to SGD 8 000 per year for voluntary contributions that they make to their family members’ CPF Special or Retirement Accounts.

Taxation of workers income

There is also tax deductible “earned income relief”, and the relief amount depends on the worker’s age as described below.

Individuals who wish to save more for their old age can participate in the Supplementary Retirement Scheme (SRS), a scheme operated by the private sector. SRS contributions are voluntary and are eligible for tax relief. Annual SRS contributions for Singaporeans and foreigners are capped at SGD 15 300 and SGD 35 700 respectively. SRS investment returns are accumulated tax-free and only 50% of the withdrawals from SRS are taxable at retirement.

For resident individuals, income tax rates and bands are as follows for income earned from 2024 onwards:

Social security contributions payable by workers

Workers make contributions to the CPF as described above.

Taxation of pensioners

There is no additional tax relief for pensioners.

Taxation of pension income

Retirement income from CPF is exempted from personal income tax.

Pensions from approved pension schemes may be taxed. The amount of pension accrued up to 31 Dec 1992 in the approved funds in Singapore is exempt from tax if the person retired at the retirement age stated in the pension or provident funds/schemes.

Pensions paid out of contributions made to the funds after 31 Dec 1992 will be taxed.

Social security contributions payable by pensioners

Individuals who work while receiving retirement income from CPF continue to make CPF contributions.