CPF factor

based on singaporean case (confirmed with chatGPT, verified by myself)

• if you earn salary, you “have to” contribute (20% of first 6000sgd<vary yearly> portion of salary) to your CPF, your employer have to contribute additional (17% x your salary) into your CPF
  • thus, extra excess portion of salary beyond 6000sgd, no need to contribute to CPF for that extra excess portion
• there is also a limit on how much you need to contribute each year, (for singapore) Annual CPF contribution limit = $6,000 x 37% x 12 = $37,740
  • thus, you can conclude
    1. Only the first 6000 sgd are considered for the CPF contribution
    2. both employee and employer are contributed with ratio based on the first 6000sgd
    3. thus is no way you can contribute automatically more than 37,740sgd a year (based on current CPF rate)
    4. however, you can still manual top up CPF more than the limit,
    5. excess part still earn the prevailing interest rate of 2.5% per annum (current rate) for the OA balance
    6. excess part will not earn additional intesest for some case applicable for additional interest (like above age 55 and first 30000sgd may get additional 1% extra interest, those type of addition interest)
• there is also a total cap limit of CPF contribution, called (CPF Full Retirement Sum (FRS)), 186000 SGD, (current rate for 2023)
  • once you reach that total cap limit, you still “have to” contribute (20% of first 6000sgd<vary yearly> portion of salary) to your CPF, till age 55.
    • AS there is ONLY Hard Limit on annual contribution, there is NO Hard Limit for total CPF contribution if you are under age 55.
    • If your has reached the Full Retirement Sum (FRS) and is aged above 55, you can Finally choose to stop contributing to your CPF account. However, your employer will still be required to make CPF contributions on their behalf, (as you age up more than 55, your employer rate also drops less than 17% as well) unless you have reached the CPF Annual Limit.
  • once you reach that total cap limit early, your employer still have to contribute additional (17% x your salary) into your CPF
  • however, even you reach that total cap limit early, you have to wait till your age 65 to receive your CPF montly payout
  • also, if you reach that total cap limit early, you still can manully topup extra into your CPF account, extra part still earn the prevailing interest rate of 2.5% per annum (current rate), extra part no addition interest (like example above)
  • in addition, if you reach that total cap limit and beyond, you can withdraw the excess CPF part at any time, but any withdrawal will be subject to the prevailing CPF withdrawal policy (chatGPT said that)
• Reason to manually topup Extra beyond that total cap limit
  • tax relief, if you put your extra cash saving into CPF, you can get tax deduction for upto certain amount,
  • as low-risk investment, as CPF give you interest

Final conclusion on contribution part

• if you are under 55,
  • every year, you will have to contribute to CPF upto 37,740sgd (based on current CPF rate)
• if you are beyond 55, and reached total cpf saving of 186000 SGD (current rate for 2023)
  • you can stop contribute your part to CPF, while your employers still have to contribute their share

Final conclusion on withdraw part

• if you are beyond 55,
  • you can finally withdraw the Excess Amount above < Full Retirement Sum (FRS) 186000 SGD (current rate for 2023) >
  • but you can't withdraw RA saving
• if you are beyond 65,
  • you can start withdraw RA saving.