Introduce Yourself to CPF

Most definitely it’s sweet to know that you can depend on something once you retire—an amount that will be enough to cover your needs, including medical expenses, without having to work some more.

Singapore is one country that has been conscious about the elderly. They want to ensure that once you reach the age of your retirement, you can live comfortably and, in fact, pay off a lot of your huge bills, such as your mortgage.

They are able to achieve this by establishing CPF or Central Provident Fund. This fund is currently regulated and developed by the CPF Board. It offers plenty of great schemes and services to Singaporeans especially to those who are already in their retirement age.

What Is CPF?

CPF is a social security savings program established by the government. This way, those who are already old can enjoy long, healthy, and comfortable life once they’re already officially retired from their jobs.

Based on their studies, the life span of Singaporeans has dramatically increased. More than 67 percent of the sixty-five-year-olds would live for more than 80 years old, while 47 percent of them will add 5 more years into their life span.

However, as the year progresses, only a few active people will be able to financially support the needs of the elderly. Thus, the government has to step up by coming up with the said plan.

Every workings Singaporean is enrolled to the CPF. To start funding your own account, you and your employer will contribute. Your savings will earn 2.5 percent. This is fully guaranteed by the Singaporean government and totally risk free.

There are three types of accounts that will be sustained by your CPF. First you have the Medisave account, which takes care of all your health care needs, such as the medical insurance and hospitalization. Then you have the Special Account, which can be used if you wish to pursue investments such as annuities. There’s also the ordinary account, which you can make use to settle a mortgage, buy a property, or fund an investment or education. You can also use the money to pay off your CPF insurance.

CPF savings can also be withdrawn if you can no longer work because of disability or you’re moving out of the country or West Malaysia.

Besides the above-mentioned interest, you also earn interest from these specific accounts. For example, Medisave’s interest rate is at 4 percent. If you can maintain at most $20,000 in the ordinary account and $60,000 in your entire account, you will earn an additional 1 percent as interest.

CPF Minimum Sum Scheme

By the time you reach the age of 55, you will be allowed to start withdrawing from your CPF. However, to make sure that you don’t abuse the system, waste your money, and end up with nothing by the time you’re older, the government has set up the Minimum Sum Scheme (MSS).

This means only a portion of your CPF can be withdrawn when you reach 55, and that’s after you have fulfilled the requirement for the minimum sum. In 2003, the minimum sum was pegged at $80,000, but it is being increased, and by 2013, the minimum sum will already be $120,000. If you cannot reach the minimum amount, then your house will automatically be pledged up to 50 percent of your required minimum sum.

The requirement also doesn’t end there. Once you reach the required minimum sum, you then have to set aside a portion of your funds from CPF to meet the Medisave Required Amount, which is already at $22,500 by January 2010. It will go up to 25,000 by 2013.

If you cannot meet the required amount for your Medisave, then you have to use whatever is at your ordinary accounts after you have deducted your minimum sum.

Topping-Up Scheme

This is in relation to the minimum sum scheme. If you’re earning more than your spouse, siblings, or even parents and grandparents, you can actually top up their own retirement account. In recognition of your efforts, you can request for at tax relief of no more than $7,000 every year.

However, there are some requirements. First, the salary of the siblings or spouse should be at most $4,000 the previous year or currently disabled. Moreover, the top-up amount should be paid in cash.

The topping-up scheme is also applicable to you, as well as to those who are below 55 years old through their Special Accounts.

There are more services and schemes you need to know about CPF. They will be extensively covered later.

Singapore does know how to take care of its people, provided you also do your best to contribute to its economy. By now, though, you have a good idea while a lot of expatriates would like to settle in the country for good and become citizens. AJAX ev

Understanding Cost of Living in Singapore

Despite being a very small country, Singapore is one of the most expensive countries not only in Asia but also in the entire world. Based on the 2009 Mercer’s survey for cost of living, Singapore occupied the tenth spot, along with Tokyo, Beijing, and Hong Kong.

However, Singapore is also a land of a thousand opportunities, and the government takes care of its people well. Moreover, as long as you know how to budget your money, you may find living in Singapore manageable.

Here’s the typical cost of living in Singapore:


A great deal of your money will definitely go to your housing unit. You do have a lot of options when it comes to your home. You have the HDB flats, apartments, condominiums, landed properties, terrace houses, and even old houses. Plenty of expatriates would purchase the old ones, especially the black-and-white homes, because of their distinctive look and history.

If you’re not really picky and trying to save, start looking for HDB flats. They are very cheap. You may find a flat worth 400 SGD. You also have several options to choose from: one-bedroom to executive flats. If you want modern luxury, head to apartments and condominiums including 24-hour security but ready to spend several thousands of dollars every month.

Rental fees also tend to go much higher if you want prime spots, such as those near offices.


You will never go hungry when you’re in Singapore as food is abundant and very varied. Usually you will spend around 200 SGD every month for your food, unless you love to eat out in classy restaurants and drink wine. You can also go cheap if you simply purchase the ingredients from the local farmers’ market. If you prefer seafood, go to the port and get the fresh ones for an affordable price. Hawker centers can already feed a family of four for only 25 SGD.

You may want to settle with water and juices as beer and wines are expensive in the country. Better yet, be mindful of coupons usually published in the newspaper. You can use them to further reduce retail prices.


Most people walk in Singapore because bus stops are found in certain locations only. They also don’t prefer to use a car. Owning a car in Singapore can be a huge financial burden. If you’re getting a brand-new car from Japan or Europe, the total cost can go as much as 90,000. You also have to pay a lot of taxes and compete for COE or certificate of eligibility, which may cost you another thousand. The COE is good for only 10 years. You also have to think about your fuel and parking fee.

Singapore has a very extensive transportation system, so you don’t have to worry about getting to any destination. You simply need to purchase a pass that you can already use for all modes of public transport. It’s reloadable. If you love to ride a taxi, you will spend close to 400 SGD. If you prefer buses, you will spend less than a hundred.


The cost of education will depend on where you’re from. If you’re from Europe or the United States, you will find the fees to be affordable. If you’re from another Asian country, it will be a shock for you. Needless to say, Singapore education is widely regarded all over the world. It’s worth pursuing.

If you’re a student, you may spend more than a thousand Singapore dollars every year. This doesn’t include the course fees. Nevertheless, you can apply for an education loan in a bank, provided you are eligible to do so. You need to obtain student’s pass and a student visa. International schools for kids may cost around 6,000 SGD every year.


If you don’t have a small kid and you’re not around for most of the time, it’s best not to employ a maid, since it’s an additional cost for you. However, just to give you an idea should you decide to have one, the salary every month is over $300, depending on where she came from and her experience. You also need to pay a maid levy to the government, along with an agency fee. There’s also a bond protector, maid insurance, and maid loan. 


If you want to save, go about renting rooms only. This way, the total cost of utilities can be divided among the people in the house. If you’re just living alone, though, you may spend a hundred for your household utilities and 50 for your mobile phone. Internet access will cost you 50 SGD.

By knowing how much to spend in Singapore, you will have an idea how much money you need. You can also use this as a guide when coming up with a good salary figure.  

Do You Need A Singapore Dollar Fixed Deposit Account

The best investment option isn’t always the most obvious choice. Most of the time, the one that can offer you the most significant, but not necessarily the biggest return of investment, will probably have a number of risks in relation to its benefits. Fixed deposit accounts work in this respect.

Understanding Fixed Deposit Account

Fixed deposit account is a high security investment wherein the account holder deposits a specific amount of money to earn a specific interest rate. In Singapore, a number of banks and financial institutions require individuals to deposit an initial sum of 5,000 Singapore dollars, although this amount may vary from institution to institution.

Unlike the usual savings account, fixed deposit account holders will not be able to withdraw the money before the maturity date. Some institutions allow premature withdrawals, but at a cost.  The longer the maturity period of the fixed deposit account, the bigger the return on investment. In Singapore, only those aged 21 and above can open a fixed deposit account. The account holder has the choice of receiving the return on investment in lump sum, i.e. right after the maturity date, or getting the interest of the principal amount monthly, which is a good option for retirees looking for a stable and safe financial plan. The latter option, however, may not be widely available.

Advantages and Disadvantages

The main benefit of a fixed deposit investment is security. Because fixed deposits in Singapore is regulated, this investment option is highly controlled, and more importantly, safe.

Fixed deposits also offer a significant return on investment. The collected interest rate from the fixed deposit principal is lower than the amount you can receive if you invest your money in the stock market. Stock market is flimsy and often unpredictable, one big loss in a stock market investment means you could end up losing every cent invested. In fixed deposits, there is no actual loss, since the bank or company that holds your fixed deposit is required by the law to give you the pre-determined interest for your investment as per contract.

This does not mean that fixed deposits are without disadvantages. In a fixed deposit investment, the ROI (Return on Investment) you will receive after the maturity date is pre-set according to the interest rate agreed upon during the initial deposit. It will not reflect inflation. The actual amount you will receive remains the same but its value will decrease due to inflation.

Imagine that at the time of your deposit, your money is earning seven cents per annum and the inflation is at three cents. At the time of the maturity rate, inflation is at four cents. When you get your earnings, your returns adjusted to inflation will only be three cents (7-4); had the rate stayed constant, your returns should be four cents (7-3). Inflation can be accurately predicted. While inflation forecast may not always be exact, fixed deposit account holders still have a way of predicting the value of the money they will receive, dispelling the misconception that fixed deposits are blind investments.

Dos and Don’ts of Fixed Deposit Investment

It is important to make sure that you are investing your money in the right institution. Banks, in general, are safe. Private companies may offer bigger return on investment for your principal deposit, but the risks may be more significant. When placing your money on a fixed deposit in a private company, do a prudent research on the company’s credit rating and financial history. If possible, ask for the help from an industry regulator. Be cautious and avoid fixed deposit plans with extremely high interest rates.

Fixed deposits may not offer the biggest return on investment, but the option does offer one of the safest and most secured investment return schemes. When you take your taxes into account, fixed deposits can even provide bigger returns, specifically for those in the high income brackets. T