Increase in CPF Contribution rates from January 2023

Discuss about getting a well paid job or career advancement. Ask about salaries, expat packages, CPF & taxes for expatriate.
Post Reply
User avatar
abbby
Manager
Manager
Posts: 1703
Joined: Thu, 21 Jul 2005 3:00 am
Answers: 2
Location: Tiny Island

Increase in CPF Contribution rates from January 2023

Post by abbby » Mon, 27 Jun 2022 9:30 am

Mainly applies to ages 55-70 years old

https://www.cpf.gov.sg/employer/infohub ... tributions
The secret of life is honesty and fair dealing. If you can fake that, you've got it made. - Groucho Marx (1890-1977)

Lisafuller
Director
Director
Posts: 3177
Joined: Sat, 07 Nov 2020 11:45 pm
Answers: 3

Re: Increase in CPF Contribution rates from January 2023

Post by Lisafuller » Tue, 28 Jun 2022 2:30 am

I guess it’s just to try and beef up their retirement funds in their last few years of employment.

User avatar
PNGMK
Moderator
Moderator
Posts: 8587
Joined: Thu, 21 Mar 2013 9:06 pm
Answers: 1
Location: Sinkapore

Re: Increase in CPF Contribution rates from January 2023

Post by PNGMK » Tue, 28 Jun 2022 8:36 am

It's long long overdue. The gahmen slashed the rates back in the recession before the last one and it's taken decades to have these rates come up. It had really hit the retiring boomer generation.
I not lawyer/teacher/CPA.
You've been arrested? Law Society of Singapore can provide referrals.
You want an International School job? School website or http://www.ISS.edu
Your rugrat needs a School? Avoid for profit schools
You need Tax advice? Ask a CPA
You ran away without doing NS? Shame on you!

User avatar
sundaymorningstaple
Moderator
Moderator
Posts: 39423
Joined: Thu, 11 Nov 2004 1:26 pm
Answers: 10
Location: Retired on the Little Red Dot

Re: Increase in CPF Contribution rates from January 2023

Post by sundaymorningstaple » Tue, 28 Jun 2022 1:59 pm

Yep! That's for damned sure! Kept waiting for it to go back to 20:20 and it never did. As I got older and older they raised the rates in dribbles and drips and always for the ages groups below where ever I happened to be. Being a senior here is funny, on the one hand gahmen like to 'look like' they are helping but actually, it's only for show with nothing serious to go with.
SOME PEOPLE TRY TO TURN BACK THEIR ODOMETERS. NOT ME. I WANT PEOPLE TO KNOW WHY I LOOK THIS WAY. I'VE TRAVELED A LONG WAY, AND SOME OF THE ROADS WEREN'T PAVED. ~ Will Rogers

Lisafuller
Director
Director
Posts: 3177
Joined: Sat, 07 Nov 2020 11:45 pm
Answers: 3

Re: Increase in CPF Contribution rates from January 2023

Post by Lisafuller » Wed, 29 Jun 2022 1:38 am

PNGMK wrote:
Tue, 28 Jun 2022 8:36 am
It's long long overdue. The gahmen slashed the rates back in the recession before the last one and it's taken decades to have these rates come up. It had really hit the retiring boomer generation.
Can imagine that over time the loss of contributions would really add up (and come back to bite their old a*ses in the future).

Lisafuller
Director
Director
Posts: 3177
Joined: Sat, 07 Nov 2020 11:45 pm
Answers: 3

Re: Increase in CPF Contribution rates from January 2023

Post by Lisafuller » Wed, 29 Jun 2022 1:39 am

sundaymorningstaple wrote:
Tue, 28 Jun 2022 1:59 pm
Yep! That's for damned sure! Kept waiting for it to go back to 20:20 and it never did. As I got older and older they raised the rates in dribbles and drips and always for the ages groups below where ever I happened to be. Being a senior here is funny, on the one hand gahmen like to 'look like' they are helping but actually, it's only for show with nothing serious to go with.
To me I think it is most important for contribution rates to be highest when one is at the prime of their careers, force them to save more when they are making the most and they will have a lot to fall back on when they are older. But I do see the value in increasing contributions during the last lap of one’s career.

User avatar
malcontent
Editor
Editor
Posts: 1436
Joined: Sat, 22 Dec 2007 11:52 am
Answers: 1
Location: Pulau Ujong

Re: Increase in CPF Contribution rates from January 2023

Post by malcontent » Wed, 29 Jun 2022 8:52 am

It actually makes a lot more sense to have smaller CPF contributions at younger ages and larger contributions when older.

In the US, those under 50 can contribute a maximum of $20,500 to a 401(k) in 2022. Those age 50 and older can add an extra $6,500 per year in "catch-up" contributions, bringing total 401(k) contributions for 2022 to $27,000. These contributions are usually matched by the employer to various extents.

On top of that, each working adult can contribute up to $6,000 ($7,000 if over 50) to an IRA. Both the 401(k) and IRA have far better investment options than you could ever dream of compared to CPFIS or SRS.

This is one thing I’ve really missed out on versus my US counterparts.
It’s not what happens to you, but how you react to it that matters ~ Epictetus

NYY1
Regular
Regular
Posts: 141
Joined: Mon, 21 Mar 2022 10:41 pm
Answers: 1

Re: Increase in CPF Contribution rates from January 2023

Post by NYY1 » Wed, 29 Jun 2022 9:35 am

malcontent wrote:
Wed, 29 Jun 2022 8:52 am
It actually makes a lot more sense to have smaller CPF contributions at younger ages and larger contributions when older.
#1. That assumes everyone continues on an upward earnings trajectory for 30-40 years but unfortunately not everyone does. Further, once you have some type of lifestyle set (mortgage, etc) it is difficult to change so much. Hence, earning less in the later years often equates to saving less as some costs are viewed as "fixed" (even though they aren't truly fixed). If people don't save or don't save enough when they can, then either directly or indirectly they become a public liability.

#2. The CPF contributions are %, not fixed dollar amounts. Hence, for the first decade or two most will be saving more over time just as the wage base increases (if not already at the cap). In the outer years, if you are fortunate, the declining % will be counterbalanced by an increasing wage base. If you are not as fortunate, I guess you are still putting something aside while having a bit more breathing room to try and make everything tie out at the end of the month.

User avatar
PNGMK
Moderator
Moderator
Posts: 8587
Joined: Thu, 21 Mar 2013 9:06 pm
Answers: 1
Location: Sinkapore

Re: Increase in CPF Contribution rates from January 2023

Post by PNGMK » Wed, 29 Jun 2022 9:51 am

NYY1 - most of here earn well above the cap on CPF (if not in salary then from investments and businesses). It's very annoying. I'd happily put in 100k a year into CPF if I could.

Lisa... how could refer to our old asses? Man I am so offended ;)
I not lawyer/teacher/CPA.
You've been arrested? Law Society of Singapore can provide referrals.
You want an International School job? School website or http://www.ISS.edu
Your rugrat needs a School? Avoid for profit schools
You need Tax advice? Ask a CPA
You ran away without doing NS? Shame on you!

therat
Reporter
Reporter
Posts: 883
Joined: Thu, 04 Sep 2008 2:23 pm

Re: Increase in CPF Contribution rates from January 2023

Post by therat » Wed, 29 Jun 2022 10:16 am

when get older, more commitment which need more cash on hand if % increase on the older age

I think same % across all age might be the best

NYY1
Regular
Regular
Posts: 141
Joined: Mon, 21 Mar 2022 10:41 pm
Answers: 1

Re: Increase in CPF Contribution rates from January 2023

Post by NYY1 » Wed, 29 Jun 2022 10:17 am

PNGMK wrote:
Wed, 29 Jun 2022 9:51 am
NYY1 - most of here earn well above the cap on CPF (if not in salary then from investments and businesses). It's very annoying. I'd happily put in 100k a year into CPF if I could.
I see. I thought based on the median household income there would likely be a reasonable number of people below the cap. But yes, if well educated and in some professional field or have your own business it is not that difficult to exceed the cap relatively early in one's working career.

I guess my general point was the increasing $ contributions work well as long as one continues on an upward tend with no bumps. But that isn't such a safe path these days.

User avatar
malcontent
Editor
Editor
Posts: 1436
Joined: Sat, 22 Dec 2007 11:52 am
Answers: 1
Location: Pulau Ujong

Re: Increase in CPF Contribution rates from January 2023

Post by malcontent » Wed, 29 Jun 2022 1:12 pm

S$37,740 combined employee and employer contribution limit is just way too little and is not keeping up with inflation.

The combined employee and employer contribution to a 401(k) is US$61,000 (below 50) in 2022 and increases annually with inflation.

On top of 401(k), Social Security paid an average $1657 (S$2300) per month in 2022, substantially higher than CPF LIFE, and it’s adjusted for inflation each year.
It’s not what happens to you, but how you react to it that matters ~ Epictetus

NYY1
Regular
Regular
Posts: 141
Joined: Mon, 21 Mar 2022 10:41 pm
Answers: 1

Re: Increase in CPF Contribution rates from January 2023

Post by NYY1 » Wed, 29 Jun 2022 1:18 pm

I would suggest you take a look at what portion of the population can save (and does save) those amounts. If you are above those levels you don't have a problem; just save/invest in any account.

User avatar
PNGMK
Moderator
Moderator
Posts: 8587
Joined: Thu, 21 Mar 2013 9:06 pm
Answers: 1
Location: Sinkapore

Re: Increase in CPF Contribution rates from January 2023

Post by PNGMK » Wed, 29 Jun 2022 2:29 pm

NYY1 wrote:
Wed, 29 Jun 2022 1:18 pm
I would suggest you take a look at what portion of the population can save (and does save) those amounts. If you are above those levels you don't have a problem; just save/invest in any account.
It's enforced savings. By not adjusting it upwards regularly against inflation the entire country goes into risk.
I not lawyer/teacher/CPA.
You've been arrested? Law Society of Singapore can provide referrals.
You want an International School job? School website or http://www.ISS.edu
Your rugrat needs a School? Avoid for profit schools
You need Tax advice? Ask a CPA
You ran away without doing NS? Shame on you!

User avatar
PNGMK
Moderator
Moderator
Posts: 8587
Joined: Thu, 21 Mar 2013 9:06 pm
Answers: 1
Location: Sinkapore

Re: Increase in CPF Contribution rates from January 2023

Post by PNGMK » Wed, 29 Jun 2022 2:30 pm

NYY1 wrote:
Wed, 29 Jun 2022 10:17 am
PNGMK wrote:
Wed, 29 Jun 2022 9:51 am
NYY1 - most of here earn well above the cap on CPF (if not in salary then from investments and businesses). It's very annoying. I'd happily put in 100k a year into CPF if I could.
I see. I thought based on the median household income there would likely be a reasonable number of people below the cap. But yes, if well educated and in some professional field or have your own business it is not that difficult to exceed the cap relatively early in one's working career.

I guess my general point was the increasing $ contributions work well as long as one continues on an upward tend with no bumps. But that isn't such a safe path these days.
You hit the contribution limits at 6k per month. That's the salary a young engineer makes after a few years. It is WAY too low.
I not lawyer/teacher/CPA.
You've been arrested? Law Society of Singapore can provide referrals.
You want an International School job? School website or http://www.ISS.edu
Your rugrat needs a School? Avoid for profit schools
You need Tax advice? Ask a CPA
You ran away without doing NS? Shame on you!

Post Reply
  • Similar Topics
    Replies
    Views
    Last post

Return to “Careers & Jobs in Singapore”

Who is online

Users browsing this forum: No registered users and 13 guests