Singapore to Raise CPF Rates and Retirement Age: National Day Rally 2019
Good news followed the National Day Rally 2019. Older workers will soon enjoy higher Central Provident Fund CPF rates and retirement age.
Singapore Prime Minister Lee Hsien Loong announced that the retirement age will be progressively raised from 65 to 70 by 2030. Over the next 10 years, CPF rates will also be gradually increased. Currently, total CPF contribution is 37 per cent for workers up to 55 years old. It drops progressively with age. However, once the new changes are completed by 2030, workers 60 years and below will enjoy full CPF rates.
Older workers will benefit from the build-up in their retirement savings, and those who want to work longer to secure greater financial independence can now do so without worry.
The Prime Minister announced these changes during the National Day Rally 2019. Prime Minister Lee said the Government fully accepted the recommendations by the Tripartite Workgroup on Older Workers. With Singapore’s life expectancy now at nearly 85 years old, many older workers wanted to remain engaged and active for longer, building bigger nest eggs in preparation for retirement.
Businesses Will Receive Support at Budget 2020
Employers have expressed concerns over the uncertain economic outlook and business costs. The Government said it will support both employers and employees. It will provide businesses with a support package to help them adjust. This will be announced at the Budget 2020 speech by Deputy Prime Minister Heng Swee Keat.
Enabling seniors to remain productive will require a joint effort. Businesses must re-design jobs, careers and training programs to cater to the strengths of the senior workforce.
Despite the higher retirement age and CPF rates, there will be no changes to CPF’s withdrawal policies. Members can still expect to withdraw part of their income at 55 years old. Monthly pay-outs will remain at the starting age of 65 years old.