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Singapore Pension System

While the pension system is Singapore is often named to be the most notable in Asia, there are still things it can learn and adapt from the more superior systems in the world.

Far advanced compared to the pension system in Japan, where experts say it needs substantial reform and to be made more sustainable, the system in Singapore still needs to pick up the pace compared to other countries. Currently, it is not part of the top ten in the world, and falls below some small countries in Latin America as well.

All of this is particularly fascinating given the average purchasing power and wages in the country are one of the highest in the world.

Specific Circumstances And Pension Requirements

Specific circumstances and pensionEven though the pension regulations themselves are simple to understand, in practice, they are made a lot more complicated when applied to individuals and their circumstances, which makes pension advice Singapore – Global Eye Singapore a useful tool.

The situation as far as the nature of the job, salary, and the makeup of the family, all directly affect how much of a contribution is required.

The Central Provident Fund (CPF), which is managed by the government, debuted as a pension scheme only initially, but has now added the aspects of housing and healthcare as well.

Contributions to the CPF are mandated, and receive sums from the employer, as well as the employee. In addition, people can also choose to add voluntary amounts to a private pension scheme, which is referred to as the supplementary retirement scheme, which also provides tax benefits.

 

While the percentage of Singaporeans who have permanent residence and are over 18 currently stands at about 70%, almost a third of the population of the country is made of expats, who cannot become part of the scheme.

This means expats have to consider becoming part of a strong employer-based pension scheme, or at least think about savings avenues and private pension schemes.

Contributions to the CPFFor people who are permanent residents in Singapore, the most notable advantage is one that was introduced comparatively recently, that is, being able to use the funds for housing and healthcare, in addition to retirement.

With all three of these major concerns taken care of, what remains is seeing whether the savings accumulated after retirement would be enough to lead a life of comfort.

Since the CPF is controlled by the government, it is open to all the usual regulatory changes and reforms national schemes are vulnerable to.

Even in the presence of certain guarantees, a lot can change on the national level depending on the financial need, as well as your individual circumstances.

In the presence of the prospect of change, and the rules that need to followed, including not being able to withdraw the lump-sum before the allowed age, many residents do well to add other saving methods to the mix, including through investment in bonds and shares, and savings accounts.