What are some good points about CPF? What if I do not have CPF? - Seedly
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Asked on 04 Feb 2020

What are some good points about CPF? What if I do not have CPF?

Why is CPF necessary? Why did the government implement CPF?


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Shengshi Chiam, CFA
Shengshi Chiam, CFA, Personal Finance Lead at Endowus
Level 6. Master
Answered on 05 Feb 2020
  1. CPF Mandatory Contribution are not taxed

  2. CPF monies are protected from people you owe monies from

Are you asking because you are a freelancer and you are not obliged to contribute to CPF?


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CPF allows you to own a home, afford medical fees, retire, and send your kids to a local uni.

It provides a guaranteed rate of return higher than anything available for a similar risk. Forces you to contribute but also gets your employer's to contribute, boosting your income, and splits the money into the various accounts and adjusts their contribution rates as you grow older.

So if you don't have CPF, I'd assume either you are self-employed, a non-working spouse, or a foreigner.

If you're self-employed, it may be good to make sure you set money aside by yourself and follow the concepts that CPF provides which would be to save for your home, save for your retirement, save money for future medical needs, and save money for your child's education.

Using products like bonds, endowment plans, and annuities can help you do the above.

If you're a non working spouse, you can consider speaking to your spouse to transfer some of their CPF to yours.

If you're a foreigner, you can either start something back home, or utilise the Supplementary Retirement Scheme to also save on tax.


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