It is a compulsory benefit account that Singaporeans use to pay for their retirement and healthcare costs. Both employee and employer have to contribute an equal amount to the CPF account.
It was initiated in 1955 as a system of forced retirement savings. Although the CPF was controversial when first introduced, with considerable opposition to a forced retirement program.
In Singapore, citizens can begin making withdrawals from their retirement accounts at age 55. Like the Social Security system in the U.S., claiming benefits before that time means reducing the amount of money received.
Employers and employees contribute monthly to the CPF, which the government manages. The CPF is invested conservatively to earn around 5% annual interest. In 1968, it started to provide housing under the Singapore Public Housing Scheme, which allowed families to buy their own homes. In the 1980s, the CPF program expanded again to provide medical coverage for all participants.
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