The latest figures released by Central Provident Fund (CPF) Board revealed Singapore women’s nest egg for retirement is going up at a faster pace than men’s. Experts said that this upsurge can be attributed to current shift towards women holding better-paying jobs and working longer than the old days. The easing of rules also encourages more husbands to top up their wives’ CPF savings.
For the last 10 years, women’s average balance has risen by 8.3 percent a year, against 7.7 percent a year for men. This statistic refers to savings stored in their Ordinary, Special, Retirement, and Medisave accounts. Consequently, the gap in average CPF balances between women and men narrowed from 16 percent in 2006 to 11 percent in 2016. This positive trend can be seen as a reassuring sign that women are increasingly able to better meet their retirement needs.
National University of Singapore (NUS) sociologist Tan Ern Ser said that the trend could help elder women enjoy a higher standard of living during their senior years while lowering financial pressure on their children and the national budget. He believes that these when growing up, these children would be less likely to be part of the sandwich generation (people in their 30s or 40s who take care of their aging parents while supporting their own children), and thus inclined to have more children themselves.
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The rise in women’s CPF balances is greatly affected by job-related factors, such as higher wages and the growing proportion of working women, said NUS economist Chia Ngee Choon. Meanwhile, Sociologist of the Singapore University of Social Sciences Kang Soon-Hock said there are more schemes that encourage women to remain in or return to the workforce. For example, flexible work arrangements for working mothers are now more widespread than ever.
Additionally, more husbands are contributing to their wives’ CPF savings as well, indicating the success of a move encouraged by a change in the CPF transfer rule. Last year, the minimum amount members have to save before they could transfer excess savings to their spouses was cut into half. CPF Board said that in total, the amount of $110 million moved between spouses last year, double the previous year’s amount. From these transfer last year, almost 90 percent were from men to women.
Last week, the Manpower Ministry proposed several changes to the CPF Act that aim to lower the threshold for children to transfer funds to their parents and grandparents’ accounts. Cash top-ups to CPF accounts of family members also get tax relief, Straits Times reports.
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