Covid-19 is an unfortunate event that nobody would have thought of. Like everyone else, I was stuck at home during CB, so I spent more time reading, especially on financial knowledge to enrich myself. And I found a piece of information that I think is really meaningful to share here.
CPF for Retirement
We often hear others complaining about how our money is stuck in our CPF account and we are left with no liquidity.
Even though the CPF Scheme is not 100% perfect, I honestly feel that there are more pros than cons if we look from a long term perspective. We are getting a 2.5% interest per annum in the ordinary account (OA) by merely placing our money inside. For the Special and Medisave Account (SMA), the current rate is 4% per annum. Although there is a cap to how much you can save in your MA. Further, these savings are almost risk-free compared to many other high-returns financial products out in the market.
CPF Matched Retirement Savings Scheme (MRSS)
For those of you who are planning for your parent’s retirement, this might be a deal for you!
The government came out with a new scheme earlier this year (2020) to help senior citizens who have not met their Basic Retirement Sum to save up for more retirement.
This new scheme, known as the Matched Retirement Savings Scheme will be implemented in 2021.
Under the MRSS, the Government will match every dollar of cash top-ups made to eligible members under the CPF Retirement Sum Topping-Up scheme up to an annual cap of $600. Criteria to meet
Eligibility Criteria of CPF Matched Retirement Saving Scheme
| Age | 55 to 70 (both inclusive) |
| Retirement Account Savings* | Less than the Prevailing Basic Retirement Sum (BRS). The prevailing BRS for 2021 is $93,000 |
| Average Monthly Income | Not more than $4,000 (covers a majority of senior workers) |
| Annual Value of Residence | Not more than $13,000 (covers all HDB flats) |
| Property Ownership | Own not more than one property |
Credit: CPF Board
The MRSS will run for 5 years which means the account can grow from $3000 to $6000 if you put in $600 every year.
CPF Board is also flexible with who the contributor is. You can top up for your parents, parents-in-law, grandparents, grandparents-in-law, and siblings. Even employers can perform top-ups for their elderly employees.
Tax Relief
On top of this, you get to enjoy tax-relief for this cash top-ups to CPF. If your loved one’s account has not met the basic retirement sum, this will be another good reason to top up for them.
Just remember that there is a cap of $7,000 for tax-relief per calendar year under the Retirement Sum Topping-Up Scheme, as well as a personal income tax relief cap of $80,000 that will apply to the total amount of all tax reliefs claimed, including any relief on cash top-ups made under the RSTU Scheme.
This is a 100% gain and definitely beneficial for the seniors who do not meet the Basic Retirement Sum.
If you happen to know any 1 out of the 435,000 Singaporeans who are eligible for the CPF Matched Retirement Saving Scheme, please share with them!
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