The upward trend to voluntarily top-up CPF accounts continues
Since people discovered that CPF is a great way to build up their retirement funds through its attractive interest rates, there has been nan upward trend to top-up CPF accounts. Unlike when people used to rush to withdraw their CPF at 55, the movement is not to start but to top up and delay the payout age. This trend looks set to continue, going by what was seen in the past few years.
The excitement has caught on. More than 800 people have even signed up as volunteers in a programme to help spread the good news they discovered about CPF to others and to correct misconceptions.
Last year (2020). a total of 106,700 individuals topped up their CPF. That’s a more than 40% increase compared to the previous year. More members are also topping up the CPF accounts of their spouses, parents and parents-in-law. The top-up to retirement accounts went up by almost one billion dollars in 2020 compared to 2019.
Interest rates! The draw of CPF!
To enhance the retirement savings of Singaporeans, the Government pays an extra 1% interest on the first $60,000 of your combined balances (capped at $20,000 for Ordinary Accounts (OA)). This was implemented in 2008.
The Power of Compound Interest!
If you’re a self-employed person, it’s time to avail yourself to the benefits of CPF. It’s never too early to start to build up your retirement fund. The earlier you start, the more you gain from the compounding interest rates. There are no hard and fast rules. You can choose to make a one lump sum contribution yearly or several smaller contributions at various times to enjoy the compound interest rates. And tax relief.
Another benefit of voluntary contributions is the tax relief on your voluntary contributions. You enjoy tax relief for up to $7,000 cash top-up to your CPF accounts.
Double your money through dollar-for-dollar Matched Retirement Savings Scheme (MRSS)
Good news are to be shared so that no one misses out on this opportunity. Here’s one more thing to share with you. If you haven’t heard it, there is the Matched Retirement Savings Scheme (MRSS) that is meant to help senior Singaporeans who have yet to meet the Basic Retirement Sum (BRS) save more for retirement.
Check your eligibility at https://cpf.gov.sg/MRSSchecker
Here’s how it works. For 5 years from 2021 to 2025, the Government will match dollar-for-dollar, cash top-ups made to members’ Retirement Account – up to an annual cap of $600. If you or your parents are aged between 55 and 70, you qualify for the scheme if you have not been able to set aside the prevailing Basic Retirement Sum. For an annual top-up of $600 (cap), you get another $600 from the government.
Now that you’ve discovered so much about CPF, what are you waiting for? It’s time to take actions to grow your retirement fund. Join the new crowd of the enlightened!