1 / 4

How To Manage Your CPF For Your Retirement In Singapore

Have you started planning for your retirement? You need to consider how much your daily expenses are and Singapore's inflation rate.

Kevine1
Download Presentation

How To Manage Your CPF For Your Retirement In Singapore

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. How To Manage Your CPF For Your Retirement In Singapore Making a retirement plan takes a lot of research to find answers to your most burning questions. Plus, you’re never sure enough of whether you’ve saved enough for what you want. Moreover, we are all fighting against inflation. However, the CPF (Central Provident Fund) offers a strong foundation for your retirement, helping to cover the basic expenses in your golden years. In a sense, it is the backup plan for all Singaporeans. This is a helpful addition to your personal investment plans. If you don’t have one, don’t worry. You can start your investment journey here. So, read along to find out how you can manage your CPF to your advantage.

  2. You Need To Consider Your Retirement Needs Here’s the first question you should find an answer to when planning your retirement: How is my basic living covered? Singapore’s retirement age is at 65, and this number will be increased to 70 by 2030. That means you want: – Your home to be paid fully so that you have a place to live and no rent to plan for monthly. You can use that home as an extra source of income if you have the room. – Your basic healthcare coverage so that you can take care of your medical bills. As you age, you’ll face more health issues, and it’s essential to have at least the basic ones covered. – Your daily expenses should be accounted for; you don’t want to skimp on food or electricity as you’re growing older. At the same time, you never want to live with the fear of outliving what you’ve saved. These three needs are covered in CPF’s: – Ordinary Account (OA): housing, insurance, investments – Special Account (SA): in old age + retirement-related financial products – MediSave Account (MA): hospitalisation + approved medical insurance When you reach 55 years old, CPF creates your Retirement Account (RA) that gives you your monthly retirement payouts. Tip: To ensure you have more money in your CPF account, don’t pay your entire housing loan using your retirement funds. Grow Your Savings If you want to manage CPF for your retirement, you want to have enough money in your account first. But that means either having a well-paying job or investing more of your income to obtain cash for your CPF deposits.

  3. Also, you need to clear your debt. For some, they might need a loan with lower interest rates to do that. But that sounds like a pain. Here’s a secret many people don’t know: Your CPF account offers you plenty of flexible investment options that increase your savings. Some of these options are better suited for a higher risk appetite, while others are safer. Regardless of your investment style, it’s always a good idea to let your money work for you. So, here’s the deal if you’re willing to work a little and gain some financial literacy: CPF has 200+ funds ready and waiting for your investments under the CPFIS (CPF Investment Scheme). That means you can diversify your portfolio quickly to obtain an excellent interest rate. At the same time, you’ll know that the CPF funds are safer than other stocks. Here are the best tips to increase your CPF income if you’re risk-averse: – Don’t withdraw savings from your CPF account to ensure higher rates. – Make cash top-ups into your SA or RA, depending on whether you’re below or above 55. Doing this ensures higher payouts during retirement. Pro tip: Doing this ensures higher tax relief up to $7,000/year. – You can increase your interest by transferring funds from OA to SA (below 55) or SA to RA (above 55). Additionally, you’ll get more tax relief, higher retirement payouts, + monthly payouts for the rest of your life. Set Aside Your Retirement Sum Once you reach 55, the savings in your SA and OA accounts are transferred to your RA. That’s your retirement sum, so this is where you’ll get monthly payouts from. That doesn’t mean the government chooses everything for you. Here’s something you may not have known: You can choose the payout option that suits your needs best. And that means you can pre-determine the sum you want to have in your RA.

  4. Here’s why that’s important: This sum increases as more interest gets pumped into your RA. So, if you want your monthly payout at a certain level, make sure to invest more in your RA. Here are two more things to consider: – Transfer your SA/OA savings to your RA to increase your payouts. – Don’t withdraw money from your CPF account unnecessarily. CPF Life You will be automatically included in CPF Life if: – You’re born in or after 1958 – You have a minimum of $60,000 in your RA at least six months before reaching payout eligibility age (PEA) These CPF LIFE payouts that you’ll get throughout your life are essential for your retirement plan – especially if you don’t have one. Here are the factors that influence these payouts: – Your gender – Your age – Your RA savings at the moment of joining CPF Life – Your LIFE plan – CPF interest rates + mortality rates

More Related