Singapore—According to a statement from the Central Provident Fund Board on Thursday, November 28, Singaporeans are adding to more their retirement funds, with almost S$1.6 billion in total added under the Retirement Sum Topping-Up Scheme between January and October of this year, the Straits Times (ST) reports.
This is higher than the amount from the same time in 2018, when S$1.5 billion had been added.
For 2018, a total of S$2 billion had been topped off by CPF members to their accounts, in comparison to 2015 when only S$934 million in total was added.
This particular scheme was put in place in order to aid with members building their retirement funds, or those of their loved ones, through adding to their Special Account or Retirement Account.
According to the CPF Board, “These top-ups, which comprise cash top-ups and CPF transfers, help build up members’ retirement savings. With higher CPF balances, these members would receive higher payouts in their retirement years.”
Because of these top-ups, CPF members have been able to meet the Basic Retirement Sum, and have even achieved amounts higher than this.
The board added that in the first 10 months of 2019, CPF members added over S$330 million to the accounts of their husbands, wives, parents and grandparents under the Retirement Sum Topping-Up Scheme, up by S$15 million from the same time frame in 2018.
Tan Chui Leng, the CPF Board’s group director of retirement income stated that high rates of interest and tax reliefs have led to more family members taking action to help their loved ones “retire with greater peace of mind”.
Ms Tan added, ”These top-ups need not be large amounts. With interest of up to five per cent per annum in the Special Account and up to six per cent per annum in the Retirement Account, small but regular top-ups using Giro can help enhance members’ retirement savings over time.”
The tax reliefs available for members who give toward cash top-ups for themselves or for their relatives can be as high as S$14,000 per calendar year, with CPF members needing to make their cash top-ups before 2019 ends in order to avail of the tax reliefs for next year’s tax assessment.
Aside from this incentive, early top-ups enable members to gain higher interest on their CPF savings as well.
Top-ups may be made through the myCPF mobile app. See, cpf.gov.sg/rstu to learn more about the Retirement Sum Topping-Up Scheme.
Earlier this month, Josephine Teo, the country’s Manpower Minister, announced a change of payout rules starting from next year, when payouts will only be given until a member reaches the ages of 90, instead of 95.
Feedback from Central Provident Fund (CPF) members who found the payout duration until age 95 to be too long was the cause of this change.
The shortened duration means an increase in payout amounts for members, dependent on various factors such as their current ages, circumstances, present Retirement Account balance, and the payout amount they are already receiving, as well as withdrawals or top-ups from their Retirement Accounts.
The amended ruling concerning the change in payout rules is applicable to CPF members turning 65 years old from July 1 onwards. -/TISG