Maximize CPF Savings in Singapore | CPF Retirement Scheme Singapore

by Priyadarshini 9 November 2022

Because our CPF savings are one of the primary sources of retirement income, it is critical that we maximize them for our retirement years. In this blog, we tell you about how to maximize CPF savings in Singapore.

You are probably aware that the primary goal of CPF savings is to support our living expenses during retirement. However, the CPF board annually adjusts the retirement sums to keep up with inflation, which may make the target sums appear unattainable to many. As a result, if you want to receive monthly CPF income, you must understand how to build a sustainable CPF retirement income.

Maximize CPF Savings in Singapore

How to Boost CPF Retirement Savings

However, as previously stated, the FRS is adjusted annually to account for inflation. If you’re concerned that you won’t have enough CPF money to support your retirement, here are a few strategies for increasing your CPF savings.

Use the Retirement Sum Topping-Up Scheme to top up your CPF OA or transfer funds from your CPF OA to SA (RSTU)

The RSTU increases your retirement savings by allowing you to top up your own or your family’s CPF SA (for those under the age of 55) or CPF RA (for those 55 and above). You can make cash top-ups or transfer funds from your CPF OA to your CPF SA/RA. Topping up your CPF SA allows you to earn 4% interest instead of 2.5% from your CPF OA.

You’ll also be eligible for tax breaks of up to S$8,000 for top-ups to your SA/RA, and another S$8,000 if you top up your family’s CPF SA, for a total of S$16,000 in tax breaks. Only cash top-ups, however, are tax-deductible.

Contribute voluntarily to your CPF accounts

To supplement the mandatory CPF contributions you make each month, you can make voluntary cash top-ups to your CPF accounts. You can contribute to your CPF OA, SA, and MA, but the maximum amount you can contribute is limited to the CPF Annual Limit of S$37,740.

Increase your CPF savings by monetizing your home – Maximize CPF Savings in Singapore

Aside from contributing to your CPF savings, you can also monetize your home to supplement your retirement funds. Silver Housing Bonus and Lease Buyback Scheme are two options for unlocking the value of your home and increasing your CPF LIFE monthly payouts.

Silver Housing Bonus (SHB)

When you downsize to a 3-room or smaller flat purchased from HDB or the resale market, you can increase your CPF RA savings and receive a cash bonus of up to S$30,000 through the SHB. To be eligible for SHB, you must deposit S$60,000 from the sale proceeds of your home into your CPF RA.

Invest your CPF funds through the CPF Investment Scheme (CPFIS)

You can also increase the value of your CPF savings by investing in them. Through the CPFIS, you can invest your CPF OA and SA savings in various CPF-screened investments such as unit trusts, ETFs, endowment policies, ILPs, gold, and others. Remember that, as with all financial products, returns are not guaranteed, and you should invest based on your risk tolerance.

CPF savings are only one source of retirement income. While saving for the FRS or ERS is necessary to receive higher monthly CPF payouts, it is not the only source of income for retirement. While you can monetize your property to increase your CPF savings, keep in mind that you can also rent out the entire property or one of the rooms. This provides you with more flexibility without the expense of losing your lease or moving out.

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