CPF top-ups have always been a valuable method for increasing your retirement savings and those of your loved ones. Now, with the introduction of CPF’s Matched Retirement Savings Scheme (MRSS), you can enhance your CPF Retirement Account (RA) and receive extra support from the government.
The MRSS offers eligible individuals up to S$600 per year through a dollar-for-dollar matching grant from the Singapore government. Unlike the Retirement Sum Topping-Up Scheme (RSTU), which is available to all, MRSS is specifically designed to assist seniors who have not yet reached the Basic Retirement Sum (BRS).
In this article, we’ll explain how MRSS can help you and your loved ones achieve your retirement planning goals and provide a straightforward guide on how to make top-ups for yourself, your parents, or other eligible family members.
Understanding the Matched Retirement Savings Scheme (MRSS)
The Matched Retirement Savings Scheme (MRSS) is a government initiative designed to assist senior Singaporeans in enhancing their retirement savings. Launched in 2021, MRSS offers a structured way for eligible individuals to boost their CPF Retirement Account (RA) with the added benefit of a dollar-for-dollar matching grant from the government.
Here’s how MRSS works:
- Matching Grant: When you make a cash top-up to your CPF RA, the government provides a matching grant equal to the amount of your contribution, up to S$600 per year. This means if you contribute S$600, you receive an additional S$600 from the government, effectively doubling your contribution.
- Annual Cap: The scheme allows you to receive up to S$600 in matching grants each year, with a total potential grant of up to S$3,000 over the five-year period of the scheme, which runs until 2025.
- Automatic Credit: The matching grant is credited to your CPF RA at the beginning of the following year. For example, if you make a top-up in 2022, you’ll receive the matching grant in early 2023, regardless of whether your top-up was a lump sum or spread out over several months.
- Eligibility Notification: You do not need to apply separately for MRSS. Eligible individuals are automatically notified at the start of each year based on their CPF account balance and other criteria.
This scheme is specifically aimed at helping seniors who have not yet reached the Basic Retirement Sum (BRS), thereby increasing their monthly retirement payouts and ensuring a more secure financial future during their retirement years.
Who Qualifies for MRSS?
The Matched Retirement Savings Scheme (MRSS) is targeted at senior Singaporeans who need assistance in reaching the Basic Retirement Sum (BRS) to secure their retirement. To be eligible for MRSS, individuals must meet the following criteria:
- Singapore Citizenship: You must be a Singapore citizen.
- Age Range: You must be between 55 and 70 years old as of December 31 of the assessment year. This means your age must fall within this range to qualify.
- Retirement Account Balance: Your CPF Retirement Account (RA) savings must be less than the current BRS. This is a key criterion as MRSS aims to help those who have not yet reached this threshold.
- Income Ceiling: Your average monthly income must not exceed S$4,000. This limit is designed to target lower-income seniors who may need more support.
- Property and Residence: The annual value of your residence should not exceed S$13,000. Additionally, you should own no more than one property. These conditions ensure that the scheme benefits those who may have fewer financial resources.
Additional Points:
- If you do not meet the eligibility criteria, you can still assist eligible family members, such as elderly parents, by making top-ups to their CPF RA.
- Eligibility is reviewed annually, so changes in your income or residence status could potentially make you eligible in future years.
You can check your eligibility status through your CPF Retirement Dashboard or the CPF eligibility checker to see if you qualify for MRSS and to stay updated on any changes.
How to Make a Top-Up
You can make MRSS top-ups anytime throughout the year, either as a lump sum or through smaller monthly contributions, up to a maximum of S$600 annually. Top-ups must be made in cash and can be done via:
- CPF Mobile App
- myCPF Online Services
- GIRO
MRSS vs. RSTU: Key Differences
Both the Matched Retirement Savings Scheme (MRSS) and the Retirement Sum Topping-Up Scheme (RSTU) are designed to enhance retirement savings through CPF top-ups. However, they serve different purposes and have distinct eligibility criteria and benefits. Here’s a breakdown of the key differences between MRSS and RSTU:
1. Eligibility
- MRSS:
- Only senior Singaporeans who have not met the current BRS and other specific criteria can receive the matching grant
- RSTU:
- All Singaporeans and PRs can receive top ups, up to the FRS if you are below 55 and up to the ERS if you are 55 and above 55
2. Benefits
- MRSS:
- Dollar-for-dollar matching grant of up to S$600 per year
- Can enjoy tax reliefs under RSTU
- Enjoy up to 6% interest p.a. on CPF savings
- RSTU:
- Tax reliefs of up to S$16,000: S$8,000 for cash top-up to yourself and another $8,000 for cash top-ups to loved ones
- Enjoy up to 6% interest p.a. on CPF savings
3. Top-Up Methods
- MRSS:
- Cash Only: Top-ups must be made in cash only.
- Account: Top-ups can only be made to the RA.
- RSTU:
- Cash and CPF Transfers: Allows both cash top-ups and transfers from other CPF accounts (Special Account or Ordinary Account).
- Accounts: Top-ups can be made to the Special Account (SA) and Retirement Account (RA)
4. Purpose
- MRSS:
- Primary Goal: Aims to assist senior Singaporeans who have yet to meet the Basic Retirement Sum.
- Focus: Provides targeted support to those who are at risk of insufficient retirement savings.
- RSTU:
- Primary Goal: Benefits all Singaporeans and PRs to boost their retirement savings and benefit from tax reliefs.
- Focus: Provides a broader range of individuals with the opportunity to increase their retirement savings through tax incentives and interest benefits.
Beyond MRSS: Growing Your Retirement Funds
While the Matched Retirement Savings Scheme (MRSS) offers significant benefits for senior Singaporeans, it is essential to explore additional strategies to further enhance your retirement savings and secure a more comfortable future. Here are some key approaches to consider beyond MRSS:
1. Supplement Your CPF Savings
Utilize the Retirement Sum Topping-Up Scheme (RSTU):
- RSTU allows you to make top-ups to your CPF accounts beyond MRSS. You can top up your Special Account (SA) or Retirement Account (RA) and benefit from tax reliefs of up to S$16,000 annually.
- This scheme is open to all Singaporeans and PRs, regardless of age, providing an opportunity to increase your CPF balance and enjoy higher interest rates.
Contribute to Supplementary Retirement Scheme (SRS):
- The SRS is a voluntary scheme that offers tax benefits for contributions made to your SRS account. You can use these funds to invest in various financial instruments, providing potential growth for your retirement savings.
- SRS contributions are tax-deductible, reducing your taxable income and offering additional savings for retirement.
2. Invest Wisely
Explore Investment Opportunities:
- Consider investing in diversified portfolios, such as mutual funds, ETFs, or stocks, to grow your retirement funds. Investments have the potential for higher returns compared to traditional savings accounts, but they also come with risks.
- Consult with a financial advisor to tailor an investment strategy that aligns with your risk tolerance and retirement goals.
Consider Annuities:
- Annuities can provide a steady income stream during retirement. Fixed annuities offer guaranteed payouts, while variable annuities provide potential growth based on investment performance.
- Evaluate different annuity options to determine what best suits your retirement needs and financial situation.
3. Maximize CPF Life
Review Your CPF Life Plan:
- CPF Life provides monthly payouts for as long as you live. The plan you choose—Basic, Standard, or Escalating—affects the amount of monthly income you receive.
- Assess your current CPF Life plan and consider adjusting it if necessary to ensure it meets your retirement income needs.
4. Save and Budget Wisely
Create a Budget:
- Develop a comprehensive budget that accounts for all your income and expenses. A well-planned budget helps you manage your finances effectively and ensure that you are saving enough for retirement.
- Track your spending and adjust your budget as needed to stay on track with your retirement savings goals.
Build an Emergency Fund:
- Maintain an emergency fund with sufficient liquidity to cover unexpected expenses. This fund should be separate from your retirement savings and readily accessible.
5. Explore Government and Financial Support
Stay Informed About Government Schemes:
- Keep up-to-date with any new or updated government schemes that may offer additional benefits or support for retirement savings.
Seek Professional Advice:
- Engage with a financial advisor to review your retirement strategy and make informed decisions about investments, savings, and insurance. Professional advice can help you optimize your retirement planning and achieve your financial goals.
By combining MRSS with other savings and investment strategies, you can build a robust retirement fund that ensures financial security and comfort throughout your retirement years.
Conclusion
The Matched Retirement Savings Scheme (MRSS) is a valuable initiative that provides senior Singaporeans with an opportunity to boost their CPF Retirement Account (RA) through dollar-for-dollar matching grants from the government. This scheme is especially beneficial for those who have yet to meet the Basic Retirement Sum (BRS), offering both immediate financial support and long-term retirement benefits.
However, to truly maximize your retirement savings, it is essential to go beyond MRSS. Utilizing additional schemes like the Retirement Sum Topping-Up Scheme (RSTU) and Supplementary Retirement Scheme (SRS), making informed investment choices, and employing effective budgeting and saving strategies can significantly enhance your financial security in retirement.
By taking a comprehensive approach that combines MRSS with other financial planning tools and seeking professional advice, you can better prepare for a comfortable and secure retirement. Embrace these opportunities to grow your retirement funds and ensure that your golden years are supported by a solid financial foundation.
Ready to take control of your financial future?
Consider scheduling a financial health check with a Financial Advisor. Whether you’re just starting your financial journey or looking to optimize your existing plan, a Financial Advisor can provide personalized guidance tailored to your unique goals and circumstances.