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29 July 2022
SOURCE: CPF Board
Here are some ways to lend a helping hand to your parents in their retirement planning journey. Choose from 3 starting points below!
Start by having an open discussion on how they envision their retirement to be like. Do they want to travel the world, stay active in the community, or even continue working? Help them discover their purpose in life – what is it they want to pursue and work towards.
Once they have a clearer idea of what their ideal retirement is like, next is to help them take tangible steps towards that goal, starting with their CPF. One thing to consider is what CPF LIFE plan would best support their desired retirement lifestyle.
CPF LIFE provides your parents (and you) with payouts for life, no matter how long you live.
While you are at it, ask yourself the same questions. It always pays to start early, by taking advantage of the longer runway that you have.
As they make the transition towards retirement, they can consider cultivating new habits and lifestyles. This is where you come in. You can help them try new experiences, develop new skills or simply connect with communities of like-minded people. This will keep them physically active, mentally stimulated and socially engaged.
What’s equally important is to gauge if they are in great shape (financially) to retire well. Get a sense of their savings, outstanding mortgage loans and monthly expenses to understand their current financial situation and prepare their finances for retirement.
In the short-term, help your parents declutter their spending on things they forgot (like subscription services) or don’t necessarily need. Break any unhealthy spending habits they might have (like unnecessary/excessive online shopping), and also begin the good habit of growing future savings to best suit their dream retirement lifestyle.
Of course, you can supplement that talk with action. Did you know that you can help your parents boost their retirement savings with MRSS? When you (or they) make a cash-top up to their Retirement Account (RA), the Government will match it dollar-for-dollar, up to $600 per year.
Check if your parents are eligible for MRSS here.
The cash top-up that you make, coupled with the matching grant from the Government, will earn an interest rate of 6% per annum, going a long way to boosting your parents’ retirement nest egg.
Plus, there is also the added bonus of getting tax relief of up to $8,000* per calendar year if you make a cash top-up to your parents. This can total up to $16,000 of tax relief* per calendar year if you also make a cash top-up to yourself.
* Terms and conditions apply.
Information in this article is accurate as at the date of publication.