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22 May 2020 


One of the most enjoyable things about being your own towkay is the flexibility to be in full control of your work, time, and finances. However, in times of economic instability, it can be hard to stay on track with your finances and long-term goals.


Here’s a nifty guide to help you plan for your golden years and build up your retirement nest egg!

How to stay on track with retirement goals for self-employed persons

Ensure you have sufficient savings for your healthcare needs

Your MediSave Account (MA) savings are set aside to help you meet hospitalisation, day surgery, and costly outpatient expenses, especially in old age. You can also use your MediSave to pay the premiums for your healthcare coverage under MediShield Life or Integrated Shield Plan. Even in tough financial times, you can tap on your MA savings to keep your healthcare expenses in check.

As long as you still have an income, remember to put aside some of your money into your MA, which will grow with attractive interest rates of up to 5% p.a.1

DidYouKnow that if you’re a service provider for the Government, making MediSave contributions just got easier? Under the Contribute-As-You-Earn (CAYE) scheme, a portion of your service payment is credited to your MA whenever you receive a service payment. The agency or company making the payment will first deduct and credit a portion of the service payment to your MA, before paying the remainder of the service payment to you. This way, you can be assured that you do not miss putting aside savings for your healthcare needs!

Find out more about CAYE

Continue to set aside some savings for your retirement

While saving and planning ahead for your retirement may not be the first thing on your mind right now, it’s important not to neglect your future needs. Small but regular savings will take you far on your retirement planning journey.

If it is within your means, consider making small and regular top-ups to your Special Account (SA) (if you are below age 55) or Retirement Account (RA) (if you are aged 55 and above) to earn attractive interest rates of up to 6% p.a.1 For as little as $2 a day, you can grow your CPF savings by more than $14,0002 in 15 years.

For added convenience, you can automate the top-ups with GIRO (refer to the section under “Apply”). This would make it easier for you to save and continue building your funds for retirement.

Save for an emergency fund

The rule of thumb when it comes to emergency funds is to set aside about 6 months’ worth of expenses. It might seem like a daunting task but you can break it down into manageable monthly saving goals. Here’s a guide to start you off!

Having an emergency fund acts as a safety net to help meet your daily needs when business is slower, or if you fall ill unexpectedly. This would prevent you from dipping into your savings for retirement or other long-term goals, making sure that you stay on track.

Now that you have these tips on hand, continue securing your retirement nest egg while hustling to achieve your dreams!

1 Includes extra interest. Members who are below 55 years old are paid an extra interest of 1% per annum on the first $60,000 of their combined balances (capped at $20,000 for Ordinary Account (OA)). Members who are 55 years old and above are paid an extra interest of 2% per annum on the first $30,000 and 1% per annum on the next $30,000 of the combined balances (capped at $20,000 for OA).

2 Computed using the base interest rate of 4% p.a. on the SA.

Information accurate as at 22/5/2020.