: Secure Your Golden Years with the Right Choice Introduction In the sunny island nation of Singapore, making the right choice…
The Majulah Package was announced during National Day Rally (NDR) 2023. This package was introduced to support Young Seniors in Singapore, i.e. those who are 50 and above in 2023.
Anyone who is born in or before 1973 will qualify for the Majulah Package. This means those of us who are in the Pioneer Generation or Merdeka Generation will also be eligible for the Majulah Package.
According to statistics released by the government, the Majulah Package will benefit 1.4 million Young Seniors in Singapore.
Within the Majulah Package, there are three parts:
The Earn and Save Bonus is targeted at low and middle income. Details on the income range for low and middle income earners will be released in 2024.
For now, what we do know is that, as long as you continue to work with CPF contribution, the government will top up $400 to $1000 to your CPF Special Account (SA) or CPF Retirement Account (RA). The destination of the bonus will depend on whether you are above or below 55 when the Majulah Package starts.
One thing to note about the Earn and Save Bonus is that it will be a recurring bonus. You will be eligible for it if you continue to stay employed with CPF contribution.
Retirement Savings Bonus is targeted at Singaporeans who have not yet met retirement adequacy. The way retirement adequacy is defined is whether one has already met the CPF Basic Retirement Sum (BRS).
There will be a one-time top up of your CPF SA or RA if you have yet to hit the CPF BRS. The amount ranges between $1000 to $1500, depending on your level of income.
A one-time top up to your MediSave will also be provided under the Majulah Package. The top up amount between $500 to $1000 will be credited to your MediSave account.
Like the Retirement Savings Bonus, more will be given to those with lower income.
It’s always good news to know that the government is thinking about its people and taking care of us, especially when we enter into our retirement years.
But beyond just the dollar value, we think that there are some important messaging that the Majulah Package is reminding us about.
The Earn and Save Bonus is a reminder to ourselves that as our life expectancy increases, we should think about retirement in a different perspective. Retirement isn’t a point in our life where we simply shut off and just do nothing. Instead, one should consider going for a selective retirement.
A selective retirement is where you deliberately choose to slow down your work life and spend more time doing things that you enjoy. It can be going for travel or spending more time with your family.
Continuing to stay active at work will help you to keep your mind sharp, but at the same time, you also have more time to do what you enjoy. And that’s why the government is trying to encourage this by incentivising us with the Earn and Save Bonus to continue working if we can.
The top ups to retirement savings is not just to alleviate the concerns of those who are retiring. It is also to address the problems that the sandwiched generation is facing.
For the uninitiated, the sandwiched generation are those in their 30s to 40s who have to take care of their parents and also their children. There’s financial stress coming from both the older ones and younger ones, causing them to be sandwiched.
Retirement adequacy was a key message during NDR 2023. But there was also a hidden message about inflationary pressure. Given the global economic situation, inflation is going to stay higher for longer.
The direct impact of that is that everything will become more expensive and we will need to be prepared to save more before we can think about retirement. This is also why the government is supporting Singaporeans’ retirement adequacy through top ups to our CPF. But more importantly, we can’t just rely solely on the government. We also need to improve our own retirement adequacy as best as we can.
The best way is to start with ensuring your own retirement adequacy. It’s important to take care of your own retirement needs first before you help others.
You want to take advantage of the time that you have now to plan early and start taking action for your retirement plans. Take time out of your busy schedule to figure out what you want for your retirement.
For more financial security, you might also want to consider the safe hands of a professional financial planner. Having a seasoned professional for retirement planning ensures that you have the right advice needed so that you can plan and manage your own retirement adequacy with ease.