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15 June 2023
SOURCE: CPF Board
One of the most enjoyable things about working for yourself is the flexibility to be in full control of your work, time, and finances.
However, the path to a secure and fulfilling retirement requires careful planning and consideration. Here are some useful CPF tips to help plan for your golden years as a self-employed person.
The savings in your MediSave Account (MA) help to pay for your healthcare expenses, even in tough financial times.
Here are a few ways your MediSave savings can help with your healthcare needs:
As a self-employed person (SEP), you need to make your own MediSave contributions since you do not receive regular MediSave contributions from an employer. These mandatory contributions are important in providing valuable support for your healthcare needs.
Without MediSave contributions, you will need to budget for your medical bills and pay in cash. In short, think of your MediSave savings as a reliable fund that can help with your healthcare expenses.
Additionally, with an attractive interest rate of up to 5%* per annum, your MediSave funds will also continue to grow over time!
Find out how much you will need to contribute to your MediSave account as a SEP with the Self-Employed MediSave Contribution Calculator.
Small and regular savings will take you far on your retirement planning journey. This helps to ensure that your future needs are well taken care of.
Consider making regular top-ups to your Special Account (if you are below age 55) or Retirement Account (if you are aged 55 and above) to help your CPF savings grow. This need not be a large amount and can be any amount you would like to set aside each month.
Even topping up $50 a month to your CPF savings can go a long way in helping you reach your retirement goals, as you would be earning interest of up to 5%* per annum (if you are below age 55) or up to 6%* per annum (for those above age 55)!
For added convenience, you can automate top-ups with GIRO as well. This makes it easier for you to save and continue building funds for your retirement.
An emergency fund acts as a safety net to help meet your daily needs when business is slower, or if you fall ill unexpectedly. A useful rule to follow is to set aside about 6 months’ worth of expenses for an emergency fund.
Having an emergency fund also helps to prevent you from dipping into your savings for retirement or other long-term goals, making sure that you stay right on track.
Now that you have these tips on hand, continue securing your retirement nest egg while hustling to achieve your dreams!
*Terms and conditions apply.
Information in this article is accurate as at the date of publication.