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Singapore Govt to Ramp Up Retirement Savings Support Amidst Rising Living Costs
Singapore faces a dual challenge: rising living costs and the imperative to ensure citizens have adequate retirement savings. Recent government initiatives aim to address these concerns head-on, offering enhanced support and incentives for Singaporeans to bolster their financial security in their silver years [5, 9, 25].
Enhanced Schemes to Bolster Retirement Funds
Several key schemes have been enhanced or introduced to provide greater support for retirement savings:
- Matched Retirement Savings Scheme (MRSS): This scheme provides a dollar-for-dollar matching grant for cash top-ups made to eligible senior Singaporeans’ Retirement Accounts (RA) [4, 9]. As of January 2025, the government matches every $1 topped up to a CPF Retirement Account with $1, up to $2,000 per year [20]. A lifetime cap of $20,000 for grants on top-ups made in 2025 and beyond has been set [20]. To qualify, individuals must be Singaporean, aged 55 and above, have RA savings below the Basic Retirement Sum ($106,500 in 2025), earn an average monthly income of no more than $4,000, live in a property with an annual value not exceeding $21,000, and own no more than one property [20]. The MRSS has been extended to those above 70 from 1 January 2025 [20].
- Retirement Sum Topping-Up Scheme (RSTU): CPF members can make cash top-ups or CPF transfers to their own or their loved ones’ Special or Retirement Accounts to boost retirement savings [30].
- Silver Support Scheme: This scheme provides quarterly cash supplements to Singaporeans aged 65 and above who had low incomes during their working years and now have less in retirement [5, 18, 19]. There is no need to apply for Silver Support, as all Singaporeans aged 65 and above are automatically assessed for eligibility [18]. The amount received depends on household monthly income per person and the type of HDB flat lived in [18]. If an individual is on the ComCare Long-Term Assistance Scheme, they will receive a Silver Support payment of $430 per quarter, regardless of flat type [18].
- CPF LIFE: This is a national longevity insurance annuity scheme that provides monthly payouts for as long as one lives [20].
- Workfare Income Supplement (WIS): WIS supplements the incomes and CPF savings of lower-wage Singaporean workers, encouraging regular work [9, 20, 25]. Eligible employees, self-employed persons, and platform workers can receive payments of up to $4,900 per year [20].
CPF Top-Ups Reach Record Highs
The effectiveness of these initiatives is reflected in the record $6.7 billion set aside under the CPF Retirement Sum Topping-Up Scheme in the first seven months of 2025 [30]. This surge is attributed to increased contributions to the accounts of older members aged 55 and above [30]. January 2025 saw $2.9 billion in top-ups to the accounts of 105,000 members, more than four times the amount recorded in January 2024 [30]. Of that $2.9 billion, over $2.6 billion was for top-ups to the accounts of more than 70,000 members aged 55 and above [30].
The Rising Cost of Living in Singapore
Singapore has been recognized as one of the most expensive cities in the world [6, 14]. The Economist Intelligence Unit (EIU)’s Worldwide Cost of Living (WCOL) survey, which is designed to help human resource managers and finance managers calculate cost of living allowances and build compensation packages for expatriates and business travelers, ranks Singapore as one of the most expensive cities in the world [11]. Factors contributing to this high cost of living include land scarcity, strong economic growth leading to inflation, and increasing healthcare and education costs [6]. In 2023, Singapore was tied with Zurich as the most expensive city in the world, with average prices rising by 7.4% year-on-year in local currency terms [7].
Government Measures to Mitigate Rising Costs
The government has implemented several measures to help Singaporeans manage the rising cost of living:
- Assurance Package (AP): Enhanced in Budget 2024, the AP provides more support for lower- to middle-income households to cope with cost-of-living concerns [11].
- CDC Vouchers: These vouchers are distributed to households and can be used at participating hawkers, supermarkets, and heartland merchants [7].
- Silver Support Scheme: Provides a quarterly cash payout to elderly Singaporeans aged 65 and above, who had low incomes through life and who now have little or no family support [9].
- Managing domestic supply-side constraints: The Government actively manages domestic supply-side constraints [11].
Investment Options for Singaporeans
To combat the effects of inflation and grow wealth, Singaporeans have access to various investment options [2, 12, 13, 28]:
- CPF Investment Scheme (CPFIS): This scheme allows individuals to invest their CPF savings in a range of financial products [12].
- Supplementary Retirement Scheme (SRS): A voluntary scheme to supplement CPF savings, offering tax benefits to encourage saving for retirement [12, 24]. Contributions to SRS are eligible for tax relief, and investment returns are accumulated tax-free [24].
- Singapore Savings Bonds (SSBs): Government bonds offering a safe and flexible way to save for the long term [12, 16, 23, 31].
- Treasury Bills (T-bills): Short-term debt securities issued by the government [12, 23].
- Fixed Deposits: Offer guaranteed returns, with deposits covered under the Singapore Deposit Insurance Scheme for up to $100,000 [26, 28].
- Real Estate Investment Trusts (REITs): Offer a way to invest in a diversified portfolio of real estate assets [12, 13, 16].
- Exchange-Traded Funds (ETFs): Provide diversified exposure to various markets and asset classes [2, 12, 13, 28].
- Stocks: Investing in individual stocks or a basket of stocks via an ETF or unit trust [2, 12, 28].
- Unit Trusts: Funds that pool together investors’ money to make investments managed by a fund manager [2, 13, 29].
It’s important to note that Singapore’s Straits Times Index offers high dividend yields and low volatility compared to its APAC peers [17].
Conclusion
The Singapore government is proactively addressing the challenges of rising living costs and retirement adequacy through enhanced schemes and incentives. These measures, coupled with a range of investment options, aim to empower Singaporeans to build a more secure financial future. As Singapore continues to navigate the complexities of a globalized economy, these efforts are crucial in ensuring the well-being and prosperity of its citizens in the years to come.
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