A Comprehensive Guide to the Matched Retirement Savings Scheme

This was originally posted on Planner Bee.

Announced during Budget 2020 and launched in 2021, CPF’s Matched Retirement Savings Scheme (MRSS) aims to help senior Singapore Citizens with lower retirement savings to build up more when they top up their CPF Retirement Account (RA).

Eligible senior Singaporeans can enjoy a dollar-for-dollar matching grant of up to S$600 from the Singapore government. In this article, we will delve into MRSS’ merits and limitations, and the ways to do the top-up.

How does MRSS work?

Launched in 2021, MRSS provides a dollar-for-dollar matching grant of up to S$600 annually when an eligible senior Singaporean makes a cash top-up to their CPF RA. The scheme will run for five years for a start, until 2025, and one can enjoy a maximum of S$3,000 in matching top-ups.

For those eligible, a top-up anytime during the year to their CPF RA will see the matching grant automatically credited to their RA at the start of the following year. For example, if they had made a S$600 top-up in June 2022, they will see the matching S$600 credited to their RA in January 2023.

The MRSS was launched to help senior Singaporeans meet their Basic Retirement Sum (BRS) to increase their monthly payouts during retirement. Unlike the Retirement Sum Topping-Up Scheme (RSTU) which is open to everyone, certain criteria need to be met for the MRSS.

Who is eligible for MRSS?

Eligibility is automatically assessed every year and eligible individuals are automatically notified at the start of each year by the CPF Board.

The full eligibility criteria are as follows:

• Singapore citizen
• Age 55 to 70 (both inclusive) as of December 31 of the assessment year
• Retirement Account savings are less than $99,400
• Average monthly income is not more than $4,000
• Annual value of residence is not more than $13,000
• Own not more than one property

You can also check your eligibility for MRSS by using this eligibility checker or via your Retirement Dashboard.

If you received notice that you are eligible for MRSS, you can do a cash top-up via the e-Cashier portal and select payment for “Top Up my own/Recipient’s RA Under Retirement Sum Topping-Up Scheme”.

Benefits of MRSS

If you are eligible for MRSS, one of the biggest benefits of topping up at least S$600 a year is the “free” dollar-for-dollar matching from the government, up to an annual cap of S$600. On top of that, other benefits include earning CPF interest rates and enjoying tax reliefs with the top-up.

With interest rates of up to 6% per annum, the CPF RA is one of the best places to keep your money for retirement. Unlike investments, your capital and returns are guaranteed when you save in your RA. Your RA savings will become monthly payouts through CPF Life when you hit the retirement age.

Furthermore, you can get tax reliefs of up to S$16,000 when you make cash top-ups to your CPF accounts and for your immediate family members. The cap is set at S$8,000 for top-ups to your own CPF accounts, and an additional S$8,000 for your immediate family’s CPF accounts.

Don’t forget that the MRSS dollar-for-dollar grant is capped at S$600 annually.

Limitations of MRSS

Despite the dollar-for-dollar matching grant, many seniors still choose not to top up their CPF with MRSS. This is mainly due to the low liquidity of CPF funds. Once the funds are added to their RA, withdrawals can only be in the form of monthly payouts.

CPF top-ups are also irreversible. If a person needs a lump sum urgently, they can’t reverse their top-up or withdraw a large sum immediately.

However, if you are an eligible elderly Singaporean and have extra cash on hand, you should consider MRSS to capitalise on the dollar-for-dollar matching grant.

Ways to prepare for retirement

Even if you are too young to be eligible for MRSS, you can still think about your retirement plans. It is never too early to start considering your goals for retirement and planning for the amount that you will need eventually.

For many Singaporeans, the retirement sum of S$1 million is a benchmark to reach but is it truly enough and how can you reach it? Remember to check out our 5-step guide to investing for retirement, along with a how-to piece on complementing your CPF Life payout with an annuity plan.

Take advantage of Planner Bee’s retirement calculator to get started on your planning, or reach out to us at [email protected] to better understand your retirement options!