Voluntary Contribution vs. Retirement Sum Topping Up: Which suits you better?

07 Oct 2016 
Attractive interest rates make your CPF accounts a good starting point if you're saving for future needs, and you might be considering topping up to get more from your savings. But with different options such as making a Voluntary Contribution (VC) and the Retirement Sum Topping-Up (RSTU) scheme available, how should you be topping up your CPF accounts?​



Voluntary Contribution (VC)

If you're looking to build your CPF savings for your housing, healthcare and retirement needs, you can make a voluntary contribution to all 3 CPF accounts (OA, MA and SA) using cash.


On the other hand, if you're more concerned about healthcare, you can choose to contribute to your Medisave Account only. Contributing to your MA with cash is tax deductible so you can save some money as well! Do take note that the amount of tax relief you can receive in a year will be the lowest of the following:


(i) Voluntary cash contribution directed specifically to Medisave Account or 
(ii) Annual CPF contribution cap for the year, less Mandatory Contribution (MC) or 
(iii) Prevailing Basic Healthcare Sum (BHS), less the balance in Medisave Account before the voluntary cash contribution. 


If you're working overseas or self-employed, and do not receive regular contributions from employers, all the more you should be looking at doing a VC, to help build up your retirement and/or healthcare savings.


Retirement Sum Topping-Up (RSTU) scheme

If your goal is to build your retirement savings to enjoy higher monthly payouts, you can consider topping up via the RSTU scheme.


You can use either cash or CPF to top up your own or your loved ones' Special Account (below 55) or Retirement Account (55 and above) for retirement. By choosing to do so with cash, you can enjoy up to $7,000 in tax relief when you make a top-up to yourself, and up to an additional $7,000 in tax relief when you make top-ups for your loved ones!


If you are thinking of making a top-up using CPF, you can find out how much CPF savings you can transfer to your loved ones by logging into my cpf Online Services and checking My Messages. Your loved ones can also check how much he or she can receive from you via the same steps.​

Information accurate as at 7 October 2016

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