As a global business and financial hub, Singapore is a magnet for multinational companies across various sectors including banking, technology and advanced manufacturing. This has cultivated a metropolitan environment brimming with international opportunities, economic and cultural diversity that many foreigners including Malaysians aspire to forge a career in.
Some Malaysians working in Singapore have integrated into the society for years and plan to continue developing their career here for the long-term. As they earn an income and spend a lot of their time abroad in Singapore, they will also be thinking of planning their retirement as well, whether in Singapore or Malaysia.
Identifying Your Retirement Needs
Everyone may envision their retirement life differently, but there are certain retirement essentials that many of us will need to plan for such as housing and healthcare.
For Singapore PRs who are thinking of getting a home in Singapore, you can first look into what options you have in terms of purchasing a property here and the costs involved.
In Singapore, foreigners can purchase certain private and public homes upon fulfilling specified requirements. The common types of homes that foreigners can purchase without requiring special approval are private and non-landed properties such as condominiums and walk-up apartments.
However, there are exceptions to this. For example, foreigners can purchase landed properties at Sentosa Cove without requiring approval.
In addition, if you’re a Singapore PR, you can purchase unclassified resale HDB flats with another Singapore PR after holding the permanent residency status for at least three years. Unclassified resale flats refer to flats sold before the October 2024 sales exercise and not classified as Standard, Plus or Prime. You cannot buy any HDB flat as a single Singapore PR.
On the other hand, if you’re thinking of returning to Malaysia for retirement, you, as a citizen, can purchase new homes or subsale homes in Malaysia without many restrictions. After deciding where to buy a home and what home to buy, you need to consider the mortgage repayments and costs of maintaining the home.
As for healthcare needs, Singapore PRs are eligible for MediShield Life, the national healthcare insurance scheme in Singapore that provides lifelong protection. As a basic health insurance plan administered by the CPF Board, MediShield Life helps cover your larger hospital bills and selected costly outpatient treatments, such as kidney dialysis and chemotherapy for cancer.
If you want additional coverage in Singapore, you can consider getting critical illness insurance that provides you with a lump sum cash for your expenses in the event you were diagnosed with a major illness.
In Singapore, employers are obligated to buy medical insurance for their S Pass and foreign workers, with coverage for inpatient care and day surgery, including hospital bills for conditions that may not be work-related. The coverage must be at least S$15,000 a year for policies with start date effective before 1 July 2023. Since 2023, the Ministry of Manpower Singapore has increased the coverage to S$60,000 a year for policies with start date effective on or after 1 July 2023.
For those who plan to retire in Malaysia, you can look into getting health insurance in Malaysia. If you’re traveling between Singapore and Malaysia everyday for work, you may also consider international health insurance.
Lastly, you want to calculate the expenses you need when you retire. A way to estimate your retirement expenses is preparing a replacement income based on your last drawn salary. You can aim to prepare two-thirds to three-quarters of your last drawn salary. For example, if you’re earning S$60,000 a year, you may require an annual retirement income worth 75% of your last drawn salary, which is S$45,000.
75% x Annual salary = Replacement income
75% x S$60,000 = S$45,000
Otherwise, you can also make an estimation of how much you will likely spend in your retirement based on your current spending habits. When calculating these figures, you should also factor in inflation rate.
You can also refer to the findings of reports such the Singapore’s Report on the Household Expenditure Survey 2023, which showed the expenses of households in the country. The monthly household expenses of retirees aged 65 and above averaged at S$1,383.60 per person in 2023. The monthly expenses of retired households living in HDB 1- and 2-room flats are the lowest at S$892.70 per person, while the expenses of retired households living in private condominiums are the highest at S$2,840.30.
If you’re planning to retire in Malaysia, you can refer to the Malaysia Employee Provident Fund (EPF)’s expenditure survey for 2024/2025, which found that a single elderly person requires approximately RM2,690 monthly to enjoy a reasonable standard of living.
Contributing To Your Retirement Savings
Singapore’s social security system is anchored by the Central Provident Fund (CPF), a mandatory savings scheme for Singapore workers. The CPF is funded by Singaporean workers and can be used for retirement, housing and healthcare needs. On top of that, employers are also required to make a contribution to the employee’s CPF.
The funds will go into the Ordinary Account, Savings Account and MediSave account, which each offering a dividend of 2.4% p.a. , 4% p.a. and 4% p.a.
If you hold a Singapore PR status, you are eligible to make CPF contributions. To become a Singapore PR, you will need to hold a valid work pass – Employment Pass (EP) or S Pass. When considering your PR application, ICA will factor in your family ties to Singaporeans, qualifications, age and length of residency.
If you’ve recently become a Singapore PR, you will need to inform your employers of your new status. Your CPF account will be automatically created upon the deposit of your first contribution.
In your first two years of becoming a Singapore PR, you are required to contribute to your CPF account but at lower rates to help ease you into the system. By your third year onwards, your CPF contribution rates will be aligned to the full contribution rates.
Depending on your age, your CPF contribution rates differ. The following table shows the CPF contribution rates for Singapore PRs, starting from 1 January 2025.
In your first year, if you’re aged 55 and below, you will be required to contribute 5% of your salary to CPF and your employer will contribute 4% of your salary. For the second year, the employee contribution rate will increase to 14% of your salary and employer contribution rate will be 9%.
You also have the option to contribute to CPF at full rates from your first year of being a PR if you want, at 20% and 17% by making a joint application with your employer.
| CPF Contribution Rates (Singapore PRs) | ||
| Employee | Employer | |
| Age 55 and below | ||
| Year 1 | 5% | 4% |
| Year 2 | 15% | 9% |
| Year 3 onwards | 20% | 17% |
| Above 55 – 60 | ||
| Year 1 | 5% | 4% |
| Year 2 | 12.5% | 6% |
| Year 3 onwards | 17% | 15.5% |
| Above 60 – 65 | ||
| Year 1 | 5% | 3.5% |
| Year 2 | 7.5% | 3.5% |
| Year 3 onwards | 11.5% | 12% |
| Above 65 -70 | ||
| Year 1 | 5% | 3.5% |
| Year 2 | 5% | 3.5% |
| Year 3 onwards | 7.5% | 9% |
| Above 70 | ||
| Year 3 onwards | 5% | 7.5% |
On the other hand, Malaysia has the Employee Provident Fund (EPF), which is a mandatory retirement savings scheme for workers in the country. Although you do not work in Malaysia, you can still contribute to the EPF on a voluntary basis, especially if you’re not a Singapore PR and doesn’t have access to CPF contributions. EPF is a government-managed retirement fund that offers minimum guaranteed dividends.
Under the voluntary self-contribution scheme, EPF members below the age of 75 can contribute to EPF and earn a guaranteed dividend of 2.5% per annum. You can register to become an EPF member on the KWSP i-Akaun app with your identification card, MyKad.
In the last decade, EPF has consistently delivered annual dividends of more than 5% per annum for conventional savings. Do note that you are only allowed to contribute up to RM100,000 a year to EPF.
You can self-contribute to your EPF account on the KWSP i-Akaun app and your contributions will be credited to your account in three working days.
Besides that, you can also build your retirement income by investing or even staying in the workforce and keeping yourself occupied. For example, Singapore PRs can invest in the Supplementary Retirement Scheme (SRS) operated by the private sector, which complements the CPF to enhance your retirement savings. The scheme also offers tax benefits, whereby every dollar invested is deductible from your taxable income by a dollar.
Since you’re working in Singapore and spending a lot of your time there, you may be familiar with the economic situation in Singapore and can consider diversifying your portfolio abroad and exploring investment options in Singapore. For example, the Singapore Exchange (SGX) is home to high performing blue-chip companies that have a track record of strong financial results and dividend yields.
If you’re returning to Malaysia for retirement in the future with most of your spendings being in Malaysian ringgit, you could potentially reap foreign exchange gains with such investments, as the Singapore dollar strengthens against the Malaysian ringgit.
Reaching Retirement
For Singapore PRs, if you’re leaving Singapore to retire in Malaysia, you need to renounce your PR status and have the option of withdrawing your CPF savings.
Should you choose to stay in Singapore, your CPF monies will be managed the same way as Singapore citizens. Once you reach the age of 55, a Retirement Account (RA) will be opened for you and money in your Special Account (SA) and Ordinary Account (OA) will be transferred into it.
In addition, at age 55, you will also be able to withdraw at least S$5,000 from your CPF account. This is not mandatory and you can leave your money in RA to enjoy interest of 4% per annum.
Depending on your CPF savings amount, you may be able to withdraw more cash. If you have saved more than the specified Full Retirement Sum (FRS), you have the option to withdraw more cash. The FRS is S$213,000 for those who turn 55 in 2025. So, for example, if you have accumulated S$250,000 in your CPF from mandatory contributions when working, you can withdraw any excess amount of the FRS. This means you can withdraw S$37,000 (S$250,000 – S$213,000 = S$37,000).
If you have saved up RM100,000 from mandatory contributions and $150,000 by top-ups via the Retirement Sum Topping Up (RSTU) Scheme, you can also withdraw S$37,000.
For those who do not have mandatory contributions but managed to save more than the FRS through RSTU top up, they won’t be able to withdraw additional CPF savings.
Let’s say you only want to save up the Basic Retirement Sum (BRS) by pledging your property. The BRS is half of the FRS, so it’s S$106,500. If you have accumulated S$120,000, you can withdraw the excess of the BRS, which is S$13,500 (S$120,000 – S$106,500).
If you have accumulated S$120,000, in which S$60,000 comes from mandatory contributions and the remaining S$60,000 is from RSTU top up, you will only be able to withdraw S$5,000.
Your remaining savings in RA will continue to receive interest until you are ready to enter CPF LIFE when you turn 65. At 65, you will start receiving your CPF LIFE payouts credited into our bank account each month. These are lifelong payouts to help sustain your retirement life.
For those who voluntarily contributed to Malaysia’s EPF, you can start withdrawing your EPF contributions at age 55. All your savings in the Retirement Account, Wellbeing Account and Flexible Account will be combined and transferred into the Account 55, which will be created for you then.
If you choose to continue working, your following contributions will be credited to your Gold Account. Once you turn 60, your savings in Account 55 and Gold Account will be consolidated whereby you can withdraw the full sum or part of it. You can also arrange for monthly payouts with EPF.
Read Also: Working In Singapore But Living In Malaysia. Which Country Do You Have To Pay Taxes In?
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