Your Majulah Package: A Young Singaporean Senior’s Roadmap To Their Retirement Benefits

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First introduced during the National Day Rally 2023 with more details in Budget 2024, the Majulah Package aims to support “Young Seniors” in Singapore as they approach retirement.

Unlike the Pioneer and Merdeka Generations seniors, who are mostly retirees, “young seniors” are individuals in their 50s and early 60s who are often still working. They may have children who are not yet financially independent, and may also need to care for elderly parents. At the same time, they need to start planning for their own retirement.

While some young seniors may be financially prepared, others may struggle to balance their ongoing responsibilities with their retirement planning. This is where the Majulah Package comes in to help enhance retirement adequacy and provide healthcare support for young seniors, ensuring a more secure retirement.

Who Qualifies For The Majulah Package?

The Majulah Package aims to provide Singapore Citizens born in 1973 or earlier, especially those born in 1960 to 1973 (“Young Seniors”, currently in their 50s and early 60s), with support for their retirement and healthcare needs. In particular, those with lower income who need more help would benefit more from the Majulah Package.

Even Pioneer and Merdeka Generations seniors will also benefit from the Majulah Package, so long as they meet the eligibility criteria.

How The Majulah Package Aims To Boost Retirement & Healthcare Adequacy

Beyond having a roof over our heads, two other crucial aspects of retirement are securing regular passive income and building up medical savings for healthcare.

#1 Increasing Our Retirement Income Through The Earn and Save Bonus

In Singapore, the CPF system forms the foundation of retirement planning. CPF LIFE, a national longevity annuity scheme, provides retirees with lifelong monthly payouts, throughout retirement.

The amount received from CPF LIFE depends on how much we have in our Retirement Account (RA). Simply put, the more we contribute to our RA, the higher our monthly CPF LIFE payouts will be.

The first component of the Majulah Package, aimed at increasing the Retirement Account (RA) savings of young seniors, is the Earn and Save Bonus.

The Earn and Save Bonus offers an annual bonus ranging from $400 to $1,000 for lower- and middle-income earners, helping them boost their CPF savings as they continue working.

Source: Ministry of Finance

For example, an eligible Singaporean born in 1973 or earlier, earning an average of $2,500 a month, will receive an annual bonus of $1,000 credited to their CPF Retirement Account (if aged 55 and above) or CPF Special Account (if below 55).

This bonus will be credited each year, as long as they are working, regardless of whether it’s full-time or part-time employment. Eligibility criteria for the Earn and Save Bonus is as such.

• Work and have an average monthly income of between $500 and $6,000;
• Live in a residence with Annual Value (AV) of $25,000 and below; and
• Does not own more than one property.

Assuming an individual qualifies for the Earn and Save Bonus with an average monthly income of $2,500, they will receive an additional $10,000 in their CPF Retirement Account over 10 years before retirement. If they work for 15 more years until retirement, they will accumulate an extra $15,000 in their CPF Retirement Account.

This additional support helps enhance retirement security by increasing CPF savings, leading to higher monthly payouts during retirement.

#2 Enjoying A More Comfortable Retirement With The Retirement Savings Bonus

The Retirement Savings Bonus is an additional incentive aimed at increasing the retirement savings of eligible Singaporeans born in 1973 or earlier who have not yet reached the 2023 Basic Retirement Sum of $99,400 as of 31 December 2022.

Those with less than $60,000 in CPF retirement savings will receive $1,500, while those with at least $60,000 but less than $99,400 will receive $1,000 as long as they meet the following criteria:

• CPF retirement savings below the 2023 Basic Retirement Sum of $99,400 as of 31 December 2022;
• Live in a residence with AV of $25,000 and below as of 31 December 2023; and
• Does not own more than one property as of 31 December 2023.

Source: Ministry of Finance

Notably, even those who are no longer working can qualify for the Retirement Savings Bonus. This includes homemakers who have left the workforce to care for their families, as well as retirees who may not have accumulated sufficient retirement savings.

By providing additional CPF funds, the Retirement Savings Bonus enhances financial security, ensuring that more Singaporeans, regardless of their employment status, can be supported in their retirement.

#3 Boosting Our Healthcare Adequacy Through MediSave Bonus

As we grow older, healthcare naturally becomes a key concern. To enjoy a secure retirement, it’s essential to plan ahead by ensuring adequate health insurance coverage, managing medical costs effectively, and ideally maintaining a healthy lifestyle to minimise future healthcare expenses.

In Singapore, MediSave is a national healthcare savings scheme that allows citizens to set aside part of their income in a CPF account for medical expenses. It can be used to cover hospitalisation costs, certain outpatient treatments, and premiums for health insurance schemes like MediShield Life, helping Singaporeans meet essential healthcare needs.

The Majulah Package aims to enhance healthcare savings for all Singapore citizens born in 1973 or earlier through the MediSave Bonus. This support comes in the form of an additional MediSave top-up. Singaporeans born in 1973 or earlier will receive a MediSave Bonus of $1,250 or $2,000, boosting their healthcare funds to better support medical needs over time.

Read Also: Complete Guide To Household Support Measures From Budget 2024

One important aspect of the Majulah Package that shouldn’t be overlooked is that its support is designed to be ongoing, rather than a one-off measure. For instance, the Earn and Save Bonus will continue to boost the retirement adequacy of lower- and middle-income earners for as long as they remain in the workforce, whether full-time or part-time. This helps to ensure that their CPF savings grow steadily over time, leading to greater financial security in retirement.

Additionally, for Pioneer and Merdeka Generations seniors, the Majulah Package adds to the range of benefits they have received through previous Budget measures. This layered approach means that they not only benefit from existing support schemes but also receive further assistance to manage healthcare costs and bolster retirement savings.

Together, these components contribute significantly to enhanced retirement security, allowing Singaporeans to maintain a better quality of life as they age, with the peace of mind that comes from knowing that their financial and healthcare needs are being addressed.

Unsure of how much you and your household may receive from Budget 2024? You can get the estimated benefits from the Support For You Calculator. Click here to access the  Calculator.