4 CPF account gestures to delight mom this Mother's Day

The modern holiday of Mother's Day was first celebrated in 1908 to set aside a day to honour all mothers.

Fun fact: Anna Jarvis, the founder, was insistent that the apostrophe in "Mother's Day" is in the singular possessive form, not plural possessive (Mothers' Day), so that we love and honour our own mother in the household.

Many Singaporean mothers took an extended break from work or even took on the task of caring for the family full-time, resulting in a lower CPF balance for stay-at-home mothers. 

Here are four suggestions that you can consider to bolster your mother's retirement plans, through some simple CPF transfers made online. Top up for your loved ones to help them grow their retirement savings, you should also consider your own and your mother's personal and financial circumstances, as this is meant to be a personal gift after all.

1. Top up her CPF Retirement Account (RA) with cash

Consider giving your mother a CPF Mother's Day present by topping up her CPF account with cash. Your mother can enjoy the higher interest rates of the CPF Retirement Account (RA), which goes up to 6% p.a. if she is above 55, helping her build up her nest egg. 

The Government matches every dollar of cash top-ups made to the CPF Retirement Account for Singaporeans who have not reached the Basic Retirement Sum (currently $102,900). Under this Matched Retirement Savings Scheme, not only will your mother get to enjoy a cash match from the government of up to $600, but you will also benefit from additional tax relief of up to $16,000 per calendar year.

Note: The CPF Special Account, which has traditionally earned CPF members long-term yields, will be closed from January 2025.

2. Make a CPF transfer from your Ordinary Account (OA) to her RA

If you are more inclined to keep your cash for rainy days, you can also do a transfer from your CPF OA to your mother's CPF RA account. In this CPF transfer, she can also benefit from the higher interest rate from CPF.

The catch is that you need to have enough in your CPF OA before you can make the transfer. The Basic Retirement Sum (BRS) and the Full Retirement Sum (FRS) need to be met before you can transfer your CPF monies to your loved ones.

As mentioned, to even be able to use this option, you must have an amount equivalent to FRS in the first place. For most young working adults in or before their mid-30s, this is unlikely to be an available option. Again, the decision needs to be made factoring in your and your family’s financial situation. 

3. Boost her CPF MediSave Account (MA) with a cash top-up

As we prepare for old age, it is prudent to apportion a part of our wealth to healthcare costs to alleviate any medical expenses that may cause unexpected financial stress to the household.

Doing a cash top-up to your mother's CPF MA not only forces us to dedicate a part of our money to her needs, but the monies inside can also grow at a rate of up to 5% p.a. The most practical way to use this is to:

1. Top up her Medisave account using cash and
2. Pay for her Integrated Shield Plan using the cash top-up, so that
3. She enjoys tax relief (if applicable) from the top-up in her next tax filing.

More importantly, CPF MA covers healthcare costs such as Integrated Shield Plan Premiums, hospitalisation bills (including day surgeries, psychiatric hospitals, and day rehabilitation centres), and other outpatient claims (including dialysis treatment, or outpatient chemotherapy).

4. Make a CPF transfer from your CPF to her MA

Finally, you can transfer from your own CPF monies to her MA account. The limit you can transfer is based on:

1. Your available balance in OA,
2. Your mother's Basic Healthcare Sum (BHS)– The BHS is $71,500 in 2024.
3. The amount that you want to contribute.

Do note that for this transfer, CPF prioritises transferring your SA balance over your OA, so your family will not be able to earn additional interest from a CPF OA to MA transfer if you have an existing SA balance.

Should you use cash or CPF to top up her MA?

This is a personal decision. The benefit of CPF MA transfer is that it has fewer restrictions–you do not need to meet the FRS requirements before you can make the transfer. In that case, it is more beneficial for you to prioritise using your CPF to top up your mother's MA instead of your cash.

Beyond helping our mothers with their finances, we should show our appreciation in ways they treasure most, be it helping out with household chores, writing a card thanking her for her contributions, or even planning a holiday with her (eventually). 

Anna Jarvis tried to stop the commercialisation of Mother's Day when she realised that florists and charities were using it as a marketing gimmick. Likewise, while helping our mothers financially is nice, it is much more important to be appreciative and helpful especially today, and also every day.