Why saving it forward makes you an adult - Alvinology

Why saving it forward makes you an adult

Late last year, my then 5-year-old son, Asher, suddenly told me that he wouldn’t be going to one of his best friend’s birthday parties. I was taken by surprise because he had been talking excitedly about going to the party for some time. What caused him to change his mind?

Upon questioning, Asher shared that his friend wanted everyone to attend the party dressed up as “storybook characters”. He asked his friend if he could wear his LEGO costume, the only costume he had, to the party, but was rejected by his friend as it was “not from a storybook”.

After weighing the pros and cons, Asher decided not to go.

“I only have one costume. It will be a waste of money to buy another costume just to go for the birthday party,” said Asher like a financially prudent little adult.

Asher in his one costume
Asher in his one costume

My little man is adulting at an early age! As most people tend to put off financial planning till much later in life, I was surprised that a 5-year-old could understand the importance and value of prudence.

The fact is, many adults tend to only start thinking about planning for their financial future when it is too late. But when is the right time to start managing one’s finances? I find that it is more a question of which stage of life one is at, as well as whether you have loved ones to provide or care for, rather than a decision that is based on a numerical age.

Planning ahead for the family

Adulting goes beyond taking care of your own needs and wants, but also includes having consideration for your family. It may sound impossible in today’s world when you have many bills to pay, but the key is to ensure consistent financial management for your needs, so that you have the financial bandwidth to plan ahead and look out for your family too.

It all starts with a little coin bank that eventually evolves into a savings account. It also involves budgeting, as well as managing and allocating your finances for your core needs like housing, healthcare and retirement. When your foundations are strong, the next natural step is to consider the needs and wants of your family.

For example, if your parents are getting on with age, you may want to ‘save it forward’ to help support their retirement goals. If you are married, you may want to plan for your spouse’s retirement, apart from your own. If you have kids, you may want to save for their future education. Adulting sets in when you do financial planning for others whom you care about, and not just for your own needs.

In my case, I am turning 37 in October this year. My parents are both retired and I am married with a young son who will turn 6 soon. Just as how Asher surprised me with his adult thinking, I am taking steps in adulting myself, particularly by  making plans to provide for my family’s financial needs in the long run. #ICanAdult because I care for my family.

As daunting a task as it may sound, providing for one’s family is not that difficult if you start early. With early adulting and some financial hacks, this is achievable.

For a start, I’ve already started putting aside money for my son through these three simple tried-and-tested tips. Aside from saving for your children, here are 2 other ways you can ensure your family’s needs are taken care of:


In Singapore, it is common for children to take on the responsibility of caring for their parents when they retire. However, it may not be financially wise for you to be your parent’s only source of retirement income.

Long-term financial planning should include finding means to cater to your parent’s retirement needs. The last thing you want is to be caught in a financial fix of supporting your ageing parents, saving for your own retirement, and taking care of your children.

To support your parents’ retirement, you can consider topping up your parents’ CPF Special Accounts (if they are below the age of 55) or Retirement Accounts (if they are aged 55 and above) through the Retirement Sum Topping-Up Scheme. This will help boost their retirement savings, which can grow at up to 6% per annum*. With a higher retirement sum, they will receive higher lifelong monthly payouts under CPF LIFE .

The added benefit? If you make a top-up in cash, you can enjoy dollar-for-dollar tax relief of up to $7,000^, so you are rewarded for your efforts in supporting your parents’ retirement!

Ensuring your spouse is prepared for retirement is also often overlooked. If you are married and your other half is a homemaker or has significantly less money than you in his or her CPF account, there are also merits to topping up his or her account from yours. This will ensure your other half will have his or her own retirement income, so you do not have to worry about providing for another person’s retirement later on in life.

If your spouse has less than $60,000 in his/her CPF accounts, transferring your CPF savings above the Basic Retirement Sum to your spouse’s Special Account (below 55) or Retirement Account (above 55) will allow both of you to benefit from the extra interest paid on the first $60,000 of each of your CPF balances. I know of several couples that are doing this. It is a good way to get the most out of your combined savings as a couple!

Why saving it forward makes you an adult - Alvinology

^Up to $7,000 per calendar year and capped at the current Full Retirement Sum (FRS). Cash top-ups beyond the current FRS will not be eligible for tax relief. In total, you can enjoy tax relief of up to $14,000 per calendar year if you make cash top-ups for yourself and your loved ones # (#For cash top-ups to spouse’s and/or siblings’ RA or SA, tax-relief is applicable only if their income does not exceed $4,000 in the year preceding the year of top-up or if they are handicapped).

*Inclusive of an extra 1% interest paid on the first $60,000 of a member’s combined balances, with up to $20,000 from your Ordinary Account (OA). Members aged 55 and above will also receive an additional 1% extra interest on the first $30,000 of their combined balances, with up to $20,000 from your OA.


Adulting also comes with the responsibility to broach uncomfortable topics, like who should be the one to get your money should anything happen unforeseeably.

As parents, we need to have these contingency plans in place so that our loved ones are well taken care of in the event that we pass on.

While most would know the basics of getting your will drawn up, many may not be aware that their CPF savings are not covered under their will.

The CPF nomination allows you to specify who will receive your CPF savings, and how much each nominee should receive, upon your demise.

Even if you have already made a nomination previously, you should review it regularly to ensure that the nomination continues to fit your intentions. Do you know that when you get married, your original CPF nomination will be revoked? If you don’t have a valid CPF nomination, your CPF savings will be transferred to the Public Trustee for distribution to your family members in accordance with the intestacy laws or inheritance certificate (for Muslims), and administrative charges will be incurred. Here are 4 instances when you should review your CPF nomination:

Why saving it forward makes you an adult - Alvinology

Did you also know that CPF monies are the only assets that the creditors of the deceased cannot touch?+ I know of a real life example whereby a housewife with three kids was left saddled with debts after her husband passed away, following his business failure. Her husband was declared bankrupt and the creditors took away all their assets, including repossessing the condominium her family was living in. But because her late husband had made a nomination that named her as the sole nominated recipient, she was able to get a comfortable sum of money from his CPF accounts. This helped her to start a new life, using the money to purchase a small flat.

Just a simple act like performing a CPF nomination can change lives – not just any lives, but that of your loved ones.

+If the nominee is an undischarged bankrupt at the time he/she becomes entitled to receive the CPF monies from the deceased CPF Member (“nominated monies”); CPF Board is legally obliged to inform the Official Assignee and transfer the nominated monies to the Official Assignee to pay off the nominee’s debts. More information can be found here (under “Criteria for Nominee”).

Going back to the story about Asher’s costume, it had a happy ending. Although we didn’t buy a new costume for him, he was able to go for his friend’s birthday party in the end because we found a LEGO storybook, which depicted a character wearing his LEGO costume. As such, he could show the book to his friend and demonstrate that his costume is indeed from a storybook!

Essentially, that LEGO storybook sort of helped Asher to ‘save it forward’. We knew books were good for him, but it paid off in another unexpected way. Likewise, start your financial planning now, not just for yourself, but for your family too. You’ll thank me later for this little piece of advice.

Have you strengthened your parents’ foundation for retirement yet? Follow @cpf_board on Instagram to find out how, and for more financial tips so #ICanAdult starting today!

This article was written in collaboration with the CPF Board. All views expressed in the article are the independent opinion of Alvinology.

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