Sufficient capital is essential when you start a business. However, it is not enough to simply have sufficient financing. Industry knowledge and good planning are required to manage your business well. These qualities ensure that entrepreneurs like yourself can avoid common mistakes like securing the wrong type of financing, miscalculating the amount required, or under-borrowing the amount of money you needed for your venture. Proper financing is key to the success of your business.

Click here for more information on financing your business.

	Healthcare
	Retirement
	Housing

 

 

As a self-employed person, ensuring the continuity of your business and its success is probably your priority. However, you also need to take care of your personal finances.

With increasing healthcare costs, it is important that your healthcare needs are taken care of. You are required to make Medisave contributions if you earn a yearly net trade income of more than $6,000. Unlike employees, self-employed persons do not receive regular Medisave contributions from employers. It is therefore important for you to set aside a portion of your income to build up Medisave savings for your healthcare needs. You can use your Medisave savings to pay for your own or immediate family members’ hospitalisation expenses, day surgery and selected outpatient treatments like chemotherapy, radiotherapy and dialysis.

You can also use your Medisave savings to pay the premiums for MediShield or Medisave-approved private insurance plans. These are catastrophic medical insurance schemes for you and your dependants. They help to meet the high medical costs incurred due to prolonged or serious illnesses. For older CPF members, there is ElderShield, an affordable severe disability insurance scheme that provides insurance coverage to those who require long-term care. You can learn more about providing for your healthcare needs here.

What’s more, your Medisave savings earns you interest at the prevailing CPF interest rates. Find out how your Medisave savings can earn you extra interest here.

 

Find out how much you will need to contribute to your Medisave simply using our online calculator. You can also check if you have any outstanding Medisave payable here. Learn more about Medisave for the self-employed.

Besides saving for medical needs, you can also make voluntary contributions to all three CPF Accounts (Ordinary, Special and Medisave Account) to save for your retirement. Such voluntary CPF contributions will be apportioned to the three CPF Accounts according to the prevailing allocation rates.

However, your CPF contributions (including mandatory and voluntary contributions) made in a year will be subject to the CPF Annual Limit. This limit is applicable to all Singaporean and SPR employees, as well as the self-employed and non-employed.

 

To grow your CPF savings faster, you can transfer your Ordinary Account savings to your Special Account to enjoy the higher interest rate. Find out more from this example.

However, do note, that the transfer is not reversible. Find out how to transfer of your Ordinary Account savings to your Special Account. You can also try the Ordinary Account - Special Account Interest Calculator to estimate the interest you would earn in the two accounts.

You can withdraw your CPF savings when you turn 55, after setting aside your CPF Minimum Sum. Your CPF Minimum Sum can be used to buy a life annuity from a participating insurance company, placed as a deposit with a participating bank, or left in your Retirement Account with the CPF Board. If you have opted to join CPF LIFE, you will receive the monthly income for life.

However if you have opted to remain on the current Minimum Sum Scheme and you leave your CPF Minimum Sum with a participating bank or with CPF Board; you will receive the monthly income until your CPF Minimum Sum is exhausted. You can start receiving your monthly payouts from your Minimum Sum from age 62. If you can afford to postpone the monthly payments to a later age instead of 62, you can make your Minimum Sum last longer.

To estimate your retirement savings, try out the CPF Retirement Calculator.

Come 2013, CPF LIFE will be introduced and it will provide members with a monthly income from age 65 for as long as they live. CPF members, aged 50 or younger in 2008 and have at least $40,000 in their Minimum Sum at age 55, will be automatically included. To get an estimate on how much monthly payouts you can receive by joining CPF LIFE, try the CPF LIFE Payout Estimator.

Your Ordinary Account savings can be used to buy a home under the CPF housing schemes. You can buy an HDB flat under the Public Housing Scheme, or a private property under the Residential Properties Scheme. Your CPF savings can be used for full or part payment of the property, and to service the monthly housing payments. If you buy a flat under the Public Housing Scheme, you will need to be insured under the Home Protection Scheme. Find out more about the use of CPF savings for your housing needs.