By Lorna Tan
Head, Financial Planning Literacy
If you’ve only got a minute:
- The Year of the Fire Horse symbolises movement, vibrant energy, and the potential for transformation. As we embrace the momentum, it is time to ensure that our retirement planning is on the right track, close money gaps and boost resilience.
- Leverage career gains like pay increments and bonuses by investing these extra earnings wisely into long-term savings or acquiring new skillsets, instead of indulging in instant gratification.
This article was first published in The Business Times.
Galloping into the Chinese New Year from 17 February 2026, the Year of the Fire Horse symbolises movement, vibrant energy, and the potential for transformation. As we embrace the momentum, it is time to ensure that our retirement planning is on the right track, close money gaps and boost resilience.
To counter horse-like traits such as impatience, undesirable knee jerk actions and over confidence, balance drawn from knowledge is essential. Also, be on the lookout for opportunities and avenues to enhance financial wellness.
Here are 4 tips that are inspired by the attributes of the horse.
Aim for independence
Prudent financial decisions often require patience and discipline to achieve financial independence.
Adopt the “pay yourself first” approach to build a disciplined savings habit and discern between needs and wants. Ensure you have an emergency cash fund of at least 3 to 6 months of expenses (or 12 months if you are a freelancer), and adequate insurance before investing. Be cautious about spending impulsively and steer clear of risky investments or investing without due diligence.
Focus on long-term wealth building by adopting the dollar-cost averaging approach to ride out market volatility instead of timing the market. Long-term investing enables you to stay invested and ride out market downturns with greater confidence.
Make steady progress
Our financial journey is more akin to a marathon than a sprint; slow and steady wins the race.
Leverage career gains like pay increments and bonuses by investing these extra earnings wisely into long-term savings or acquiring new skillsets, instead of indulging in instant gratification.
Be strategic
Empower yourself with knowledge to make informed decisions. Enhance your financial literacy through credible content, seminars and market insights, and seek investment opportunities. Understanding the range of protection and investment solutions sharpens your analytical abilities, helping you know what works best for your circumstances and time horizon. When you invest with a focus on fundamentals, you can sieve out market noise and have a greater peace of mind.
Leverage financial planning digital tools such as digiWealth in DBS digiBanking and consider consulting with a professional wealth planning manager for holistic financial advice.
Adapt to changes
Stay energetic and open to re-aligning your strategies as economic conditions shift. This includes keeping cash on hand to deploy during market downturns, and retaining the ability to pivot your portfolio or adjust spending.
From this month, the Central Provident Fund (CPF) monthly salary ceiling will be raised to S$8,000 from S$7,400. There will also be higher contribution rates (by 1.5%) for workers aged 55 to 65 earning more than S$750 per month. This may lead to reduced take-home pay while helping to accumulate retirement savings.
Meanwhile, assess your insurance needs regularly, and keep a lookout for short-, medium- and long-term opportunities to make your money work harder.
Now to ring in a year of abundance with these actionable moves.
1. Reining in rising healthcare costs
Rising healthcare costs remain a top concern for many Singaporeans, driven by an expected 16.9% surge in medical costs due to factors such as more expensive medical equipment, treatments and labour.
To ensure sustainability of healthcare insurance in Singapore, the Ministry of Health has announced Integrated Plan (IP) rider changes to address over-treatment and overconsumption that had led to ballooning private healthcare bills. Nearly 71% of Singapore residents own an IP, and about two-thirds have riders. While the changes will result in higher out-of-pocket expenses for some, premiums are expected to be about 30% lower.
From 1 April, new IP riders will no longer cover the minimum deductibles. IP holders with the new riders will also need to pay a larger portion of their bills, as the co-payment cap doubles to S$6,000 from the current S$3,000.
Those who bought IPs with riders before the November 2025 announcement will not be affected immediately, pending insurers’ decision.
For those with IPs, review your plan. Do you continue or downgrade to a lower ward plan and/or rider? Weigh the savings against the benefits you would forgo.Â
2. Optimising CPF monies
You can build your retirement savings by topping up your own CPF account and your loved ones’ CPF Special Account (SA) if they are below age 55 or Retirement Account (RA) if they are aged 55 and above. And enjoy tax relief of up to S$16,000 per calendar year, while recipients will benefit from the extra interest.
Last year, the SA closed for those aged 55 and above. For those yet to turn 55, the RA will be created and SA will be closed on their 55th birthday. Monies from their SA will flow to their RA up to the Full Retirement Sum (FRS); any excess is channelled to the Ordinary Account (OA).
Consider working your CPF monies harder under CPF Investment Scheme (CPFIS) to potentially achieve returns higher than the OA’s annual return of 2.5%. There is a wide range of asset classes such as equity, fixed income and multi assets, offering exposure across developed, emerging, regional, and global/multi markets.
From January last year, the Enhanced Retirement Sum (ERS) was raised to 4 times of Basic Retirement Sum (BRS). This year, the BRS is S$110,200, the FRS is S$220,400 while the ERS is S$440,800. This gives room for members (like me) who wish to top up their RA for higher payouts.
At the start of this year, I did a top-up of S$14,800 to my RA to the prevailing ERS (ignore the interest component) and will continue to do so each year, to enjoy higher monthly payouts when I start my CPF Life payouts at age 65 or later. I also topped up S$3,500 to my CPF MediSave to the Basic Healthcare Sum of S$79,000 to enjoy tax relief in Year of Assessment 2027.
Furthermore, I made a cash top-up to my mom’s RA under the CPF Retirement Sum Topping-up Scheme for tax relief and interest (up to at least 6%). I also contributed S$2,000 to my mom’s RA under the Matched Retirement Savings Scheme. Although this attracts no tax relief, the government matches this with a S$2,000 top-up into her RA this year. Doing this for the next 9 years would mean a government top-up of S$20,000 in total for her.
3. Reviewing home loans
Falling interest rates have spurred more proactive financial decisions among homeowners. There is increased interest in fixed-rate home packages, and an uptick in refinancing and repricing applications, particularly among customers whose existing loans have exited the lock-in period, and are on floating rates. Seeking stability, many are opting for lower fixed-rate loans to secure predictable repayment terms and reduced monthly instalments.
A home loan is a long-term commitment. Regular reviews ensure that your mortgage package stays relevant to your financial needs. Options include switching to another package, or right-sizing your loan amount via repayments.
Check for penalties as most packages have a 2- to 3-year lock-in period. Also evaluate if a refinancing package offers flexibility for changes, such as selling the property or rising interest rates. Also consider the switching costs such as legal fees and valuation fees. Some banks offer a subsidy to help customers defray some of these costs.
