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With greater job uncertainty, how can freelancers plan for retirement?

SINGAPORE: When 27-year-old Gabriel Yip started freelancing as a camera assistant a year ago, in some months he could earn two to three times his previous salary as a full-time employee.

He makes it a point to put aside some money each month for savings and retirement, but being a freelancer meant it became more difficult to commit to a steady amount. 

“My income became more irregular ... so when I make more this month, I put a bit more, then when I make less, I put less,” Mr Yip said. 

Adding to the uncertainty, gigs dried up when the COVID-19 pandemic hit.

“A lot of my peers and I resorted to food delivery, package delivery or odd jobs (during the 'circuit breaker’ period)," he said.

“I was just focused on the day to day first. Retirement had to take a backseat for a while because I had to make sure I had enough money to even pay my bills." 

READ: Am I planning right for retirement, especially in a downturn? Financial experts answer some common questions

Mr Yip’s experience is not uncommon among full-time freelancers and people who are self-employed. They make up a growing part of the labour force.

There were an estimated 190,900 such “primary own account” workers in Singapore last year – a 9 per cent increase from the 174,800 in 2019, according to the Manpower Ministry’s Labour Force Survey.

“Retirement planning in a world where you did get employment for life, employers gave you really good benefits, and pension plans that covered your remaining life … that’s clearly gone,” said Mr Christopher Gee, a senior research fellow at the Institute of Policy Studies (IPS).

“Worse still is if the payment stream is not regular, you get ad hoc payments, lump-sum amounts … all of this volatility in earnings puts a lot of onus on the gig workers to be disciplined enough, to have the will to put aside that certain amount,” he added.


With the pandemic heightening job uncertainty for this group, there are some steps workers can take to ensure retirement planning is not being sidelined.

First, people who are self-employed should aim to create an emergency fund that can cover their living expenses for a minimum of six months, said Mr Raymond Ng, the vice president of the Association of Financial Advisors (Singapore).

The next step is to get insurance to protect one from short-term financial hardships that can derail long-term financial goals, he said.

This is crucial for freelancers, he added, because they miss out on salaried employees’ benefits like medical coverage and CPF contributions.

“Let’s say for a delivery rider, if he gets into an accident, maybe one or two weeks he can’t work, then this affects his income. The medical cost is also borne by him,” said Mr Ng.

READ: 'It always helps when you know you are not alone': Freelancers rally online after taking hit from COVID-19 outbreak

He added that if a worker is tight on finances, the insurance plan does not need to be “very comprehensive”, but health insurance is key. Freelancers can also consider getting income replacement or disability insurance if possible.

“With all that in place … then they can start to think of setting goals for a retirement plan. They need to have certain parameters,” said Mr Ng.

That includes whether they hope to totally or partially retire, how much their core expenses would be and what kind of lifestyle they want to lead after retiring.

He also advised self-employed individuals to contribute to their own CPF accounts. An alternative would be to look at what private insurers can offer, he said.

Ultimately, Mr Ng emphasised that the key principle of retirement planning is to start early.

“The compound effect is very important ... Start late and you may struggle to create the same fund (that you would have if you started earlier).”


Ms Azurah Jan Che Onn Azahar, a 29-year-old freelance audio content creator, agreed that starting early is important. That is why she wishes there had been more formal education about retirement planning as a freelancer.

Ms Azurah, who is also a music educator, said she was taught in school about the business aspect of the music industry, but she had to learn the ropes of managing finances on her own.

“It was purely due diligence, researching and asking around because this is new to me. And I’m sure other freelancers (can) relate because we are not taught," she said.

One of her projects, The Freelancers Academy, now aims to provide information for other freelancers in the industry. That includes, for example, content on how freelancers should protect themselves from income loss.

“When you’re young, freelancing is a joy … But if you don’t know how to save, where to put your money, in time to come, later on in life, it’s going to bite you.

“I have met freelancers who are facing this right now … so it’s also like when you’re in the industry, you learn from other peoples’ mistakes,” she said.

READ: Commentary: The curse of late payments plaguing freelancers

Mr Yip agrees that more could be done to formalise such education about financial planning as a freelancer.

“Most of us, around my age especially, we know the importance of savings already … But I think (it's an issue of educating us about) how can we do it?”

In particular, Mr Yip said there could be greater effort to teach this section of the labour force how to invest, because “life as a freelancer is very fragile”, and this might help give them some protection.

Ultimately, successful retirement planning boils down to self-discipline, said Ms Azurah, adding that one must bear the responsibilities of going down the path of freelancing. 

IPS’ Mr Gee also said that while financial planning is a concept that is easy to talk about, it is difficult to act on.

“The reality is that many workers will struggle to do this themselves. The ideal is we adapt our current institutions to accommodate this group of workers,” he said.

“Whatever platform they might be using to find work … like Grab, Gojek, they need to be able to (link CPF accounts) with that platform and accept a standing instruction,” Mr Gee added.

He also suggested making systems more flexible, such that a sum of money can be channelled towards CPF only once an earning threshold is hit, giving workers the assurance that they have enough for their living expenses first, for example.


In response to CNA’s queries on how policies can accommodate this group of workers, the CPF Board said the proportion of self-employed persons (SEP) in the Singapore workforce “has remained stable" at between 8 and 10 per cent throughout the last decade.

It added that SEPs are currently required to contribute a portion of their income to their MediSave account every year to help them save for their healthcare needs.

To further facilitate contributions for this group, the Government started piloting the Contribute-as-you-Earn (CAYE) scheme at the start of last year. Under this scheme, government agencies paying SEPs contribute part of the payment to the individual’s MediSave account.

READ: 1,000 self-employed individuals asked to return COVID-19 SIRS payouts due to erroneous declarations

“This eases the process for SEPs as MediSave contributions would be made on their behalf as and when they earn, and the time lag between earning and contributing is minimised,” it said.

The Government provided dollar-for-dollar matching for contributions under the scheme last year, and by end-March, about S$0.6 million in MediSave contributions had been made by 2,253 SEPs under the CAYE pilot, the board said. 

“Besides saving for their healthcare needs, SEPs, like other workers, also need to save for their retirement. We hope that they can make conscious efforts to contribute to their CPF regularly.”

One simple way of doing this is to sign up for GIRO plans to make regular contributions to their Special or Retirement Account, the CPF Board said.

It added that SEPs below the age of 55 can get “attractive interest rates of up to 5 per cent”, while those 55 and above can get rates of up to 6 per cent.

READ: About S$1.8 billion paid out to 200,000 self-employed people under COVID-19 relief scheme

“If they do so early and regularly, their CPF savings can compound substantially over time to boost their retirement savings. They would also be able to enjoy tax savings by topping up,” the CPF Board said.

It also said eligible SEPs aged 55 to 70 can benefit from the new Matched Retirement Savings Scheme (MRSS), introduced last month.

With this scheme, the Government will provide dollar-for-dollar matching for cash top-ups to Retirement Accounts, capped at S$600 per year for the next five years.

Source: CNA/cl(gs)


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