The CPF Retirement Sum is a key element of Singapore’s retirement planning framework, managed by the Central Provident Fund (CPF). It ensures that individuals have sufficient savings to support themselves during their retirement years.
When a person turns 55, their Special Account (SA) and Ordinary Account (OA) balances are transferred to a newly created Retirement Account (RA), which provides monthly payouts to cover living expenses after retirement.
In 2024, the CPF Retirement Sum framework will see several updates to its Basic, Full, and Enhanced Retirement Sums (BRS, FRS, ERS), reflecting the rising cost of living and inflation. This article provides an overview of these updates, policy changes, and eligibility criteria.
CPF Retirement Sum 2024 Overview
With rising inflation, the Singapore Government adjusts CPF guidelines to ensure that individuals have adequate savings for their retirement.
The CPF Retirement Sum acts as a personal savings target, determining the monthly payouts retirees will receive based on their savings. These payouts help individuals cover their expenses during retirement. The CPF scheme includes three tiers:
- Basic Retirement Sum (BRS): Covers essential living expenses.
- Full Retirement Sum (FRS): Covers additional costs such as accommodation.
- Enhanced Retirement Sum (ERS): Provides the highest monthly payout for greater financial security.
Basic, Full, and Enhanced Retirement Sum Updates for 2024
Below are the updated figures for BRS, FRS, and ERS from 2024 through 2027.
| Year | Basic Retirement Sum (BRS) | Full Retirement Sum (FRS) | Enhanced Retirement Sum (ERS) |
|---|---|---|---|
| 2024 | S$102,900 | S$205,800 | S$308,700 |
| 2025 | S$106,500 | S$213,000 | S$319,500 |
| 2026 | S$110,200 | S$220,400 | S$330,600 |
| 2027 | S$114,100 | S$228,200 | S$342,300 |
Monthly Payout Estimates
- BRS (2024): Monthly payouts between S$840 to S$900 from age 65.
- FRS (2024): Monthly payouts between S$1,560 to S$1,670 from age 65.
- ERS (2024): Monthly payouts of around S$2,530 to S$2,690, depending on the year.
CPF Retirement Sum Policy Changes for 2024 and Beyond
Several policy changes are planned for 2025, which aim to further enhance retirement payouts. The Singapore Government has increased the ERS monthly cap to ensure that retirees receive higher payouts. The table below highlights the expected ERS changes starting from 2025:
| Year | Current ERS Cap | Estimated Payout | New ERS Cap | Estimated Payout |
|---|---|---|---|---|
| 2025 | S$319,400 | S$2,530 | S$426,000 | S$3,300 |
| 2026 | S$330,600 | S$2,610 | S$440,800 | S$3,440 |
| 2027 | S$342,300 | S$2,690 | S$456,400 | S$3,550 |
These changes are aimed at helping seniors adjust to the rising cost of living and ensuring they have enough for retirement.
It’s important to note that monthly payouts are based on CPF Life plans, and the figures shown above are for individuals who start receiving payouts under the CPF Life Standard Plan at age 65.
CPF Retirement Sum Eligibility Criteria
To benefit from the CPF Retirement Sum, individuals must meet specific eligibility criteria:
- Age: Individuals must be at least 55 years old to start building a Retirement Account (RA).
- Citizenship/Residency: Singapore citizens or Permanent Residents are eligible for CPF payouts.
- Income Requirement: Individuals born before 1958 and not enrolled in CPF Life can receive payouts from their Retirement Account savings.
- Later Payout Option: Individuals under 70 may choose to start their payouts at a later date for higher monthly payments.
- Non-Singapore Citizens: Non-permanent residents of Singapore are eligible if they are at least 65 years old.
The payout can be set to continue until the individual runs out of savings or turns 90. CPF offers up to 6% annual interest on Retirement Account balances, which ensures long-term growth of retirement funds.
How the CPF Retirement Sum Works
When an individual turns 55, their CPF savings from the Special Account (SA) and Ordinary Account (OA) are transferred to the Retirement Account (RA). The FRS acts as the cap for the amount transferred into the RA, and any remaining funds beyond the FRS are kept in the OA and can be withdrawn if desired.
- Special Account Savings: The first to be transferred into the RA.
- Ordinary Account Savings: Transferred to the RA after the SA savings, up to the FRS.
- Withdrawal Options: Once the FRS is set, excess funds in the OA can be withdrawn by the account holder at any time.
From 2025 onwards, for individuals aged 55 and above, the SA will be closed, and savings will be directly transferred to the RA for higher interest rates.
This ensures retirement savings are optimized for long-term growth and provide sufficient income during retirement.
The CPF Retirement Sum provides a structured and reliable way for Singaporeans to save for retirement, ensuring financial stability in their later years.
With updates to the BRS, FRS, and ERS, the government is working to keep pace with inflation and rising costs of living. As these changes unfold, individuals are encouraged to review their CPF accounts and ensure they are on track to meet their retirement goals.
FAQs
What is the Basic Retirement Sum for 2024?
The Basic Retirement Sum (BRS) for 2024 is S$102,900.
How much will the Full Retirement Sum (FRS) increase by in 2024?
The Full Retirement Sum (FRS) for 2024 is S$205,800, with gradual increases projected through 2027.
What is the Enhanced Retirement Sum (ERS) in 2024?
The Enhanced Retirement Sum (ERS) in 2024 is S$308,700, providing higher monthly payouts.
What changes will take place in the CPF Retirement Sum by 2025?
In 2025, the ERS monthly cap will increase significantly, leading to higher monthly payouts of up to S$3,300.
Who is eligible for the CPF Retirement Sum?
Singapore citizens or permanent residents aged 55 and older are eligible, provided they meet the savings and residency requirements.
