Central Provident Fund (CPF) members aged at least 55 will no longer have a Special Account from 2025 onwards, but they will be able to put more money into their Retirement Accounts, said Deputy Prime Minister Lawrence Wong in his Budget speech on Friday (Feb 16).
These moves are meant to better support the retirement needs of seniors in Singapore, he added.
The Enhanced Retirement Sum is the maximum amount that CPF members can put into their Retirement Accounts to receive payouts. It is currently set at three times the Basic Retirement Sum (BRS), but will be increased to four times the BRS next year.
“This will allow more members aged 55 and above to fully commit their accumulated CPF savings to receive higher payouts, should they wish to do so,” he said.
WHAT IT MEANS
Having more money in a CPF Retirement Account translates to bigger monthly payouts. According to the Ministry of Finance, a CPF member with three times the Basic Retirement Sum in 2025 can have an estimated monthly payout of S$2,530 (US$1,880).
By comparison, a member with four times the BRS next year – or S$426,000 – can receive an estimated monthly payout of S$3,330.
CPF members can voluntarily top up their Retirement Accounts by transferring savings from their Ordinary Account or by making cash top-ups.
Meanwhile, the closure of Special Accounts means that savings in the account will be transferred to the Retirement Account up to the Full Retirement Sum, which is two times the basic sum.
“The remaining (Special Account) savings will be transferred to the Ordinary Account. Of course, members can voluntarily transfer these OA savings to the RA at any time, up to the revised (Enhanced Retirement Sum), to earn higher interest and to receive higher retirement payouts,” said Mr Wong.
From 2025, seniors above the age of 70 will also be eligible for dollar-for-dollar matching for cash top-ups to their CPF accounts, under the Matched Retirement Savings Scheme.
“This will enable more Singaporeans to meet their retirement needs, with the help from their families, with employers and the community,” said Mr Wong.
Currently, the scheme applies only for Singaporeans aged 55 to 70.
He added that the annual matching cap will be increased from S$600 to S$2,000, with a lifetime matching cap of S$20,000. But tax relief for CPF cash top-ups will be removed because the matching grant is “already a significant benefit extended by the government”.
CPF contribution rates for older workers will also increase as planned, Mr Wong said. The rate for workers aged 55 to 65 will rise by 1.5 percentage points next year.
Employers can receive a CPF Transition offset to cover half of the increase in employer contributions to cushion business costs.
CNA
