As Singapore’s population ages, ensuring financial security during retirement becomes increasingly important.
The Central Provident Fund (CPF) Retirement Sum is a critical component of this financial planning, offering Singaporeans a structured way to save and prepare for their golden years.
This article provides an overview of the CPF Retirement Sum updates for 2024, including the Basic, Full, and Enhanced Retirement Sums, as well as the latest policy changes.
CPF Retirement Sum 2024
The CPF Retirement Sum serves as a savings target for individuals to secure a steady income during retirement.
When Singaporeans turn 55, their CPF savings from the Special and Ordinary Accounts are transferred to a newly created Retirement Account (RA). This account is designed to provide financial support when they reach 65, with payouts based on the amount saved.
The CPF Retirement Sum is divided into three tiers: Basic Retirement Sum (BRS), Full Retirement Sum (FRS), and Enhanced Retirement Sum (ERS). Each tier offers different payout levels, reflecting the individual’s savings and their desired standard of living in retirement.
2024 Updates: Basic, Full, and Enhanced Sums
Basic Retirement Sum (BRS)
The BRS is intended to cover essential living expenses during retirement. As of 2024, the BRS for individuals turning 55 is capped at S$102,900. From the age of 65, individuals can expect monthly payouts ranging from S$840 to S$900.
The BRS will gradually increase over the next few years to keep pace with inflation and rising living costs:
- 2025: S$106,500
- 2026: S$110,200
- 2027: S$114,100
Full Retirement Sum (FRS)
The FRS is aimed at covering more comprehensive living costs, including housing and future expenses. For 2024, the FRS is set at S$205,800 for those turning 55. Monthly payouts starting at age 65 range from S$1,560 to S$1,670. Similar to the BRS, the FRS is expected to rise over the coming years:
- 2025: S$213,000
- 2026: S$220,400
- 2027: S$228,200
Enhanced Retirement Sum (ERS)
The ERS is the highest tier, offering the most substantial monthly payouts. It is suitable for individuals who wish to secure a higher income during retirement.
In 2024, the ERS is capped at S$308,700, with payouts starting at S$2,530 per month. Future increases are planned as follows:
- 2025: S$319,500
- 2026: S$330,600
- 2027: S$342,300
Key Policy Changes for 2024 and Beyond
Starting in January 2025, significant policy changes will be implemented to further enhance retirement savings.
One of the most notable changes is the increase in the ERS cap, which will be adjusted to S$426,000 in 2025, resulting in an estimated monthly payout of S$3,300. This cap will continue to rise in subsequent years, reaching S$456,400 by 2027 with a monthly payout of S$3,550.
These changes are part of a broader effort by the Singapore government to ensure that retirees have sufficient savings to maintain a comfortable lifestyle. The gradual increase in the Retirement Sums reflects the need to account for inflation and the higher cost of living.
| Year | Basic Retirement Sum (BRS) | Enhanced Retirement Sum (ERS) Cap (Before) | Monthly Payout (Before) | Enhanced Retirement Sum (ERS) Cap (After) | Monthly Payout (After) |
|---|---|---|---|---|---|
| 2025 | S$106,500 | S$319,400 | S$2,530 | S$426,000 | S$3,300 |
| 2026 | S$110,200 | S$330,600 | S$2,610 | S$440,800 | S$3,440 |
| 2027 | S$114,100 | S$342,300 | S$2,690 | S$456,400 | S$3,550 |
Eligibility Criteria
To benefit from the CPF Retirement Sum, certain eligibility criteria must be met. Primarily, these sums are designed for Singapore citizens and Permanent Residents (PRs). Non-citizens or PRs must be at least 65 years old to be eligible.
Additionally, individuals who were born before 1958 and are not enrolled in CPF LIFE can also qualify.
For those who do not meet the Full Retirement Sum (FRS), their savings will be transferred from their Special Account (SA) to their Retirement Account (RA) when they turn 55.
Any remaining savings after reaching the FRS can be withdrawn or transferred back to their Ordinary Account (OA).
The CPF Retirement Sum is an essential part of Singapore’s retirement planning framework, ensuring that citizens have the financial means to support themselves in their later years.
With the gradual increase in the Basic, Full, and Enhanced Retirement Sums, Singaporeans are encouraged to plan ahead and maximize their CPF savings.
Keeping abreast of these changes and understanding the implications of each tier will help individuals make informed decisions about their retirement finances.
FAQs
What is the Basic Retirement Sum (BRS) for 2024?
The BRS for 2024 is S$102,900.
How much is the Full Retirement Sum (FRS) in 2024?
The FRS is set at S$205,800 for 2024.
When will the CPF policy changes take effect?
The new changes will start in January 2025.
What is the Enhanced Retirement Sum (ERS) cap for 2025?
The ERS cap will be S$426,000 in 2025.
Can non-Singapore citizens benefit from the CPF Retirement Sum?
Yes, but they must be at least 65 years old.
