Main changes to CPF in 2025

The government has introduced notable changes to CPF in 2025, which could have far-reaching effects on Singaporeans. While the purpose of CPF remains the same (i.e., to provide for retirement, as well as needs like health and housing), tweaks to the Enhanced Retirement Sum (ERS) as well as higher contribution rates for some seniors could justify some changes to your financial planning. Here’s what it’s all about.

The changes to expect include:

1. No more Special Account (SA) if you’re 55 and above

As of 19th January 2025, the SA was closed for members aged 55 and above. Balances from your SA are transferred to your Retirement Account (RA), up to the Full Retirement Sum*. If you still have any excess monies left, these would have been moved to your Ordinary Account (OA).

*To see the Basic Retirement Sum for you, check out this table from CPF.

2. Increased Enhanced Retirement Sum (ERS)

Starting from 2025, the ERS will be raised to four times the Basic Retirement Sum (BRS). The BRS in 2025 is $106,500, so the new ERS will be $426,000.

(Prior to 2025, the ERS was only triple the Basic Retirement Sum, or $318,000).

Meeting the ERS allows you to receive even higher CPF LIFE payouts, once you turn 65. While you should check with the CPF Board to find out the specific of your payout, here’s a general look at how it works:

So if you’re willing to put more in your CPF, such as by paying for your flat loan with more cash, making more voluntary top-ups, and so forth you will be rewarded by higher payouts after you turn 65.

3. A higher CPF monthly salary ceiling

From 1st January 2025, the CPF monthly salary ceiling (i.e., the maximum you can contribute to CPF) will be raised from $6,800 to $7,400.

The ceiling will rise again to $8,000 by 2026, if all goes to plan.

The reason for this is mainly to keep pace with rising wages and inflation. As wages grow and the cost of living goes up, CPF contributions have to rise as well.

4. An Enhanced Matched Retirement Savings Scheme (MRSS)

The Matched Retirement Savings Scheme (MRSS) is to help lower- to middle-income seniors boost their CPF retirement savings. Under this scheme, the government matches every dollar of voluntary CPF top-ups made to your Retirement Account (RA), to a certain limit.

Previously, the limit was $600; but now the limit is raised to $2,000, with a lifetime cap of $20,000.

For example, if you make a voluntary top-up of $1,000, the government will also put in $1,000 to your CPF for you (up to $2,000 a month, or up to $20,000 in your lifetime.)

This scheme was originally meant to help “late bloomers” catch up financially; such as those who were not earning much before, but later became more successful. MRSS helps them to build up their retirement fund over a shorter period.

Before 2025, MRSS was only available to Singaporeans aged 55 to 70. From now on however, it’s available even if you’re past the age of 70.

5. You have to contribute more to CPF though, if you’re older:

From 2025 onward, CPF contribution rates for employees 55 or older will increase by 0.5 percentage points for employers, and one percentage point for employees.

This may not feel as good, as you need to park more of your monthly earnings with CPF. But if you look on the good side, this is helping to ensure your coming retirement is a happier and more enjoyable one.

Besides CPF, you can also look at other ways to boost your retirement savings. For example, some insurance policies also come with annual, lifetime payouts, and with the flexibility to change your plans as appropriate. These can be coupled with your CPF payouts, to give you the ideal retirement you’ve worked so hard for.

Book a complimentary financial planning session with our representatives below to find out more.

Source: CPF website