At the same time, the maximum amount people can put in their CPF Retirement Accounts to accrue interest and receive retirement payouts will be raised.
The Enhanced Retirement Sum will be pegged to four times the Basic Retirement Sum from Jan 1, 2025, up from the current three times.
These sums are retirement targets set by the CPF Board, with each unlocking different tiers of monthly payouts 10 years later. They are adjusted annually to account for inflation and other factors.
The smallest is the Basic Retirement Sum, followed by the Full Retirement Sum and Enhanced Retirement Sum.
For 2025, the Basic Retirement Sum is S$106,500 (US$79,200). In turn, the Full Retirement Sum, which is twice the Basic sum, is S$213,000 and the revised Enhanced Retirement Sum will be S$426,000.
IF YOU ARE TURNING 55 SOON …
Not everyone will be affected.
Only those who have accumulated “significantly” more than the Full Retirement Sum in their Special Accounts will feel an impact from the policy change, said Mr Loo Cheng Chuan, the founder of local personal finance movement 1M65.
He recalled how the movement’s Telegram chat group was flooded by questions when the announcement was made.
The 1M65 movement teaches couples how to save S$1 million in their CPF accounts by age 65. Understandably, some of its members will be affected by the upcoming rule change, including Mr Loo who turns 55 in three years.
“When it was first announced, there were many questions. Even I took some time to understand the implications but after that, I realised it’s not too bad a deal,” he told CNA, citing other existing CPF rules that will ease concerns about the loss of flexible withdrawals.
These include provisions that allow members born in 1958 and after to withdraw up to 20 per cent of their Retirement Account savings – excluding cash top-ups, CPF transfers and government grants – after they turn 65.
“These will still allow you to draw out some money – not the full amount but still a significant sum that will be enough for most people,” said Mr Loo.
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