CPF Retirement Sum Scheme (BRS, FRS, ERS): Guide [2025]

CPF Retirement Sum Scheme (BRS, FRS, ERS): Guide

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CPF Retirement Sum Scheme (BRS, FRS, ERS) Guide

Planning for retirement can be overwhelming, especially when it comes to understanding your CPF Retirement Sum.

But don’t worry, I’ve been there too – confused by all the options and unsure how to make the most of my CPF savings.

In this post, you’ll learn:

  • What the CPF Retirement Sum is and the different tiers (BRS, FRS, ERS)
  • How to boost your retirement savings through voluntary top-ups
  • Ways to maximise your employer’s CPF contributions
  • Why transferring your excess funds to earn higher interest is a smart move

 

If you’re ready to make the most of your CPF and ensure a comfortable future, keep reading to find out how.

What is CPF Retirement Sum?

The CPF Retirement Sum is part of Singapore’s Central Provident Fund (CPF) scheme, specifically tied to retirement savings.

It determines the amount of money a CPF member can withdraw from their CPF account upon reaching the eligible retirement age.

When you turn 55, a Retirement Account (RA) is created for you, and a portion of your savings from your Special Account (SA) and Ordinary Account (OA) is transferred into it.

This money will form the basis of your retirement sum, thus, for your monthly payouts when you retire.

There are 3 types of CPF Retirement Sums

There are 3 levels you can choose from depending on your retirement goals and financial situation.

Let’s start with the Basic Retirement Sum (BRS).

Basic Retirement Sum (BRS)

The Basic Retirement Sum (BRS) is designed for CPF members who own property and don’t need to worry about rent during their retirement.

It’s the minimum amount you’ll need to set aside to cover your basic living expenses after you stop working.

For those turning 55 in 2024, the BRS is $102,900.

Choosing the BRS means you’ll receive a smaller monthly payout, but this could be enough if you own a home and have fewer financial commitments in retirement.

The idea is that with a fully-paid home, your cost of living will be lower, so you can get by on less.

What’s great about the BRS is that it allows flexibility.

If you’re comfortable with the payout, you won’t need to pledge your property.

This might be ideal if you want to keep your home as an asset for future needs or to pass on to your loved ones.

Full Retirement Sum (FRS)

Next up is the Full Retirement Sum (FRS).

The FRS is essentially double the Basic Retirement Sum (BRS), meaning it gives you twice the monthly payout, but requires setting aside more in your Retirement Account (RA).

For those turning 55 in 2024, the FRS is set at $205,800.

The FRS is ideal for those who want a more comfortable retirement but don’t want to pledge their property.

By setting aside this amount, you ensure that you’ll receive higher monthly payouts compared to the BRS.

It’s a great option if you’re looking to live a bit more comfortably and cover more than just the basic essentials.

For instance, at the time of writing, with the FRS, your monthly payout under the CPF LIFE Standard Plan can range from $1,580 to $1,700 per month.

This higher payout can help you cover more of your living costs, such as healthcare, daily expenses, and perhaps even some leisure activities in your retirement years.

One important thing to note is that if you have enough in your CPF accounts to hit the FRS by the time you turn 55, you won’t need to pledge your property to meet this requirement.

This means that you’ll still have the option to keep your home and pass it down to your loved ones, while enjoying a larger payout.

If you’re able to commit to the FRS, it gives you greater financial security in your later years, without having to rely on other sources of income.

Enhanced Retirement Sum (ERS)

Finally, we come to the Enhanced Retirement Sum (ERS), which is the highest tier in the CPF Retirement Sum scheme.

For those who want the maximum monthly payouts and are willing to set aside a larger portion of their CPF savings, the ERS is the way to go.

In 2024, the ERS is set at $308,700, which is 3 times the Basic Retirement Sum (BRS), or 4x from 2025 onwards.

The ERS is for those who want to ensure they have a more substantial retirement income, whether to enjoy a more comfortable lifestyle, cover additional expenses, or simply have peace of mind.

This option is particularly suited to those who don’t have to worry about other financial commitments, such as rent or a mortgage, and want to lock in the highest possible payouts from their CPF LIFE plan.

Opting for the ERS doesn’t require pledging your property, making it an excellent choice if you have enough in your CPF accounts and want to maximise your retirement payouts.

It’s also worth noting that you can continue topping up your RA up to the ERS level even after turning 55, giving you more flexibility as your financial situation evolves.

What are the CPF Retirement Sums & how much will I get monthly?

Year that Members Reach Age 55 Basic Retirement Sum Full Retirement Sum Enhanced Retirement Sum
2022 $96,000 $192,000 $288,000
2023 $99,400 $198,800 $298,200
2024 $102,900 $205,800 $308,700
2025 $106,500 $213,000 $426,000
2026 $110,200 $220,400 $440,800
2027 $114,100 $228,200 $456,400

The amount you receive depends on which CPF Retirement Sum you meet:

Retirement Account Savings at 55 Your monthly payouts for life from 65 onwards
Basic plan Standard Plan (Default) Escalating Plan
Basic Retirement Sum (BRS) $730 to $800 $880 $690 to $1,260 (Increases at 2% every year)
Full Retirement Sum (FRS) $1,440 to $1,510 $1,650 $1,300 to $2,370 (Increases at 2% every year)
Enhanced Retirement Sum (ERS) $2,150 to $2,220 $2,430 $1,920 to $3,480 (Increases at 2% every year)

Figures are accurate as of September 2024

How are monthly payouts calculated?

CPF monthly payouts are calculated based on the amount you’ve saved in your CPF Retirement Account (RA) by the time you turn 65, along with other factors such as the CPF LIFE plan you choose, current interest rates, and your expected lifespan.

The more you have saved in your RA, the higher your payouts will be.

The CPF LIFE scheme, which provides these monthly payouts, ensures that your savings last throughout your retirement.

The calculation takes into account the interest earned on your Retirement Account (currently at 4% per annum for RA balances), and the expected duration of your retirement based on your lifespan.

CPF LIFE is designed so that you receive payouts for life, no matter how long you live.

This is why the scheme uses actuarial methods, balancing out your savings and the interest it earns, to determine your payouts.

By understanding how these factors interact, you can better plan for your retirement and optimise your CPF savings for the long term.

How do I boost my CPF Retirement Sums?

Voluntary cash top-ups

One of the most effective ways to boost your CPF Retirement Sum is through voluntary cash top-ups.

This allows you to increase your CPF savings in your Retirement Account (RA) to ensure higher monthly payouts when you retire.

By making voluntary contributions, you can top up your account to the Basic Retirement Sum (BRS), Full Retirement Sum (FRS), or even the Enhanced Retirement Sum (ERS), depending on your retirement goals.

These top-ups are particularly helpful if you’re looking to maximise your retirement income without solely relying on mandatory CPF contributions from your employment.

One key advantage of voluntary top-ups is that you may enjoy tax relief on cash top-ups.

If you top up your own CPF account, you can claim up to $8,000 in tax relief annually.

Additionally, if you top up your family members’ CPF accounts, such as your parents or spouse, you can enjoy another $8,000 in tax relief.

This is a great incentive for those who are looking to reduce their tax burden while securing a better retirement for themselves and their loved ones.

Maximising employer contributions

Another smart strategy to boost your CPF Retirement Sum is by maximising employer contributions.

Both you and your employer make monthly CPF contributions, which go into your Ordinary Account (OA), Special Account (SA), and MediSave Account (MA).

The key is to ensure you’re making the most of these contributions, especially during your working years.

Firstly, ensure you’re fully utilising the CPF contributions made by your employer.

Under the current CPF system, your employer contributes up to 17% of your monthly salary, while you contribute up to 20%, depending on your age.

These contributions go a long way in building your retirement savings, especially when they’re allocated to your OA and SA, which can later be transferred to your Retirement Account (RA) at age 55.

The SA is particularly useful since it earns an interest rate of 4% per annum, which is higher than most regular savings accounts.

One effective way to maximise employer contributions is to negotiate for a higher base salary when possible.

Since CPF contributions are based on a percentage of your wages, a higher salary directly increases the contributions to your CPF accounts.

This can significantly boost your retirement savings over time, particularly if you’re consistently contributing at the upper salary limit.

Another strategy is to maximise your bonus or performance-related pay, as CPF contributions apply to these as well, up to the annual salary ceiling of $102,000.

This means that if you receive a bonus or extra payments from your employer, you could be getting even more CPF contributions, which will further enhance your retirement sum.

Finally, if you’re self-employed or running a business, remember that you can still contribute voluntarily to your own CPF accounts, especially to your MediSave Account, which supports healthcare needs during retirement.

These voluntary contributions also come with the benefit of tax relief.

Transferring funds from your OA

If you’re looking to grow your CPF savings faster, transferring excess funds from your Ordinary Account (OA) to your Special Account (SA) or Retirement Account (RA) can be a highly effective strategy.

This allows you to take advantage of the higher interest rates offered by the SA and RA, helping you build a bigger nest egg for your retirement.

The Ordinary Account typically earns an interest rate of 2.5% per annum, which is still relatively decent but lower than the 4% per annum you can get in your Special Account or Retirement Account.

Rather than leaving those funds in the OA to earn 2.5%, transferring them to your SA or RA allows you to earn 4%, effectively increasing your returns without any extra effort.

It’s important to note that once you make this transfer, the funds cannot be transferred back to the OA.

So, it’s essential to ensure that you won’t need these funds for any short-term expenses, such as housing or education.

This strategy is best for those who are confident they can cover these needs without dipping into their CPF savings.

What is the significance of the CPF Retirement Sum?

The CPF Retirement Sum plays a crucial role in ensuring that you have enough savings to support yourself during retirement.

By setting aside a portion of your CPF savings in your Retirement Account, the CPF Retirement Sum determines the amount of monthly payouts you’ll receive for life.

It provides a steady income stream, helping you meet your basic living expenses after you stop working.

Depending on whether you opt for the Basic, Full, or Enhanced Retirement Sum, you can choose a level of financial security that best suits your retirement goals.

What if I can’t meet the Basic Retirement Sum?

If you can’t meet the Basic Retirement Sum (BRS), don’t worry – you’re not alone.

Even if your CPF savings fall short, you’ll still receive monthly payouts based on the amount you’ve saved in your Retirement Account.

You won’t be required to top up the difference, and your CPF savings will still provide some level of income during retirement.

Additionally, you can explore options like voluntary top-ups or CPF contributions from future employment to gradually increase your Retirement Account balance and boost your payouts over time.

Conclusion

In conclusion, boosting your CPF Retirement Sum is all about smart planning and taking advantage of the options available to you.

We’ve covered a few effective ways to maximise your CPF savings, including voluntary top-ups, making the most of employer contributions, and transferring excess funds from your Ordinary Account to your Special or Retirement Account for higher interest.

Each of these strategies can help ensure you have a more comfortable and secure retirement.

If you’re still feeling unsure or need more guidance on which approach works best for you, don’t worry!

You can chat with one of our trusted financial advisor partners for free.

They’ll help you figure out how to maximise your CPF and create a solid retirement plan that suits your unique needs.

Just reach out and we’ll connect you to someone who can guide you through the process.

After all, retirement planning doesn’t have to be stressful – especially when you’ve got the right support!

References

Picture of Firdaus Syazwani
Firdaus Syazwani
In 1999, Firdaus's mother bought an endowment plan from an insurance agent to gift him $20,000. However, after 20 years of paying premiums, Firdaus discovered that the policy was actually a whole life plan with a sum assured of $20,000, and they didn't receive any money back. This experience inspired Firdaus to create dollarbureau.com, so that others won't face the same problem of being misled or not understanding what they are purchasing – which he sees as a is a huge problem in the industry.

Disclaimer: Each article written obtained its information from reliable sources and should be purely used for informational purposes only. The information provided by Dollar Bureau and its affiliated parties is not meant to be construed as financial advice. Dollar Bureau shall not be held liable for any inaccuracies, mistakes, omissions, and losses incurred should you act upon any information listed on this website. We recommend readers to seek financial planning advice from qualified financial advisors. 

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