2016 ENHANCEMENTS

Find out more about the options available to you and how you can grow your savings for a better retirement.

More Savings

The CPF salary ceiling is the maximum amount that you and your employer contribute CPF for. From 1 January 2016, it has increased from $5,000 to $6,000.

With the higher salary ceiling, both you and your employer contribute more to your CPF. This means you save a little more each month for your future.

*Based on employer contribution rates for members 55 and below in 2016

To learn more about CPF contribution rates, click here.

To help older workers save more, the CPF contribution rates for workers between 50 and 65 years old have increased by 0.5% to 2%.

The increase in employer contribution rate will go to your Special Account, while the increase in employee contribution rate will go to your Ordinary Account.

These contribution rates will apply to you in the month after your birthday.

After you turn 55, you will earn an additional 1% extra interest on the first $30,000 of your combined CPF savings (with up to $20,000 from your Ordinary Account). This means you could earn up to 6% in interest each year on this amount. This is on top of the 1% extra interest that is earned on the first $60,000 of your combined CPF balances, which is applicable to all CPF members.

To learn more about CPF interest rates, click here.

More Options

On your 55th birthday we will create a Retirement Account for you. Savings from your Special Account and Ordinary Account will be transferred to your Retirement Account to form your retirement sum.

This retirement sum will provide you with a monthly payout from your payout start age. The amount of payout you will receive depends on your retirement sum and your choice of CPF LIFE plan. You will only need to choose your CPF LIFE plan when you start your payouts

If you desire higher monthly payouts, you can choose to top up your Retirement Account up to the Enhanced Retirement Sum ($241,500 in 2016) after you turn 55. This top-up can come in the form of cash or CPF savings.

If you make a cash top-up to yourself up to the current Full Retirement Sum of $161,000, you will qualify for tax relief of up to $7,000. Cash top-ups beyond the Full Retirement Sum of $161,000 are not eligible for tax relief.

1 Based on CPF LIFE Standard Plan parameters in 2016.
2 For members turning 55 in 2016.
3 Members 55 years old and above can top-up to the current Enhanced Retirement Sum.

Learn more about topping up.

Consider building up your spouse's retirement savings. If you already have the Basic Retirement Sum, you can transfer your CPF savings above that to your spouse’s Special Account or Retirement Account. This way, both you and your spouse can have your own source of retirement payouts.

Before

Bala and Shanti's CPF savings and corresponding monthly payouts.

After

Bala transfers his CPF savings above his Basic Retirement Sum to Shanti's CPF account.

After this transfer, Shanti is no longer reliant on Bala’s CPF LIFE payout, and will have her own source of retirement income even after Bala passes on.

Aside from your spouse, you can also top up your loved ones’* CPF savings to help them build up their retirement savings. If you have loved ones above 55, you can top up their Retirement Account up to the Enhanced Retirement Sum of $241,500. Do note that cash top-ups to your loved ones, up to the current Full Retirement Sum, are eligible for tax relief of up to $7,000.

*Loved ones refers to one’s parents, parents-in-law, grandparents, grandparents-in-law, spouse and siblings.

If you join or are placed on CPF LIFE, you have the option to start your payouts later (any time between your payout eligibility age and 70) to receive higher payouts. For every year you defer the start of your payouts, your monthly payouts increase by up to 7%.

You will only need to choose your CPF LIFE plan when you start your payouts.

~Based on CPF interest rates of up to 6% p.a. for members aged 55 and above from 2016
*Payouts are estimates based on CPF LIFE Standard Plan parameters in 2016.

When you reach your payout eligibility age, you have the option to withdraw up to 20% of your Retirement Account savings* in a lump sum. This is inclusive of the first $5,000 that is withdrawable from age 55. You will receive your balance Retirement Account savings in the form of monthly payments.

Do note that if you make this withdrawal, it will reduce your monthly payouts. So, carefully weigh your long-term retirement needs against short-term ones.

  Option A Option B
Basic Retirement Sum at 55 years old: $80,500 (after withdrawing $5,000). This grows to about $125,000~ at 65 years old. Do not make any withdrawal and joins CPF LIFE with entire Retirement Account balance.

Monthly payout for life of about $660 – $720#.
Withdraw about $20,000 (20% x $125,000 = $25,000 less the $5,000 already withdrawn at 55).

Monthly payout for life decreases to about $570 – $620#.

*Applicable to members who turned / will be turning 55 from 2013 onwards.
~Based on CPF interest rates of up to 6% p.a. for members aged 55 and above from 2016
#Payouts are estimates based on CPF LIFE Standard Plan parameters in 2016.