Here’s What Your CPF Full Retirement Sum Might Look Like When You’re 55

In Singapore, we’re trained to think about our long-term future and retirement from the day we start working. A portion of our monthly wages is channelled into our CPF accounts – and, in particular, our Special Account (SA) that’s meant for retirement savings.

Of course, our CPF contributions also go into our Ordinary Account (OA) and MediSave Account (MA). However, these accounts are primarily meant to pay for the downpayment and mortgage of our home, and medical treatments and procedures as well as MediShield Life, Integrated Shield Plans (IP) and CareShield Life insurance policies, respectively.

While we can also invest our SA balances, it already pays a decent interest rate of 4% per annum. Moreover, we can only invest sums above the first $40,000 in our SA.

For most people, this means monies in our SA just sit there, compounding every year, until it’s ready to be lumped with the balances in our Ordinary Account at 55 to fund our new Retirement Account (RA).

Read Also: CPF Medisave: Here’s How Your Basic Healthcare Sum Might Look Like When You’re 65

What Happens When You Turn 55?

When we turn 55, a new Retirement Account (RA) will be created for us, while our Special Account will be closed. Monies from our Special Account (SA) and Ordinary Account (OA) will be used to fund our RA, up to the Full Retirement Sum (FRS).

In 2026, the FRS amount is $220,400. For those who turn 55, this amount will be channelled into our RA – first from our Special Account, and if it is insufficient, the remaining sum will be drawn from our Ordinary Account. We also have the option to pledge a property we own and set aside either the Basic Retirement Sum (BRS) of $110,200 (0.5X the FRS) or the Enhanced Retirement Sum (ERS) of $440,800 (2X the FRS). For this article, we’ll just focus on the Full Retirement Sum (FRS).

The FRS is meant to safeguard a basic retirement in Singapore; therefore, it also needs to keep pace with inflation and a rising standard of living. In short, the FRS increases each year.

Anyone who turns 55 in 2026 will have to set aside $220,400. This is about 3.5% higher than what people who turned 55 in 2025 had to set aside, which was $213,000. In turn, those who turned 55 in 2025 had to set aside approximately 3.5% more than those who turned 55 in 2024 at $205,800. This should be no surprise, as the Minister for Finance, Lawrence Wong, revealed during the Singapore Budget 2022 that retirement sums will increase by 3.5% over the next five years, rather than the near-3 % increases in the preceding years.

Read Also: What Happens To Your CPF Monies After Transferring It To Your Retirement Account (RA) At Age 55?

Those Turning 55 In 2026 Will Have To Set Aside A Higher FRS

As discussed, anyone who turns 55 on or after 1 January 2026 will already know how much they need to set aside for their FRS. Post the Singapore Budget 2022 statement, delivered on 18 February 2022, we also know the FRS amount until 2027.

Source: CPF

As shown, the FRS increased by approximately 3% each year until 2022. Since then, it has risen by close to 3.5% each year. If inflation and the cost of living rise faster, the government has indicated it will increase retirement sums accordingly. With an FRS of $220,400 in 2026, an individual turning 55 in 2026 would be eligible for CPF LIFE payouts of approximately $1,780 every month when they turn 65 in 10 years’ time.

If we think this is insufficient, we should start planning for retirement as soon as possible and save more in our CPF accounts. From 2025, the Enhanced Retirement Sum (ERS) has been raised to 2X the FRS, as opposed to 1.5X the FRS previously. This allows us to save up to $440,800 in our Retirement Account in 2026.

We can also build complementary retirement nest eggs outside of our CPF accounts.

So, How Much Would I Need To Set Aside When I’m 55?

This question might not be a totally fair one to ask of the government today. While they try to provide as much foresight as possible, predicting inflation levels and the rising cost of living over the next 25 or 30 years may be very difficult, if not impossible. We’ve seen how an unforeseeable event like the pandemic in 2020 can impact the cost of living already.

Looking at past FRS figures, we see that people who turned 55 in 2003 needed to set aside only $80,000 for their FRS, while those turning 55 in 2023 need to set aside $198,800. And anyone who turns 55 in 2027 will need to set aside $228,200. This means the long-term compounded annual growth rate of our FRS may be closer to 4.5%.

Source: CPF

However, a 4.5% annual increase may be on the high side, as the latest FRS figures have only increased by 3.5% in recent years. Further, according to the Department of Statistics Singapore, the compounded annual growth rate of the MAS Core Inflation Measure increased close to 1.5% per annum since 2003. Since then, the MAS Core Inflation Measure has only beaten the 4.5% compounded annual growth rate on one occasion –  in 2008, when it increased 5.7%. Even in 2022, the MAS Core Inflation came in at 4.1%, and at 4.2% in 2023.

It could be that the earlier FRS figures were a low estimate at the start, and the government had to play catch-up subsequently. Nevertheless, the government has signalled it will act if it believes more needs to be set aside for our retirement, having already raised the rate of increase from 3.0% to 3.5% until 2027. This will likely be the case if inflation remains persistently high in the coming years.

Here’s How Much We May Need To Set Aside When We’re 55

At this point, we should also note that there’s no guarantee the CPF will continue to operate as it does now. In fact, there have been many changes to the CPF system in the past, and likewise, it could look very different in 25 or 30 years’ time.

We already know what the government expects someone turning 55 to have until 2027. We can also draw on past figures to gauge what to expect.

In the illustration below, we use both figures to better understand what may be in store for us.

Based on these figures, it doesn’t seem likely that the rate of increase can continue at an average pace of 4.5%. If this were the case, anyone who is 31 in 2026 would need to set aside nearly $630,000 in FRS by age 55 in 2050.

While challenging, higher CPF contributions through our salaries, which have risen to a monthly ceiling of $8,000 in 2026, may help increase our overall CPF savings. This move also indicates that the government will adjust CPF contribution rates if necessary. Also, nothing is stopping the increase in CPF contribution rates beyond 37% for those aged 55 and below. This is on the back of higher contribution rates we’ve seen among those aged 55 to 70 in recent years.

Again, during Budget 2022, it was announced that the retirement sums would increase by 3.5% annually until 2027. This is higher than the 3.0% level it had been increasing toward in the years just prior. If inflation remains persistently high, the FRS rates may be raised further.

According to the Ministry of Manpower, the median gross monthly income from work has increased at a compounded annual growth rate of more than 3.8% since 2012, and likely even higher if we look at median wages before then. This could shift the argument toward an average annual increase closer to 4.0% or even 4.5%.

Instead, if the FRS continues to increase by approximately 3.5% each year, we would see our FRS exceed $500,000 for those who are 31 and younger today. While this is a substantial sum, it is below the average wage growth rate over the past 10 years. So, an entirely plausible sum.

Of course, if the annual increase in FRS tapers to 1.5% per annum, closer to Singapore’s average long-term core inflation, the FRS will rise to a more reasonable level of over $320,000 for those who are 30 in 2025.

At the same time, the last thing we would want is to retire only to find that our lifelong monthly CPF payouts are insufficient to keep pace with inflation.

No one knows what will happen in the future, but we should work toward a retirement goal we’re comfortable with and ensure our plans do not rely solely on CPF LIFE payouts.

Read Also: Why Increasing Our CPF Monthly Salary Ceiling To $8,000 In Singapore Budget 2023 Was A Necessary Step