To ensure we have sufficient savings during our retirement, we contribute a percentage of our monthly gross salary to our CPF during our working years.
From 2025 onwards, those who turn 55 will have a new CPF Retirement Account (RA) to replace their Special Account. When this happens, our Retirement Account will be filled up to the Full Retirement Sum (FRS) – coming from our Special Account (SA), followed by our Ordinary Account (OA). At the same time, our Special Account will be closed, and any remaining funds will be transferred to our OA.
Funds in our Retirement Account are then set aside for the next 10 years, earning a floor interest rate of 4.0% per annum. When we turn 65 at the end of the 10 years, our Retirement Account savings will go into the CPF LIFE scheme – our national longevity annuity scheme that provides us with monthly payouts throughout our lifetime.
While the initial retirement sum is capped at the FRS while we still have our Special Account (i.e. for those below 55), we can top up to the prevailing Enhanced Retirement Sum (ERS) in our Retirement Account (i.e. after turning 55) to receive higher monthly payouts from CPF LIFE.
In this article, we look at understanding what the CPF ERS is and how it can benefit us.
Read Also: Complete Guide To CPF Retirement Account
#1 The Enhanced Retirement Sum (ERS) Was Introduced In 2016
The Enhanced Retirement Sum (ERS) was introduced in 2016 after a review by the CPF Advisory Panel in September 2014 to make the CPF more flexible and dynamic. It is one of the three levels of retirement sums to give CPF members more choices for CPF LIFE payouts. The other two levels are the Basic Retirement Sum (BRS) and the Full Retirement Sum (FRS).
To provide a recap, initially, a Minimum Sum Scheme (MSS) — later renamed the Retirement Sum Scheme (RSS) — of $30,000 was introduced on 1 January 1987. This single amount, also known as the retirement sum, was intended to be set aside in the RA when we turn 55 to provide monthly payouts over a fixed duration. It was based on the basic expenses of a lower-middle-income household and was periodically adjusted.
Read Also: What Happens To Your CPF Contributions After You Hit Full Retirement Sum (FRS)?
#2 ERS Is The Maximum Amount We Can Top Up Our RA After Age 55
The Enhanced Retirement Sum (ERS) is the maximum amount CPF members aged 55 and above can voluntarily set aside in their Retirement Account (RA) to receive higher monthly payouts under CPF LIFE. From 1 January 2025, the ERS was raised from three times the Basic Retirement Sum (BRS) to four times the BRS. That meant the ERS increased from $319,500 in 2024 to $426,000 in 2025. In 2026, the ERS is $440,800. In contrast, the BRS is meant to cover basic retirement expenses for members who can continue to rely on a property for their retirement needs.
The FRS remains the main benchmark for setting aside retirement savings, and it is set at two times the BRS. For members turning 55 in 2026, the FRS is $220,400, while the BRS is $110,200.
Read Also: Here’s What Your CPF Full Retirement Sum Might Look Like When You’re 55
#3 The ERS Increases Every Year
While the BRS and FRS are fixed for the rest of our lives based on the cohort sum when we turn 55, the ERS increases annually. As mentioned earlier, the ERS takes reference to the BRS and, therefore, follows a similar increment each year.
The BRS in turn takes reference to a person’s expenditure from a lower-middle retiree household, according to the latest Household Expenditure Survey (HES). It further assumes that the member owns a property that lasts him up to 95 and does not need to make any rent payments during his retirement years. Additionally, the BRS will be raised by about 3.5% per year for each cohort turning 55 from 2023 to 2027 to account for longer life expectancy, higher inflation costs, and rising living standards.
This allows us to continually top up our RA to the ERS each year, enabling us to receive higher CPF LIFE payouts to fund our retirement needs.
#4 The ERS Has Been Increased To 4 Times The BRS From 2025 Onwards
As announced in Budget 2024, the ERS will be raised from the current 3 times of the BRS to 4 times in 2025.
| Year | BRS | FRS | Before Changes (ERS at 3x the BRS) | Revised ERS from 1 January 2025 (ERS at 4x the BRS) |
| 2024 | $102,900 | $205,800 | $308,700 | N.A. |
| 2025 | $106,500 | $213,000 | $319,500 | $426,000 |
| 2026 | $110,200 | $220,400 | $330,600 | $440,800 |
| 2027 | $114,100 | $228,200 | $342,300 | $456,400 |
Source: MOF
In other words, if the previous cap had remained in place, the ERS for 2025 would have been $319,500. With the revision to 4× the BRS, the ERS increased to $426,000 for 2025 and is at $440,800 for 2026.
This higher cap gives CPF members greater scope to voluntarily top up their Retirement Account and, in turn, receive higher lifelong monthly payouts under CPF LIFE.
#5 ERS Allows Us To Receive Higher CPF LIFE Payouts
Because the ERS is the highest of the three retirement sum tiers, it also offers the potential for the highest CPF LIFE monthly payouts. However, the actual payout amount will still depend on factors such as when we top up our Retirement Account and the age we choose to start payouts.
Based on the revised ERS of $426,000 from 1 January 2025, a male CPF member who turns 55 in 2025 and tops up to the new ERS in 2025 can expect about $3,300 a month from age 65 under the CPF LIFE Standard Plan, compared with about $2,530 under the previous ERS cap of $319,500. That works out to roughly $770 more each month.
For 2026, the FRS is at $440,800 and this translates into a monthly payout of $3,440 a month.
Source: MOF
The above estimated payouts assume a male member who sets aside the ERS at age 55 and starts receiving payouts under the CPF LIFE Standard Plan at age 65.
#6 We Can Top Up To The ERS In Two Ways
We can top up to the Enhanced Retirement Sum (ERS) once our Retirement Account (RA) is formed at age 55, and continue making incremental top-ups over time as the ERS is adjusted each year upwards.
There are two main ways to increase our RA savings up to the ERS — making a cash top-up or transferring savings from our CPF Ordinary Account (OA).
If we choose to make a cash top-up under the Retirement Sum Topping-Up (RSTU) scheme, we can enjoy tax relief of up to $16,000 per year — $8,000 for topping up our own RA and an additional $8,000 for topping up our loved ones’ RA or Special Account (for those below 55), subject to meeting the Full Retirement Sum (FRS).
Alternatively, we can transfer savings from our OA to our RA to reach the ERS. While CPF transfers do not qualify for tax relief, they allow us to move funds from the lower-interest OA to the higher-interest RA, which earns at least 4.0% per annum.
This becomes particularly relevant from 2025, when the Special Account (SA) for members aged 55 and above will be closed. Any SA savings are first used to top up the RA to the FRS, with remaining balances transferred to the OA. Members who wish to build up their RA beyond the FRS — up to the ERS — will need to rely on cash top-ups or OA transfers.
Read Also: Pros And Cons Of Making RSTU Top-Ups To Your CPF Account At The Start Of The Year
#7 Topping Up RA To ERS Is An Irreversible Move
Any cash top-ups or CPF transfers that we make to our RA up to the ERS are irreversible. As the monies would be reserved to boost our monthly payouts during retirement, we will not be able to withdraw them for other purposes, such as housing or other immediate needs, after age 55.
Therefore, we should be certain of our retirement needs before we top up our RA to the ERS.
#8 Whether We Are On The RSS Or CPF LIFE Affects The Distribution Of Our Savings Upon Death
In a typical scenario, the savings in our CPF accounts would be distributed upon our deaths to our nominees in the proportion stated in our CPF nomination. However, if no nominations are made, the CPF savings would be transferred to the Public Trustee’s Office for distribution to our family members under the Intestate Succession Act or the Inheritance Certificate (for Muslims).
If we are on the RSS, our beneficiaries would receive the remaining savings, including interest (if any), when we pass on.
However, if we are in CPF LIFE, our beneficiaries would receive our CPF LIFE premium balance minus any total payouts received, along with our other remaining CPF savings. Unlike the RSS, the interest earned on CPF LIFE would be pooled and used to ensure that other CPF LIFE members receive monthly payouts for their lifetimes.
Read Also: CPF LIFE VS Retirement Sum Scheme (RSS): What’s The Difference?
