Singapore’s CPF scheme has introduced major updates for 2025, including a higher monthly salary ceiling, increased senior worker contribution rates, and the closure of the Special Account (SA) for members aged 55 and above. The CPF monthly salary ceiling has risen from $6,800 to $7,400 in January 2025, with a further increase slated for 2026. This means that a larger portion of your monthly salary will now be subject to CPF contributions, which can lead to higher retirement savings but slightly lower immediate take-home pay for those earning above the previous ceiling.
Starting January 2025, the CPF contribution rates for workers aged 55 to 65 increased by 1.5 percentage points to enhance retirement adequacy. In January 2025, the CPF will close the Special Account (SA) for members aged 55 and above. Funds from the SA will be transferred to the Retirement Account (RA) up to the Full Retirement Sum (FRS), with any remaining amount going to the Ordinary Account (OA).
The Enhanced Retirement Sum (ERS) was increased in 2025 to encourage more retirement savings. Members turning 55 can top up their RA to this amount for higher CPF LIFE monthly payouts. The MRSS, which currently supports individuals with lower retirement savings, will expand in 2026 to include Singaporeans with disabilities of all ages.
CPF matches cash top-ups to the RA dollar-for-dollar, encouraging family members to help boost savings for their loved ones.
Cpf ceiling update and contribution changes
If your monthly salary exceeds the CPF ceiling, more will now be subject to CPF deductions.
This means slightly lower take-home pay but increased retirement savings. Your SA will be closed, and the funds will be allocated to your RA (up to the Full Retirement Sum), with any extra going to your OA. You can still top up your RA after 55 up to the new Enhanced Retirement Sum (ERS).
Currently, Singaporeans aged 55–70 with low CPF balances are eligible for MRSS matching. From 2026, the scheme will expand to include Singaporeans with disabilities of all ages. Employees earning above $6,800/month should prepare for slightly lower take-home pay, viewing this as a long-term retirement investment.
Employers should update payroll systems and HR policies to reflect new contribution rates and ceilings. Voluntary top-ups to elderly parents’ CPF accounts should be considered, especially now with higher ERS and MRSS matching. These updates aim to enhance retirement adequacy, inclusivity, and financial security for all Singaporeans.
Whether you’re a young professional starting your career or a senior worker nearing retirement, these changes offer more ways to grow your savings and plan for the future.
Image Credits: Photo by Mike Enerio on Unsplash
