As 2025 begins, Singapore has rolled out major changes to its Central Provident Fund (CPF) system. These updates are meant to help workers, especially seniors, save more for retirement and enjoy a better quality of life after leaving the workforce. The government wants to make sure everyone has enough money to live on in their later years, and these CPF updates are a key step in that direction.
The new plan includes increasing the amount of money that workers and employers must contribute to CPF, raising the age at which people retire or are re-employed, and improving the monthly payouts seniors receive after retirement. These adjustments show Singapore’s efforts to meet the needs of an ageing population and rising living costs. People living longer means they need more savings to last through retirement.
Another important focus is the support for freelancers and self-employed individuals. In the past, this group didn’t receive the same CPF benefits as full-time workers. Starting in 2025, they will now get more support and be included in the CPF system with medical and retirement savings options. Let’s break down each of these important changes.
Key Updates to the CPF System This Year
Singapore’s CPF system is made up of different accounts that help people save for specific needs:
- Ordinary Account (OA): For buying homes, paying for education, or making investments.
- Special Account (SA): Focused on long-term retirement savings.
- MediSave Account (MA): Used only for medical bills and healthcare costs.
- Retirement Account (RA): Created at age 55 to pay monthly income during retirement.
These accounts help balance saving for today and the future, making sure Singaporeans are financially secure later in life.
Higher CPF Contributions for Older Workers
Starting 2025 older workers between the ages of 55 and 65 will see their CPF contributions go up by 1.5%. Employees will contribute 1% more, and employers will add 0.5% more. This extra money goes mostly into the Retirement Account.
New Retirement and Re-employment Ages
To reflect that people are living longer, Singapore is increasing both the retirement and re-employment ages. In 2025:
- Retirement Age: Raised from 63 to 65
- Re-employment Age: Increased from 68 to 70
This gives workers more time to earn and save. It also helps businesses keep experienced workers around longer. It’s a move that supports both individuals and companies in an ageing society.
Monthly Payouts from CPF LIFE Will Be Higher
CPF LIFE, the national retirement payout scheme, will start offering bigger monthly payments in 2025. This will help retirees better manage daily expenses and medical needs.
This increase gives retirees more peace of mind with lifelong monthly income.
Rules for Withdrawing CPF Savings
Here’s a quick look at the CPF withdrawal rules:
- Monthly payouts from CPF LIFE begin at age 65 and continue for life.
- You can only take out a lump sum if you meet certain savings conditions.
- Your CPF savings continue to earn 2.5% to 4% annual interest, helping your funds grow over time.
- You must meet the Basic Retirement Sum (BRS) to withdraw more than the default amounts.
These rules help make sure retirees don’t run out of money too soon.
CPF Benefits for Freelancers and Gig Workers
For the first time, self-employed individuals will receive better CPF benefits. This includes freelancers, delivery riders, and others working outside regular full-time jobs.
Here’s what’s new for them:
- They must now contribute to MediSave, helping them cover future healthcare needs.
- The government will provide monthly retirement payouts between SGD 200 to SGD 400.
- The government will also match part of their contributions to encourage saving.
This change makes sure all Singaporeans—no matter what job they have—can look forward to a more stable retirement.