The Singapore government has announced today (February 16) that the Enhanced Retirement Sum will be raised and the CPF contribution rates for those aged 55-65 will increase by 1.5 percentage points from 2025 onwards.
In his speech for Budget 2024, Deputy Prime Minister Lawrence Wong has also announced that the Special Accounts in CPF will be closed for those aged 55 and above starting from 2025 and beyond. All of the funds accumulated will be transferred to the Retirement Sum and account holders can still enjoy the long-term interest rates.
The CPF Transition Offset will also be provided to employers for another year, to cover half of the increase in employer contributions for 2025 and cushion the impact on business costs.
More financial support for seniors
Young seniors to get a boost for retirement with the enhanced Majulah package. This scheme has now been extended to the Pioneer and Merdeka generations, widening the age range to those aged 51 and above.
The package includes three components. The first is an Earn and Save Bonus of S$1,000, which will be offered to seniors who earn up to S$6,000 per month for as long as they work. Larger amounts will be given to those with lower incomes.
On top of that, a one time Retirement Savings bonus of between S$1,000 to S$1,500 will be given to seniors with retirement savings below the basic retirement sum. Seniors who live in a property with an Annual Value of S$25,000 or below will be eligible for both bonuses.
The final component is a one-off Medisave bonus for those aged 51 and above. Young seniors with lesser means will be given a sum of S$1,500, and others will receive S$750.
Another one-off Medisave bonus of up to S$300 will be offered to all adult Singaporeans aged 21-50 years old.
DPM Wong has also announced that the Singapore government will set aside S$7.5 billion for the Majulah Package Fund, stating that the scheme will benefit 1.6 million Singaporeans, and that the amount was derived after taking into account the investment income of the fund.
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