Hack #2 Topping up to Enhanced Retirement Sum (ERS)
If you are age 55 and above, and wish to receive higher CPF LIFE payouts, you can top up your RA to the prevailing ERS each year with either CPF savings or cash.
Let’s look at the 2 options – CPF LIFE and RSS.
Assuming you are 55 in 2021 and have the ERS amount of $279,000 in your RA, you will receive a monthly CPF LIFE payout of $2,080 to $2,230 under the CPF LIFE Standard Plan, when you turn 65. You can continue to top up to the prevailing ERS in subsequent years to get higher monthly payouts later.
When calculating how much you can top up to your RA each year, ignore the interest component. For example, if you already have the ERS of $271,500 (excluding interest) in your RA in 2020, you can top up another $7,500 into your RA in 2021 to hit the prevailing ERS of $279,000.
