7 July 2023
SOURCE: CPF Board
Your CPF plays a crucial role in your future, through building your retirement savings and taking care of your basic housing and healthcare needs. Your CPF savings has steadily grown since you started working, and once you turn 55, there are a few decisions you’ll have to make.
From age 55:
- Your Retirement Account (RA) will be created for you when you turn 55. Your CPF savings from your Special Account (SA) and Ordinary Account (OA) will be transferred to your RA, up to your Full Retirement Sum (FRS). Your Special Account (SA) savings will be transferred first, followed by your Ordinary Account (OA) savings.
- For higher payouts in retirement, you can top up your RA to the Enhanced Retirement Sum (ERS).
From age 65 (for those who are on CPF LIFE):
- You will be eligible to start receiving your monthly CPF payouts.
- There will be a second transfer at the start of payouts – savings in your OA and SA will be transferred to your RA for the second time. This will increase the amount of savings in your RA and provide you with higher payouts.
- You have the option of starting payouts anytime from 65 to 70 years old. Once you turn 70, you will automatically start receiving your payouts.
- If you are automatically included in CPF LIFE (if you’re born in 1958 or after, and have at least $60,000 in your retirement savings when you start monthly payouts), you can choose your CPF LIFE plan when you wish to start receiving your payouts. Otherwise, you can choose your CPF LIFE plan when you join the scheme, anytime from age 65 to one month before you turn 80.
What happens if you're not on CPF LIFE?
You’ll receive monthly payouts which will stop once your savings run out. Find out what you need to know if you’re not on CPF LIFE.
With these important milestones, many questions and misconceptions often arise. In this article, we aim to shed light on 4 common questions about CPF to help you make informed financial decisions.
Can you withdraw your savings at age 55?
For those born in 1958 or after, you can also withdraw up to $5,000 unconditionally from age 55. Once you have set aside your FRS, you can also withdraw any remaining OA and SA savings. Property owners in Singapore with a remaining lease that lasts you up to at least age 95 can also withdraw their Retirement Account (RA) savings above their Basic Retirement Sum (BRS).
If you pledge your property, you can withdraw your CPF savings above your BRS. However when you decide to sell your property, you must refund proceeds to your CPF and restore your RA up to the FRS.
What if you don’t have enough to meet the...
BRS: You can still withdraw up to $5,000 from your OA and SA. You will receive monthly payouts based on your retirement savings from age 65.
FRS: You can still withdraw a portion of your CPF savings. If you are aged 65 and above, you can withdraw an additional amount from your RA. Check the “Withdraw for immediate retirement needs” in the Retirement dashboard to see how much you can withdraw from your RA.
TIP
Do you know that once you have met your FRS, you can also withdraw your CPF savings as often as you like from age 55?This gives you the flexibility to access your money in the event of emergencies.
Your CPF is the foundation for your desired retirement lifestyle. Therefore, whenever you start planning, it’s always important to plan to meet your current needs as well as your future goals with CPF in mind. A good guide would be to make withdrawals in smaller amounts instead of taking everything out in one go. This allows you to meet your immediate cash needs while continue growing your CPF savings at an interest rate of up to 6%*per annum.
If you make a top-up to your Retirement Account (RA), you can enjoy higher monthly payouts from age 65!
*Based on the floor rate of 4%. The SMA (Special Account and MediSave Account) rate for Q3 2023 is 4.01%. This also includes extra interest. For members aged 55 and above, the Government pays an extra 2% interest on the first $30,000 of their combined balances (capped at $20,000 for OA), and an extra 1% on the next $30,000.
Can you use your CPF to pay for your home after you turn 55?
You can continue to use the following from your CPF savings to pay your housing loan. This would come from:
- Your new CPF contributions to your OA (if you continue working after age 55)
- You can apply to reserve an amount in your OA savings before your 55th birthday. If you have done so, the reserved amount will not be transferred to your RA when you turn 55. However, do note when you start your monthly payouts, your reserved OA savings will be transferred to your RA if you have not set aside your FRS.
Find out how to apply to reserve your OA savings.
What if you don't have the Basic Healthcare Sum (BHS) at age 65?
The BHS is the estimated savings you will need for basic subsidised healthcare expenses in old age. It is also the maximum amount you can have in your MediSave Account (MA). If you have less than the BHS at age 65, you are not required to top up your MA.
However,if you still want to build up your healthcare savings, you can top up your MA using cash.
Do note that any contributions beyond the BHS will be transferred to your SA or RA. If you have the Full Retirement Sum in your SA or RA, the excess savings will be transferred to your OA.
The BHS is adjusted annually to keep pace with growth in MediSave use by the elderly, ensuring the amount stays relevant for every cohort as they arrive at retirement age. Once you reach age 65, the BHS will be fixed for the rest of your life.
Find out more about the Basic Healthcare Sum.
Will your CPF savings go to your family members' CPF accounts when you pass on?
Your CPF savings will be distributed to your nominees in cash. Therefore, it is vital that you make a CPF nomination so that your money can be properly distributed to your loved ones upon your demise.
Do note that your CPF savings are not covered by your will. Hence, if you did not make a CPF nomination, your CPF savings will be paid to the Public Trustee’s Office for distribution to your family member(s) based on the intestacy laws or inheritance certificate (for Muslims) in Singapore. Your loved ones will need to make an online application with the Public Trustee’s Office for your CPF savings to be distributed to them – which will take a period of time and incur a transaction fee.
Find out more about a CPF nomination, including how to make one.
Facts about CPF nomination
- Investments and returns made under the CPF Investment Scheme are not covered under a CPF nomination.
- If your nominee is below 18 years at the time of your passing, the money will be held-in-trust by the Public Trustee’s Office until they turn 18.
- Any existing CPF nomination will be automatically revoked upon marriage. However, a divorce does not revoke a CPF nomination.
Now that we’ve provided clarity about these common questions about CPF, you’re on your way to making more informed decisions regarding your CPF for a financially sound future!
Information accurate as of date of publication.
