HOW MUCH MONEY CAN YOU WITHDRAW FROM YOUR CPF AT 55
We have noticed that there seems to be some confusion on the amount of money/cash that one can withdraw from his or her Central Provident Fund (‘CPF’) upon reaching the withdrawal age of 55.
Indeed, withdrawal limits do get more complex when various schemes such as Retirement Sum Top Up (‘RSTU’) and transferring from one’s Ordinary Account (‘OA’) to Special Account (‘SA’) are taken into consideration.
This is understandable as the answers to these questions can sometimes be found over several pages on CPF’s website. It takes considerable effort to piece those information into a consistent and congruent piece. Hoping to clear the confusion so that all CPF members can act with certainty and make more informed decisions, we will attempt to explain the amount of money that you can withdraw from your CPF at 55, especially if you have participated in popular schemes such as RSTU and transfers from OA to SA before you have turned age 55.
UNDERSTAND WHAT HAPPENS AT AGE 55
While most Singaporeans and Singapore Permanent Residents have acquainted themselves well with the various functions of OA, SA and Medisave (‘MA’), they are often very unfamiliar with what would happen to these accounts upon reaching retirement age. Indeed, it is not uncommon to learn that CPF members do not know what would happen to their various CPF accounts upon turning age 55.
For a start, the CPF Retirement Account (‘RA’) only appears upon the CPF member reaching the age of 55. The CPF Board will transfer your savings from your SA and OA to your RA to form your retirement sum. The money continues to reside in your RA and earn interest until they are withdrawn to participate in CPF LIFE when you choose to start your monthly payouts (between age 65 and 70). CPF Lifelong Income For The Elderly (CPF LIFE) is an annuity scheme that dispenses monthly payouts till your death. The monthly payout would depend on the amount of money you have in your RA at the point you join CPF LIFE from age 65 onwards, which is the payout eligibility age for members born in or before 1954.
HOW MUCH CAN YOU WITHDRAW FROM YOUR CPF AT 55?
Upon turning age 55, a CPF member can withdraw cash from his CPF OA and SA. The CPF withdrawal rules are:
$5,000 OR your OA and SA savings above the Full Retirement Sum (FRS)*, whichever is higher
And
Any RA Savings (exclude top up monies, government grants, and interest earned) above the Basic Retirement Sum (BRS) that comes with a sufficient property pledge.
The Full Retirement Sum is double of BRS and the Enhanced Retirement Sum is triple of BRS. These schemes have replaced the previous concept of minimum sum.
SHOULD WE STILL PERFORM RSTU AND OA TO SA TRANSFER?
Transferring from your OA to SA does not affect your withdrawal and the money already in your CPF has merely been transferred from an account that is more flexible (can be used for property and education) to an account that is more restricted in its purpose in search of higher interest rate.
CONCLUSION
The various CPF schemes available eventually seek to provide CPF members with a greater amount of retirement sum. Ultimately, it is important not to lose sight of the big picture. That is because the objective of CPF is to provide lifelong monthly income to meet retirement needs, and less about the amount that you can withdraw at 55.
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