Monday, 10 April 2017

CPF withdrawals from age 55: Something to plan for when you're 54

By Lorna Tan, Invest Editor/Senior Correspondent, The Sunday Times, 9 Apr 2017

CPF members who turn 54 this year are eligible for a new CPF Retirement Planning Service (CRPS) offered by the CPF Board.

These one-on-one sessions aim to help members understand the CPF schemes and plan ahead for the options available to them when they turn 55.

The new service is part of the CPF Board's continuing efforts to help Singaporeans better understand their options, particularly with the various CPF enhancements introduced in the last few years.

Details of the new service can be found in a brochure to be mailed to members when they turn 54.

This initiative is going into full swing after a successful pilot exercise last year. That was when the CPF Board invited 1,200 members to test out the service - and 95 per cent said they would recommend it to their friends.

Out of the cohort of about 60,000 members turning 54 this year, an estimated 20,000 who are servicing their housing loan balances will receive invitation letters to attend the CRPS. This means that if you are 54 and not one of the 20,000 members, you would have to make an appointment with the CPF Board for the new CRPS.

Mr Wong Yan Jun, group director of customer relations at the CPF Board, said: "Through the CPF Retirement Planning Service, we walk CPF members through the CPF policies that affect them and options they have at age 55 so they can better prepare for retirement.

"We are heartened that the service has been well received by members, who appreciate our efforts to help them make informed decisions using personalised information in a one-on-one setting."

Many CPF members are overwhelmed by the various CPF schemes and options, and find them difficult to understand. A recent talk at the National Library on CPF by The Sunday Times Invest drew 1,500 viewers via live streaming, in addition to the 250 who managed to get seats at the event.

Here are some things you should know about CPF as you turn 54.

What to expect at a CRPS session

The new CRPS arises out of a recognition that Singaporeans prefer a personalised session before making a financial decision. During the one-on-one session, which typically takes an hour, a CPF officer would help the member better understand the various CPF options and decide on which option best suits his individual needs and circumstances.

Besides English, CRPS is available in the other main languages here. Both the session and the infographics contained in a customised brochure for each CRPS attendee will be prepared in the language that the member is most comfortable in.

With the help of the customised brochure, the member will have a better understanding on how much he has in his accounts and how much he can withdraw.

One of his options at 55 is to consider the retirement sums he needs to set aside in his Retirement Account (RA) so as to achieve his desired amount of monthly payouts that will commence when he turns 65.

Another consideration is topping up his and his loved ones' accounts so as to build up retirement savings and hence enjoy higher monthly payouts later.

A top concern for a member at age 55 is the future payments that he will be making from his Ordinary Account (OA) savings, since some or all of it may be transferred to the RA.

The CPF Board said it has taken great care in designing the CRPS invitation letters and the infographics incorporating design thinking strategies. For instance, instead of the usual textual contents, side-by-side bar charts were utilised to visually illustrate the changes to members' CPF accounts before and after they turn 55.

Colours have been used to differentiate the OA, Special Account (SA), Medisave Account (MA) and RA. Coloured boxes are also used in the letters to help members focus on the key messages and actions they are required to take.

The board says it has received positive feedback on the simple and clear visuals from members who have attended the CRPS.

Setting aside your Retirement Sum

On your 55th birthday, an RA is created for you. This is where savings from your SA and OA, up to the prevailing Full Retirement Sum of $166,000, will be transferred to your RA to form your retirement sum which will provide you with monthly payouts.

For higher monthly payouts, you may top up your RA up to the Enhanced Retirement Sum, which is a new option made available last year as part of enhancements to the CPF system.

Your Medisave savings will remain in your MA to pay for future healthcare expenses.

Your retirement sum will provide you with a monthly payout from your payout eligibility age, which is currently age 65 for members who were born in 1954 or later.

If you have $60,000 or more in your RA when you are near your payout eligibility age, you will be automatically placed under the national annuity CPF Life scheme, which provides you with monthly payouts for as long as you live.

You can choose your desired amount of monthly payouts to meet your retirement needs. The payouts you will receive depend on the retirement sum you set aside in your RA. The more you set aside, the higher your payouts.

How much can I withdraw from my CPF at age 55? The amount you can withdraw at age 55 depends on how much you have in your OA and SA.

Expect to receive a letter from the CPF Board six months before your 55th birthday. You can apply to withdraw your CPF savings once you receive the letter and payment will be made to you within a week from your 55th birthday.

Here are four scenarios:


Mr Raju's OA savings at age 55 amount to $100,000 while his SA savings are $180,000, which is a total of $280,000.

The Full Retirement Sum of $166,000 will be set aside in his RA, which will provide him with a monthly payout of $1,380 from age 65 for life.

He can withdraw the remaining amount of $114,000 in his OA and SA. If he owns a property with sufficient property charge/pledge, he can also choose to set aside his Basic Retirement Sum of $83,000 in his RA and receive a correspondingly lower monthly payout of $750 from age 65 for life. In this case, he can withdraw $114,000 from his OA and SA, and an additional $83,000 from his RA.


At 55, Mr Ahmad has $45,000 in his OA and $55,000 in his SA, or a total of $100,000.

From this, $95,000 will be set aside in his RA to form his retirement sum which will provide him with $840 monthly from age 65 for life. He can withdraw the remaining amount of $5,000 in his OA.

If he owns a property with sufficient property charge/pledge, he can choose to set aside his Basic Retirement Sum of $83,000 in his RA and receive a correspondingly lower monthly payout of $750 from age 65 for life. In this case, he can withdraw $5,000 from his OA, and an additional $12,000 from his RA.


Mr Lim's OA savings are $25,000 while his SA savings are $35,000 - a total sum of $60,000.

An amount of $55,000 will be set aside in his RA to form his retirement sum which will provide him with $530 a month from age 65 for life.

He can withdraw the remaining amount of $5,000 in his OA.


Mr Robert's OA savings at 55 are $3,000 while his SA savings amount to $1,000. As Mr Robert has less than $5,000, he can withdraw all the balances amounting to $4,000.

How to apply for withdrawal

There are two options. For the online application, apply at You will need your SingPass and a bank account with OCBC, POSB or United Overseas Bank.

Alternatively, download the relevant form from the CPF website and mail it to the board.

The online application process is about five days. It will take about 10 days if you mail in the form.

What if I don't withdraw my savings?

It is not compulsory to withdraw your CPF savings once you turn 55.

In fact, more members now prefer to leave their CPF money in their CPF accounts so that they can continue to earn the attractive interest and grow their nest egg. With the recent CPF enhancements, after you turn 55, your CPF accounts can earn up to 6 per cent interest per year (the first $30,000 earns 6 per cent), certainly not something we can sniff at.

For a member with $30,000 in his RA at age 55, the additional 1 percentage point in extra interest amounts to about a 15 per cent increase in his monthly payout, or about $40 more each month, for the rest of his life.

It helps to understand that you can still make a withdrawal later. So if you do not need the money, you need not withdraw your CPF savings at 55 years of age.

There is no limit to the number of times you can withdraw in a year for those who are eligible to do so. So you can still make a withdrawal at a later date, or withdraw only part of your savings.

CPF Life and Medisave
By Lorna Tan, Invest Editor/Senior Correspondent, The Sunday Times, 9 Apr 2017

The Sunday Times outlines the CPF Life scheme and the Medisave Account.


CPF Life is a national annuity scheme that provides monthly payouts for as long as you live. This gives you greater peace of mind in retirement as you do not have to worry about outliving your savings. This is especially important as Singaporeans are living longer.

About half of Singaporeans who are 65 today are expected to live beyond the age of 85 and a third of them will live beyond 90. Having an income that will last you for as long as you live is more vital than ever.

You will be placed on CPF Life if you are a Singapore citizen or permanent resident born in 1958 or after, and have $60,000 or more in your Retirement Account (RA) when you turn 65.

If you are not placed on CPF Life, you can apply to join the scheme any time from age 65 to before you turn 80. Alternatively, you can remain on the Retirement Sum Scheme (formerly known as the Minimum Sum Scheme), where you will receive a monthly payout until your RA balance runs out.

The CPF Board will write to you again nearer to your 65th birthday to explain the decisions you need to make.

While you do not need to make any decision or take any action now, it is good to understand what CPF Life plans are available. There are three plans under CPF Life, known as Standard, Basic and Escalating plans.

Each CPF Life plan provides a different combination of trade-offs between the amount of monthly payouts you will receive and the bequest you will leave for your beneficiaries.


Your Medisave contributions will go into your Medisave Account (MA) until the balance reaches the Basic Healthcare Sum (BHS) for that year.

Amounts above this sum will be transferred to your RA or Ordinary Account (OA) to boost your monthly payouts in retirement.

The BHS is the estimated savings you need for your basic subsidised healthcare needs in old age. It will be adjusted annually, in January, to keep pace with the growth in Medisave use by the elderly. The BHS for this year is $52,000.

Once you reach age 65, your BHS will be fixed at that year's BHS for the rest of your life.


If you have not met your BHS, you may apply to transfer the savings in your Special Account (SA) and/or OA to your MA, up to your BHS.

To do so, you have to be aged 55 and above and have the Full Retirement Sum or Basic Retirement Sum with sufficient property charge/ pledge in your RA.

You may also apply to transfer the savings in your SA and/or OA to the MA of your loved ones aged 55 and above, up to their BHS. Loved ones refer to spouses, siblings, parents, parents-in-law, grandparents and grandparents-in-law.

The savings which you transfer to your loved ones' MA can be used to pay for their own and their immediate family members' medical expenses, as well as the premiums of approved medical insurance schemes such as MediShield Life.

Using CPF to pay for housing and insurance after age 55
By Lorna Tan, Invest Editor/Senior Correspondent, The Sunday Times, 9 Apr 2017

Central Provident Fund (CPF) members can continue to use the remaining savings in their Ordinary Account (OA), including future working contributions, to pay for their outstanding housing loans.


It is prudent to consider if you need to apply to reserve some OA savings for this purpose, before the savings are transferred to your Retirement Account (RA).

However, this means that you will be setting aside a lower retirement sum. As a result, your monthly payouts will also be lower.

Note that the employer and employee CPF contributions to the OA will be lower, and this may affect how you manage your housing loan payments. So, if possible, try to pay off your housing loan by the time you turn 55.

You can also use your RA savings (excluding top-up monies, interest earned, and any government grants received) above your Basic Retirement Sum for your housing needs.


CPF savings are important not just for your housing needs, but also your retirement needs.

To ensure you have enough savings for your retirement, when you sell or transfer your property, the amount you have withdrawn from your CPF account to pay for the property, as well as the accrued interest you would have earned on the sum, will have to be refunded to your CPF account.

If you had also withdrawn from your RA by pledging your property, you need to refund the pledged amount too. The amount refunded will then be used to restore your RA up to your Full Retirement Sum, so that you can get higher monthly payouts in retirement. The balance of the housing refunds will then be paid to you.

If you own an HDB flat, you can generate income from it for your retirement needs by taking one of these three options:

• Move to a smaller flat or short-lease a two-room Flexi flat and sign up for the Silver Housing Bonus to get a cash bonus when you top up your RA.

• Sign up for the Lease Buyback Scheme and top up your RA to get a cash bonus.

• Rent out your flat or room(s).


You can continue to use your OA savings for insurance premiums under the Home Protection Scheme and the Dependants' Protection Scheme, after setting aside your retirement sum at age 55.

However, if you do not have enough savings in your OA, it would be advisable to ensure that you have alternative funding, such as relying on cash payments instead of your CPF savings. This is to avoid the undesirable situation where your insurance plans lapse, because there are insufficient CPF savings for premium deductions.

Where to get CPF information
By Lorna Tan, Invest Editor/Senior Correspondent, The Sunday Times, 9 Apr 2017

The CPF Board has been stepping up its efforts to help Singaporeans better understand the options they have.

Here are some of the ways that CPF members can ensure they are well informed and actively plan for their retirement.


Last year, the YSOA was enhanced by introducing an illustrated summary. CPF members would have received their YSOA over January and February, and the accompanying illustrated summary which is meant to help members better understand their CPF savings.

Features include a snapshot of the various contributions to their CPF savings in the year, as well as how they have used their CPF savings for important needs, such as housing, healthcare and retirement. Targeted financial tips on how they can grow their CPF savings are also included.

But there is still room for improvement as some CPF members have been confused when they did not see the amounts that had been deducted from their Retirement Account (RA) as premium deductions for the CPF Life scheme.


These members can learn about their options by visiting the CPF website and the various social media channels. Members are also encouraged to drop by the CPF Mobile Service Centres (SCs) introduced last year. The Mobile SCs help reach out to heartland members.

At the centres, members can make inquiries and perform a range of CPF-related transactions, such as apply for CPF Life, make changes to their housing repayment and top-ups to their CPF accounts.

Members can even opt to have their CRPS session at Mobile SCs. Look out for the Mobile SCs at Bukit Merah Community Centre from now until April 28, and at Anchorvale Community Centre from May 2 to June 30.


This year, the CPF Board rolled out a new "Call Authentication" service which allows members to receive personal information using SingPass 2-Factor Authentication (2FA) over the phone securely. This means the customer service executive will be able to provide personalised guidance to the member based on his confidential information.

This provides greater convenience to members, as well as reduces the need for them to visit the CPF Service Centres or write in to the board.


The former CPF Service Centre in Robinson Road was relocated to The URA Centre on Feb 20. The design of the new centre incorporates elements, such as the use of colours to differentiate counters for different services.

You will also find pod-like sitting counters and panels between standing counters to provide privacy for members while they are being served. The SMS system is deployed so that you can run personal errands before your number is called.

The Jurong Service Centre was upgraded last year and there will be progressive upgrading of all CPF Service Centres over the next few years.


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