What Happens To My CPF When I Turn 55?


The CPF system's primary purpose is to provide for our retirement needs. CPF LIFE, a nationwide lifetime annuity scheme, is the retirement solution for those residing in Singapore.

Our monthly lifetime payouts with CPF LIFE begin when we reach our payout eligibility age (PEA), which is currently set at 65 years old. The amount we benefit from CPF LIFE per month is primarily determined by the amount we put into our Retirement Account (RA) when we reach 55.

PHOTO SOURCE: The Independent News & Media

Here are some important retirement-related things we should take note of after turning 55:

1. Your Retirement Account (RA) is Opened

When you turn 55, CPF opens a fourth account for us - the Retirement Account (RA). Simultaneously, funds from our Ordinary Account (OA) and our Special Account (SA) are combined and transferred into the Retirement Account.

The funds in your RA are then set aside, and compounded for the next 10 years to contribute to your CPF Life Scheme for payouts starting at age 65.

2. Choosing Your Retirement Sum

When we reach the age of 55, we must still decide how much of our retirement funds we want to retain. There are three types of retirement sums: the Full Retirement Sum (FRS), the Basic Retirement Sum (BRS), and the Enhanced Retirement Sum (ERS). These sums entail the minimum amount you'll need to keep in your CPF at 55.

Source: D&S

The standard plan is the Full Retirement Amount (FRS). We must have ample property charge and/or pledge our property if we choose the Basic Retirement Sum (BRS). The Enhanced Retirement Sum (ERS) is a maximum limit on the amount we can add to our Retirement Account after we turn 55, rather than a third alternative. Which plan we choose determines how much payout you'll receive from CPF Life when you turn 65.

3. You Can Withdraw Cash from CPF at 55

As previously mentioned, we have three retirement sums to choose from in our Retirement Account at the age of 55, and we can withdraw anything beyond that. Even if we are unable to reach the retirement amounts, we can still withdraw up to $5,000 regardless of how much our CPF balances are.

At the age of 55, we still withdraw anything above the Full Retirement Amount. Furthermore, we can withdraw anything above the Basic Retirement Amount if we have pledged our property.

Of course, we may choose to leave all our funds in our CPF accounts to grow for greater CPF Life payouts at 65.

4. You Start Receiving an Additional Interest of 1% on your first S$30,000

At 55, we start receiving an extra additional interest of 1% on the first S$30,000 of our combined CPF balances. The return is paid to our Retirement Account to help it grow faster.

This extra 1% is on top of the additional 1% interest we receive for the first S$60,000 in our accounts.

Apex EP is an authorised group of Financial Adviser representatives from Professional Investment Advisory Services Pte Ltd.