Turning 55 is a major milestone in Singapore. With retirement on the cusp, CPF does a marvellous job of reminding us by creating a new Retirement Account (RA). When our Retirement Account is opened, money from our Ordinary Account (OA) and Special Account (SA) – up to our Full Retirement Sum (FRS) – will be transferred into it.
For many of us, turning 55 will also be the first time we get to withdraw cash from our CPF accounts. The question is, just how much can we withdraw?
Everyone Can Withdraw At Least $5,000 From Their CPF Once They Turn 55
Regardless of how much we have accumulated in our CPF accounts, we can withdraw at least $5,000 from our CPF OA and SA accounts when we turn 55. If we have less than $5,000 in our CPF accounts, then we will only be able to withdraw whatever we have saved in our CPF accounts.
We are not required to withdraw this money. If we want to leave it in CPF, it will continue compounding at 4.08% per annum in our Retirement Account. We can choose to withdraw a partial amount if we want, or even multiple smaller amounts with no restrictions on the frequency or amounts we want to withdraw.
This is the base case for everyone. If we have more CPF savings, we may also be able to withdraw more than $5,000 from our CPF at age 55, depending on whether we are able to save our retirement sum.
Read Also: What Happens To Your CPF Monies After Transferring It To Your Retirement Account At Age 55?
If We Have Saved More Than The Full Retirement Sum (FRS)
The first thing to bear in mind is that our Full Retirement Sum (FRS) is $205,800 if we turn 55 in 2024. There are two main ways that we can save more than the FRS (for example $205,800) in our CPF accounts. Below are two scenarios for Person A and Person B:
| CPF OA And SA Balances | Mandatory Contributions | Retirement Sum Topping Up (RSTU) Scheme |
| Person A: $250,000 | $250,000 | $0 |
| Person B: $250,000 | $100,000 | $150,000 |
| Person C: $205,800 | $0 | $205,800 |
Person A accumulated $250,000 entirely with mandatory contributions while working. Person B has accumulated only $55,800 through mandatory contributions, and the remaining $150,000 by top-ups via the Retirement Sum Topping Up (RSTU) Scheme.
In this scenario, Person A can withdraw anything above the Full Retirement Sum (FRS) – which is $44,200 ($250,000-$205,800). Person B can also withdraw $44,200 (($100,000+$150,000)-$205,800).
Person C has no mandatory contributions, but managed to accumulate the entire FRS amount via RSTU top-ups. While top-up monies cannot be withdrawn, theoretically, this person can still withdraw $5,000 unconditionally from their CPF.
If We Only Want To Save The Basic Retirement Sum (BRS)
If we only want to save the BRS – by pledging our property – in our Retirement Account, we can withdraw more from our CPF accounts. The Basic Retirement Sum is half of the FRS, or $102,900 in 2024.
Read Also: Accrued Interest VS Property Charge VS Property Pledge: What Are The Differences?
| CPF OA And SA Balances | Mandatory Contributions | Retirement Sum Topping Up (RSTU) Scheme |
| Person D: $220,000 | $220,000 | $0 |
| Person E: $220,000 | $50,000 | $170,000 |
| Person F: $110,000 | $110,000 | $0 |
| Person G: $110,000 | $50,000 | $60,000 |
| Person H: $50,000 | $50,000 | $0 |
Let’s start with the simplest outcome – Person H who only has $50,000 in their OA and SA, will only be able to withdraw $5,000 from their CPF account. This means $45,000 goes into their Retirement Account.
Person F and Person G only have $110,000 in their CPF accounts. Under normal circumstances, they would only be able to withdraw $5,000 from their CPF accounts (because they don’t have the FRS saved).
However, Person F has accumulated $110,000 entirely from their mandatory contributions. If they are able to pledge their property, they will be able to withdraw $7,100 ($110,000-$102,900,000) from their CPF accounts.
While Person G has also accumulated $110,000, only $50,000 came from their mandatory contributions and another $60,000 came from their RSTU contributions. Person G will not be able to withdraw anything above $5,000.
This is because monies topped up via the RSTU are primarily to enhance a person’s retirement adequacy, and which also possibly earned them tax deductions. On the CPF website, it states that while top-up monies form our retirement sum (which is why we can withdraw any above our FRS), it will not be “taken into account in computing how much RA savings can be withdrawn in cash for property owners” (which is why we cannot withdraw top-up monies by saving the BRS).
Person D can withdraw $117,100 ($220,000-$102,900) from their CPF account if they opt to save only the BRS and pledge their property.
Person E, who also has $220,000 will not be able to withdraw anything more than the $14,200 ($220,000-$205,800) above the FRS. This is because only $50,000 of mandatory contribution flowed into their Retirement Account, which is less than the $93,000 BRS. The rest of their Retirement Account balances was contributed from their top-up monies.
Read Also: Why I Don’t Want My CPF Returned At 55 – But I Want My CPF LIFE Payout At 65
Should We Perform RSTU Or Transfer Monies From OA to SA?
Any monies we top up to our CPF via the RSTU build our retirement sum. This way, we can create a bigger retirement nest egg, while having the option to withdraw anything above the FRS once we turn 55.
Reaching the FRS early in our lives is crucial to reducing some stress over our retirement adequacy, and helps us compound the amount by earning at least 4.08% interest on our SA monies. The floor rate for the SA remains at 4.0% regardless of interest rate fluctuations.
However, as we have seen in the examples above, we cannot use RSTU monies to withdraw more from our Retirement Account by opting to save the BRS. This does not apply to monies transferred to our SA from our OA, as it is still considered mandatory contributions into our CPF accounts.
When deciding to make use of the schemes available by CPF, we need to bear these things in mind. However, we also need to acknowledge that we are trying to build a greater retirement nest egg, rather than constantly or only thinking about gaming the system.
Read Also: 12 Little-Known Things About CPF That Most Singaporeans Are Still Unaware About
This article was first published on 2 November 2020 and has been updated to include new information.
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