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How Much Can You Withdraw Out of your CPF Account At Age 55?
Turning 55 is a major milestone in Singapore. If we haven't already figured out that retirement is around the cusp, CPF does a marvellous job of reminding us by creating a new Retirement Account (RA) for all of us and transferring our Ordinary Account (OA) and Special Account (SA) balances in it.
For many of us, turning 55 may also be the first time we get to withdraw cash from your CPF accounts. The question is – just how much can we withdraw?
#1 Everyone Can Withdraw A minimum of $5,000 From Their CPF Once They Turn 55
Regardless of methods much we have accumulated within our CPF accounts, we can withdraw at least $5,000 from our CPF OA and SA accounts when we turn 55. Of course, if we have less than $5,000 within our CPF accounts, then we will you need to be able to withdraw whatever we have in our CPF accounts.
We aren't required to withdraw these funds. If we want to leave it in CPF, it will compound at 4% per annum in our Retirement Account. We can withdraw a partial amount if we want, or even multiple smaller amounts with no restrictions on the frequency or amounts you want to withdraw.
This is the base case for everybody. If we have more CPF savings, we may also able to withdraw more than $5,000 from our CPF at age 55, depending on whether we are able to save our retirement sum.
Can We Withdraw A lot more than $5,000 From Our CPF At 55?
#2 If We Have Saved More Than The Full Retirement Sum (FRS)
The first thing to remember is that our Full Retirement Sum (FRS) is $186,000 when we turn 55 in 2021. There are also two main ways that we are able to save more than the FRS (for example $200,000) within our CPF accounts. Below are two scenarios for Person A and Person B:
| CPF OA And SA Balances | Full Retirement Sum (FRS) | Mandatory Contributions | Retirement Sum Topping Up (RSTU) Scheme |
| Person A: $200,000 | $186,000 | $200,000 | $0 |
| Person B: $200,000 | $186,000 | $50,000 | $150,000 |
Person A has accumulated $200,000 entirely with mandatory contributions from working. Meanwhile, Person B, who also has $200,000 accumulated $50,000 through mandatory contributions while the remaining $150,000 was in the Retirement Sum Topping Up (RSTU) Scheme.
Person A can withdraw anything above the Full Retirement Sum (FRS) – that is $14,000 ($200,000-$186,000). Person B, can also withdraw $14,000 ($200,000-$186,000).
#3 If We Only Want To Save The Basic Retirement Sum (BRS)
If we simply want to save the BRS – by pledging our property – within our Retirement Account, we can withdraw more from your CPF accounts.
| CPF OA And SA Balances | Basic Retirement Sum (FRS) | Mandatory Contributions | Retirement Sum Topping Up (RSTU) Scheme |
| Person A: $200,000 | $93,000 | $200,000 | $0 |
| Person B: $200,000 | $93,000 | $50,000 | $150,000 |
| Person C: $100,000 | $93,000 | $100,000 | $0 |
| Person D: $100,000 | $93,000 | $50,000 | $50,000 |
| Person E: $50,000 | $93,000 | $50,000 | $0 |
Let's start with the simplest outcome – Person E who has only $50,000 in their OA and SA, will only be able to withdraw $5,000 using their CPF account. This means $45,000 adopts their Retirement Account.
Person C and Person D has only $100,000 in their CPF accounts. Under normal circumstances, they'd only be able to withdraw $5,000 using their CPF accounts (because they don't have the FRS saved).
Person C has accumulated $100,000 entirely using their mandatory contributions. They will be able to withdraw $7,000 ($100,000-$93,000) from their CPF accounts if they are able to pledge their home.
Person D has also accumulated $100,000, however, only $50,000 came from their mandatory contributions and another $50,000 came from their RSTU contributions. Person D won't be able to withdraw anything above $5,000.
This happens because monies topped up through the RSTU was primarily for the purpose of enhancing a person's retirement adequacy, and which also possibly earned them tax deductions. Around the CPF website, it states that although top-up monies form our retirement sum (and that's why we can withdraw any above our FRS), it will not be “taken into account in computing just 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 A can withdraw $107,000 ($200,000-$93,000) from their CPF account if they opt to save the BRS.
Person B, who also offers $200,000 will not be able to withdraw anything further than the $14,000 above the FRS. Again, it is because only $50,000 of mandatory contribution flowed to their Retirement Account, which is under the $93,000 BRS.
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. By doing this, we can create a bigger retirement amount of money, while having the option to withdraw anything over the FRS once we turn 55.
This means reaching the FRS at the start of our lives is crucial to snowballing the amount by earning at least 4% interest on our SA monies.
However, we can't use the RSTU monies to withdraw more from your Retirement Account by opting in order to save the BRS. This does not apply to monies transferred to our SA from our OA, as it is still considered as mandatory contributions into our CPF.
When deciding to leverage on the schemes available by CPF, we have to bear these things in mind. However, we also need to acknowledge that we are trying to build a greater retirement amount of money, rather than constantly or only thinking about gaming the system.
