CPF Retirement Savings Money | CPF Retirement Sum Singapore

Budgeting

Every month, a major portion of your wage is deposited into your CPF accounts. However, as a paid employee, your CPF contributions are likely to be a significant portion of your retirement income. In this blog, we tell you all about CPF Retirement Savings Money. 

What is the CPF Retirement Savings Money?

When you reach the age of 55, a Retirement Account is automatically established for you. Money from your Special and Ordinary Accounts will be moved to your Retirement Account. How much is it? Up to the Full Retirement Sum in 2022, which is $192,000. Do you still have money in your CPF OA and SA? You can continue to contribute until you reach the Enhanced Retirement Sum of $288,000 in 2022.

Here’s the exciting part: if you own a property, you can withdraw cold hard cash from your CPF Retirement Account when you reach the age of 65. How much is it? You can withdraw any amount as long as you leave the Basic Retirement Sum ($96,000 in 2022) in your Retirement Account. Keep in mind that this money is not to be accessed until you are ready to receive your retirement payouts at age 65, or later if you like, which is why it was formerly referred to as the “minimum sum.” The money in this Retirement Account will now equal your Retirement Sum. To find out how much of your Retirement Sum you’ve already saved, add up your OA and SA money.

What is the amount of the CPF Retirement Sum?

There are three types of retirement sums:

Basic Retirement Amount (BRS)
Total Retirement Amount (BRS x 2)
Increased Retirement Sum (BRS x 3)
It’s also worth noting that all three Retirement Sums increase by roughly 3% per year to keep up with inflation.

How to calculate the Retirement Amount or CPF Retirement Savings Money?

Beyond 2022, the CPF does not publish Retirement Sums. To calculate your own Retirement Sums, first determine how many years it will take you to reach the age of 55, then use a compound interest calculator. For example, if you are 35 years old this year, you will be 55 in 20 years. Enter $96,000 as the “starting investment,” 20 years as the “period of time,” and 3% as the “interest rate.”

At the age of 55, how much can you withdraw from CPF?

If you own a house in Singapore with a lease that would last you until the age of 95, you can withdraw your CPF savings in excess of the Basic Retirement Sum. You must “pledge” your property to CPF in order for CPF to include the value of your property in your total savings. If you sell your house in the future, you must refund the selling proceeds to your CPF account, up to the Full Retirement Sum. The withdrawal amount does not include the following items (which will remain in your account and be used for retirement payouts):

• Earned interest
• Any government grants you may have received
• Contributions made under the Retirement Sum Topping-Up Scheme

Is CPF LIFE synonymous with the Retirement Sum Scheme?

The principal retirement income scheme for all CPF participants is CPF LIFE. It is intended to replace the previous Retirement Sum Scheme, which is being phased down. Both provide monthly payments in retirement. However, the traditional Retirement Sum Scheme only pays out monthly payments until the age of 90, whereas CPF LIFE pays out for life. Given that one in every three Singaporeans lives above the age of 90, the Retirement Sum Scheme is far less appealing than CPF LIFE.

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