There are a few key milestones that all CPF members go through in their financial planning journey around CPF. The first milestone would be using CPF for housing, and the next milestone would be retirement.

While most people generally prioritise housing decisions, retirement decisions deserve just as much attention and consideration, if not more.

There are major decisions to be made the closer you get to retirement, with opportunities to utilise favourable CPF policies to manage your wealth better. This would require an understanding of what happens during Retirement Account (RA) formation, how CPF contribution rates change, and withdrawals after 55.

How CPF RA is formed at age 55

When you turn 55, an RA is created to set aside savings for retirement. Savings from your CPF Special Account (SA) are first transferred to the RA, followed by OA up until the Full Retirement Sum (FRS). Your SA will subsequently be closed.

The Retirement Sums are set by the CPF Board. If you turn 55 in 2025, the Basic Retirement Sum (BRS) is S$106,500, the Full Retirement Sum (FRS) is S$213,000, and the Enhanced Retirement Sum (ERS) is S$426,000.

This directly affects your planning for a potential CPF withdrawal. If you have met the FRS, you are allowed to withdraw any excess OA savings. Therefore, if you are 55 this year, and your RA savings are S$250,000, you could withdraw up to S$37,000.

The RA savings will be used to purchase CPF LIFE, an annuity scheme which provides monthly payouts from age 65 (or you may choose to delay till age 70). Members can voluntarily top up their RA to up to the ERS for higher payouts.

Is it only S$5,000 that I can withdraw from CPF?

At age 55, you can withdraw a portion of your CPF savings, but the amount depends on whether you meet the FRS requirement. CPF ensures that a portion of your savings is set aside in your RA to fund CPF LIFE.

Otherwise, you are allowed to withdraw up to S$5,000 from your OA if you were born in 1958 or after. Refer to this CPF page for withdrawal amounts if you were born before 1958. 

It is important to note that Mediave Account (MA) balances cannot be withdrawn even at 55, as they are reserved for healthcare needs.

If you choose not to withdraw your CPF savings immediately, they will continue to earn interest, which can help grow your retirement funds over time. Some members may choose to leave their funds in their CPF to earn risk-free interest rates and defer withdrawals until later stages of retirement.

Should you withdraw your CPF when you're 55?

While you can withdraw your CPF when you turn 55, here are a few considerations to take note of beforehand:

Do you need liquid cash?

While leaving your CPF funds in your account will allow them to continue to earn risk-free interest, the liquid cash can be for your emergency fund, or potentially be invested in other investment instruments that are more suited for your goals and risk tolerance.

Do you have mortgage payments or other liabilities using your OA?

Your OA can be used to pay for a variety of things in Singapore, such as the Home Protection Scheme or the Dependants’ Protection Scheme (DPS), which are aimed at protecting and ensuring your assets in the event of death or critical illness. You should ensure you have enough in your OA to pay for the premiums and mortgage payments, if any.

Will your RA savings qualify you for a CPF LIFE payout that meets your lifestyle needs after turning 65?

Withdrawal of CPF funds would lose out on the risk-free interest that could accrue over the course of the next 10-15 years, depending on what age you choose to activate CPF LIFE at. Choosing to leave your CPF funds as they are may allow them the opportunity to grow and qualify for a higher CPF LIFE payout down the line. 

Do you prefer to take risks with your CPF savings?

Your CPF savings can be withdrawn and re-invested in higher-risk investment options. While you don’t enjoy the risk-free CPF interest rates, your savings can potentially beat these rates if given a long time to grow. Some people with enough in their RA may wish to invest the excess for future generations.

Should you continue to top-up your CPF after the first withdrawal?

Take the example of someone with a monthly gross salary of S$5,500 (without bonus), nearing the age of 55. When he reaches 55 years old, his mandatory CPF contribution from both employer and employee decreases from 37% to 31%.

We assume that he has already reached the FRS, and he will be free to withdraw contributions made to his OA. 

If he is risk-averse or prioritises capital preservation over growth, he may wish to make voluntary contributions to his CPF to benefit from risk-free interests and top up his RA up to the ERS for larger monthly payouts in the future. 

If he prefers to take more risks and determines that he has a sufficiently long time horizon, he may choose to invest his OA, or withdraw it and invest beyond the restricted list of CPFIS-approved investment products.

Note that there is also the CPF Annual Limit, which is the maximum amount of mandatory and voluntary contributions one can make to CPF, currently at S$37,740. Not forgetting MA, contributions beyond the Basic Healthcare Sum (BHS) will be directed to OA. 

These points notwithstanding, withdrawing your CPF past 55 should be decided based on your goals and personal circumstances. The unpredictability of life may require cash on hand, and withdrawing your CPF could make sense during difficult times.

How to set your CPF withdrawal limit?

To set your CPF withdrawal limit, you can adjust your Daily Withdrawal Limit (DWL) under Account settings via Singpass authentication.

The default DWL for online withdrawals for members aged 55 and above is S$2,000, but you can customise it anywhere from S$0 to S$50,000. For withdrawals exceeding this limit, you will need to either spread the withdrawal over multiple days or schedule an appointment at a CPF Service Centre.

Can I qualify for an early CPF withdrawal?

In general, you are not allowed to withdraw your CPF savings before the age of 55, as CPF is designed to support your retirement and healthcare needs. However, there are some specific circumstances where early withdrawals are permitted.

1. Medical reasoning: If you have a serious medical condition that renders you permanently unable to work, reduces your life expectancy, or leaves you with a permanent lack of mental capacity (as defined in the Mental Capacity Act), you may withdraw your CPF with certification from an accredited doctor.
2. Giving up your citizenship or PR status: Should you choose to renunciate your Singaporean citizenship or permanent residency status, you may close your CPF account and transfer your CPF savings to your bank account.

While early withdrawals are allowed in specific cases, they can impact your long-term retirement savings.

Take charge of your CPF planning for retirement

Many CPF hacks and workaround solutions involve keeping more money within CPF at retirement. This is to allow it to compound with the higher yielding SA and OA.

Learn how to read CPF statements, or plan for retirement in Singapore with this simple checklist. 

You may use the Endowus CPF Calculator to find out whether you can retire comfortably at your desired retirement age with your desired monthly income.

Being invested makes a big difference to your CPF money. To get started with Endowus, click here.