Financial Literacy

Topics: Central Provident Fund, Investment, Withdrawal Pages: 31 (5138 words) Published: February 13, 2013
Reaching 55

It’s almost your 55th birthday*. Now is a good time to look at your retirement finances and ensure you have a good plan when you retire. This booklet will help you understand the role your CPF savings are going to take. It provides information on the Minimum Sum Scheme, the CPF LIFE Scheme and related CPF matters. More importantly, it shows you how to make your CPF work harder for you, as you enter a new phase of your life. Happy 55th Birthday!

Soh Chin Heng
Deputy Chief Executive [Services]

CPF Board


numerical figures used in this booklet apply to members reaching 55 from July to December 2012.



At 55, it’s time to make your next move


02 03 05 07 09 10 13 14 15

Reaching 55 CPF at 55 How much can you withdraw? Continue saving with CPF How to withdraw? CPF LIFE - the trump card for your retirement income Get Your D-Bonus Top up for tax savings and attractive interest CPF from 55 and beyond


Remember three points at 55:


Reaching 55
In the lead-up to your retirement years, CPF should be at the top of your financial agenda. At 55, two important things occur when it comes to your CPF: 1. A Retirement Account (RA) is created to set aside your CPF Minimum Sum. 2. You can withdraw a portion of your CPF savings (termed ‘withdrawable amount’) if you so choose.

On CPF Withdrawal: To do not H i n g is a good thing!

While withdrawal is an option open to you, this is not a decision to rush into. You may find that your CPF savings will work harder for you during your retirement if you choose not to withdraw. After all, you’ve worked hard to accumulate your CPF savings all these years. You want to stretch the value as far as possible. Instead of withdrawing immediately upon turning 55, it may be more beneficial to retain it in your CPF accounts. Let your total CPF savings count towards a proportion of your overall retirement provisions. Rather than withdraw your savings, you may want to consider the opposite. Top up your CPF regularly to ensure that you’ll have more retirement savings in your golden years. Your family members can also top up your CPF to bolster your RA savings. People are living longer these days. It is an increasing concern that present retirement funds may be insufficient to last throughout retirement. On average, men can expect to live till 83, and women till 86, and this trend is increasing. Think about how long you have in retirement. Will you outlive your savings? To overcome this, consider joining CPF LIFE, the national annuity scheme which ensures that you receive a lifelong income.

toP u P your and your loved ones’ retirement savings


CP F Li Fe for a lifelong income



CPF at 55
On your 55th birthday, your RA is created by transferring the savings from your Special Account (SA), Ordinary Account (OA), and then Medisave Account (MA), where applicable, to make up the Minimum Sum (MS) of $139,000. This amount pays you a monthly income from 65 that will support a basic standard of living during retirement. If the savings in your SA, OA and MA are not enough to make up the MS of $139,000, your property bought with CPF savings will automatically be pledged to make up the difference. In this case, the monthly income that you will receive from your RA savings will be proportionately lower. Your RA savings will give you a monthly income for about 20 years from 65 under the Minimum Sum Scheme. If you join CPF LIFE, you will receive a monthly income for life.


Golden Years

CPF at 55

important CPF Figures at 55….

Minimum Withdrawable Amount: $5,000
The minimum amount you are entitled to withdraw from your CPF at 55. (Subject to available balances)

Minimum Sum (MS): $139,000
The Minimum Sum to be set aside in your RA.

Medisave Minimum Sum (MMS): $38,500
The amount in your MA, above which you can withdraw after you have set aside your full MS....
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