July 25, 2018 thefinlens

5 Important Things You Must Know About Your CPF Retirement Sum

cpf retirement

If you’re reading this article, you either have a rough idea or may still be unsure and confused about what the CPF Retirement Sum is all about, or maybe you’re interested about CPF withdrawal nearing your retirement.

Firstly before we go any further, you need to know that the CPF Retirement Sum was previously known as the CPF Minimum Sum. If you were not aware about this, the scheme was renamed with effect from Jan 2016.

So what exactly is the CPF Retirement Sum and how does it affect you?

What Exactly is the CPF Retirement Sum?

The CPF Retirement Sum is simply an amount of money that is being put aside and saved for your retirement in your CPF at age 55.

When you’re 55, two things will happen: (1) You will be allowed to withdraw some cash depending on how much you have in your CPF and (2) your retirement sum will be formed using the savings from both your CPF Ordinary Account (OA) and Special Account (SA), which will be transferred into a new account called the Retirement Account (RA).

As you may have realised, the money that is in your RA is your retirement sum. As of now, if you’re not yet 55, to know how much retirement sum you’ve approximately saved up, you can simply add your OA and SA together. However once the money is being moved into your RA, you will not be able to touch the sum until you are eligible to receive your retirement payouts at age 65, or later if you wish.

How much can you withdraw from CPF at 55 years old?

The amount you can withdraw depends on the balances in your CPF account. As of now, below is how much you can withdraw:


Cash balances in Ordinary Account (OA) and Special Account (SA) at 55
Amount which you can withdraw at age 55
$5,000 or lessAll your Ordinary and Special Account savings
Between $5,000 and your Full Retirement Sum(i) $5,000,and

(ii) Any Retirement Account savings above the Basic Retirement Sum, if you have sufficient CPF property charge/pledge.

More than your Full Retirement Sum(i) $5,000, or your Ordinary and Special Account savings above your Full Retirement Sum, whichever is higherand

(ii) Any Retirement Account savings above the Basic Retirement Sum, if you have sufficient CPF property charge/pledge.

Find examples on the computation of CPF withdrawal. This is done by the Central Provident Fund Board.

How much is required for the CPF Retirement Sum?

There are 3 choices of retirement sum that you will get to choose from. The choice that you make will determine the amount you will receive in monthly retirement payouts, but that is also depending on whether you are able to meet the required amount.

As for people who are turning 55 in 2018, below is the summary of your retirement sum choices and the payouts amount:

Type of Retirement SumAmountMonthly Payouts
Basic Retirement Sum$85,500$720 – $770
Full Retirement Sum$171,000$1320 – $1410
Enhanced Retirement Sum$256,500$1910 – $2060

For those of you who are turning 55 in 2019, 2020 or much later, your Basic Retirement Sum, Full Retirement Sum and Enhanced Retirement Sum will be higher based of current trends of inflation.

Should you rely on CPF Retirement Sum scheme to retire?

It honestly depends on your current situation and how much you require for your monthly payouts to satisfy your retirement needs. However if you are not willing to live on so little when you’re no longer working, you might have to look at other options.

Fortunately or unfortunately, many retired Singaporeans and Permanent Residents are relying on their CPF Retirement Sum as a source of income.

However many are also financially able to only opt for the Basic Retirement Sum which as of 2018 is at $85,500 because they have also utilized their CPF for their mortgage loan. With this sum, 10 years later at 65, you will only be getting monthly payouts of about $720 – $770. And hopefully by this time, you should have already cleared all your debts.

What if my CPF Retirement Sum runs out?

The most ideal way to approach retirement planning is to prepare so that your income does not actually run out.

What that means is that you can’t just rely on your CPF Retirement Sum, which will only give you monthly payouts, but you will have to rely on Income Generating Assets (IGAs). And fortunately, most Singaporeans and Permanent Residents already have one IGA, which is your CPF Lifelong Income For The Elderly (CPF LIFE).

CPF LIFE is a government scheme, which converts your CPF Retirement Sum into a life annuity scheme that provides you with a monthly payout from age 65 for as long as you live. An annuity is a financial product designed to convert an individual’s savings into a stream of regular payments during an individual’s retirement years.

As with other insurance schemes, CPF LIFE is able to do so via risk pooling. This means that the interest earned on the annuity premium is pooled among the surviving members, ensuring that no CPF LIFE member will run out of retirement payouts in old age. The question is, is it sufficient for you? If you do require more assistance, do not hesitate to contact us and we’ll be more than happy to guide you through your retirement planning!

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