When it comes to CPF withdrawal, the CPF Board through its official website has stated that:

Upon turning 55 years old, members can withdraw their CPF savings, after setting aside their Full Retirement Sum or Basic Retirement Sum with sufficient CPF property charge/pledge in their Retirement Account.”

While setting aside the money is understandable, many people still do not understand about property charge/pledge and its relation to CPF.

What does it actually mean?

Property Pledge

As we all know, CPF Ordinary Account (OA) can be used to purchase a property. When you buy, for example, a house using your CPF money from OA, you are automatically pledging the house. It means that when someday you sell it, you will have to give back CPF money you once used to purchase the house into your CPF account. In addition, the interest that has accrued should also be deposited into the CPF.  You don’t lose anything as the money in your CPF account is used to give you monthly payout on retirement days.

How Much from CPF Savings Can Be Used to Purchase a Property?

Basically, you can use all your OA savings to purchase a property. However, there is a Valuation Limit especially if you don’t buy directly from HDB.

What Kind of Property that Can Be Pledged?

Your property should at least have 30 years of remaining lease, and it is not a short-lease 2-room Flexi or Lease Buyback Scheme flat.

Property Charge or Pledge to Meet Minimum Sum

For every Singaporean citizen turning 55, they are required to set aside Full Retirement Sum (FRS) to their Retirement Account. Some people, however, fail to meet the required amount.

To solve the problem, you can actually use property charge/pledge to meet FRS which is $171,000 in 2018. For your better understanding, take a look at this illustration.

cpf full retirement sumLooking at the illustration, you do not have to fully set aside $171,000 from your CPF savings. You can set aside only the Basic Retirement Sum and use your property to cover the rest.


One benefit of pledging your property to obtain FRS is that you can withdraw more money, assuming your property charge is more than FRS. The bigger your property charge is, the bigger the amount you can withdraw.

For example, if you set aside BRS from CPF savings, you need another $85,500 in order to meet $171,000. If your property charge is $120,000, you can withdraw as much as $34,500.

Another benefit is that with bigger withdrawal amount, you can do so much more including investment. As you invest, you will gain much more profit that could help you achieve a more comfortable life.

If you help with property pledge or information about investment, you can contact TheFinlens anytime. We are a financial consulting website who focuses on helping our clients create a tailored financial planning. Leave your detail below or click here so we can have a discussion regarding your financial life.

, , , ,

Get in touch with us!

Big or small, we’ve got a solution when you need it.