What Exactly is the Big Deal About the New CPF Minimum Sum?

cpf minimum sum singapore

Peter Lin



If a certain opinion editor of a mainstream newspaper is to be believed, no one really cared about the recently announced changes to the CPF Minimum Sum scheme. She would con, I mean, convince you that your reaction to it was “calm acceptance, or indifference”. Put simply, she thinks most of you, after hearing about all these changes just went, “Huh. Okay.”

But the truth is, there are some pretty major changes that will affect how much you get to withdraw from your CPF account once you turn 65. But all the information put out thus far has been rather confusing. So we’ll break it down for you in simple terms and explain what these changes mean.


So how does the CPF Minimum Sum work NOW?

Okay, to make your life easier, let’s talk about how much “simpler” the CPF used to be.

Right now, in 2015, this is what happens to your CPF when you turn 55. Firstly, your Ordinary Account (OA) and your Special Account (SA) are combined into a Retirement Account (RA). If you’re “lucky” enough to have less than $5000 in your RA, you get to withdraw it all. If you have between $5000 and $166,000 in your RA, then you get to withdraw $5000. If you have more than $166,000*, you get to withdraw $5000 and whatever excess you have.

[* based on the CPF Advisory Board Report Executive Summary]

That means, if you turn 55 this year, and only have $100,000 in your Retirement Account today, you will only be allowed to withdraw $5000. And when you turn 65, because the amount in your RA is lower than the Minimum Sum of $161,000, you won’t get to withdraw anything else. Instead, you’ll have to be satisfied with receiving monthly payments of around $900 from your RA.

And that’s why there have been so many complaints about the current CPF scheme. Because even though you have been forced to set aside thousands of dollars of your income over the course of your working life, all you’ve probably seen so far of it before you turn 65 is just $5000. And in retirement, you’re barely receiving enough monthly payments (from your own money!) to live comfortably in a country where the cost of living has been rapidly increasing.


Okay… so what’s different now?



But what do all these changes mean for ME?

Remember how this year, if you had only $100,000 in your Retirement Account, you can only withdraw $5000 when you turn 55? And then when you turn 65, because your Retirement Account is less than you get about $900 payout a month.

When these new changes take effect in 2016, you who turn 55 next year have a choice of pledging their property and opt for the Basic Retirement Sum of $80,500. This means, if you have only $100,000 in your Retirement Account, you can now withdraw $19,500 at age 55. When you turn 65, you have the option to withdraw another 20%, less $5000, of your Retirement Account.

Even assuming you don’t make any further CPF contributions between 55 and 65, that’s still about $19,700 you can withdraw at 65! However, you will only get $580 payout a month.

So, in 2015, those who turn 55 only get to withdraw $5000, and when you turn 65 you get $900 a month.

Those who turn 55 in 2016, you can now withdraw about $39,200 from your CPF upfront, half of that amount at 55 and the other half at 65. However, you’ll only get $580 a month from your CPF after that.

So basically, from 2016 onwards, you now have a choice between getting a tiny ang pao at 55 and then a larger monthly payout, or two larger ang paos at 55 and 65, but a smaller monthly payout after.

Still got questions? So do we. MoneySmart will be discussing exactly what these new changes mean to our CPF in an upcoming article. In the meantime, share your views about the CPF changes with us.

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Peter Lin

I am the poster boy for reinventing one's self. I've been a broadcast journalist, technical writer, banking customer service officer and a Catholic friar. My life experiences have made me the most cynical idealist you'll ever meet, which is why I'm also the co-founder of a local pop culture website. I believe ignorance is not bliss, and that money is the root of all evil only if you allow it to be.

  • Tan Shan

    How does this ties in with CPF Life? I read that at 55 half of minumum sum will be automatically deducted and at age 65, everything remaining in RA will be deducted. Suppose a person has $500,000 at age 55 in 2015, what will happen at 65 if he does not wish to withdraw any money out? And what is the difference in payout for man and woman and why?

    • Hi Ms. Tan,

      The CPF Life monthly payout depends on how much money you have in your Retirement Account at 65. The higher your RA, the higher your monthly payout.

      In the new scheme, you should be able to withdraw from your CPF when you turn 55 and again when you turn 65. You may choose not to withdraw any money. However, you cannot keep more than $241,500 in your RA.

      It seems like men get higher CPF Life monthly payouts than women. It’s not clear why. My guess? It’s because women tend to live about 5 years longer than men.

  • Obviously sounds like a big deal. Thanks a lot Peter for letting me know about the big deal behind the new CPF sum as my father is going to retired in the coming years. Thanks a lot for sharing this information,

  • Pingback: What the CPF Minimum Sum Changes Means for You - MoneySmart.sg()

  • Chris Chin

    Hi if today Mr A is 55 in 2016 and he has $180.000 in his cpf , let say in 2016 minimum sum is $170.000 .So he can withdraw $10.000 plus $5000= $15,000 cash ,so my questions is can he pledge for his property for $85.000 ?

    • Hi Chris, it seems your calculation is not right. If the Minimum Sum is $170,000 and Mr A has $180,000 in his CPF, then normally he can only withdraw at most $10,000 when he turns 55.

      However, in 2016, he will be given the option to pick the Basic Retirement Sum. That means he can pledge his property, and withdraw a larger amount from his CPF at 55. However, do note that his CPF Life monthly payout will be lower as a result.

      • Chris Chin

        Thank Mr Peter for your informations

  • Ms Hon

    Would this new scheme be applied retrospectively to people who are now above 55 years and who had lower minimum sums imposed then?

  • Shane Tan

    Hi Peter,

    I read the executive summary by the advisory panel which you mentioned above, and found 3 examples from page 14 to 15 illustrating cases of 3 male individuals who have $15,000, $80,500 and $161,000 respectively in their Retirement Accounts at age 55 in 2016.

    It was further mentioned in those examples that these amounts ($15,000, $80,500 and $161,000) would have grown to $24,000, $123,600 and $240,500 respectively by the time they reach 65.

    I did a quick calculation and arrived at the numbers $24,433, $126,363 and $245,523 (rounded to the nearest dollar) instead. I had assumed that the birth dates of these individuals fall on 1 Jan, the interest rate for Retirement Account is constant at 4% throughout, there is an additional 1% interest on the first $60,0000 balance in RA, and there are no further contributions to the RA other than the interest earned. These do not include the additional 1% interest on the first $30,000 in the Retirement Account as the executive summary was issued before the Budget 2015 announcement.

    I was wondering if you had done similar calculations and if you could advise where I could have gone wrong in my calculations.

    Thank you so much.

    • Peter Lin

      Hi Shane, thanks for your comment.

      As far as I can tell, there seems to be nothing wrong with your calculations. However, I hope you understand that we only have access to the same information you do, so we can’t say for sure how the CPF Advisory Panel obtained these particular numbers. All the Advisory Panel indicated was that they used “current CPF interest rates” (footnote 18 on page 12). Why these interest rates appear lower than the 4% rate for Retirement Account is not immediately clear.

      Hope this helps somewhat!

  • Temasek

    That is if we managed to survive our stressful jobs and live to be 65!

  • Bob Koh

    It was intentional to make CPF Rules Complicated and Vague so nobody really understand . They ( PAP – CPF ) have the upper hand to Twist & Turn when they rejects complains Individually . So there is no clear cut line where collectively as citizens u can form a Group and put a finger at what they are really doing …. Not Returning your Hard Earn Money

    • Ash

      Vague? Seriously? It’s your fault that you can’t understand a simple document. Aren’t you ashamed of yourself? Please do yourself and us a favour. Don’t procreate.

    • DunComplain

      I understand leh. Its quite simple actually.
      if you don’t trust the CPF, then go be a self employed, property agent, insurance agent, hawker or taxi driver lah, then you don’t need to contribute CPF.

      Its just so obvious its always the people who don’t know how to make or keep money complain the most.

      • Complain

        Haha @duncomplain:disqus is a joker, limiting one’s area of expertise just to evade CPF.
        You can tell he is a staunch PAP supporter 🙂
        People are hard up about getting their money back because simply it’s theirs,
        it’s your hard earned money that the government “saved” for you,
        By the time you are 55, I’m sure you can already afford a HDB flat at least.
        Then if you are single, you can rent out other rooms for income, or if you have children, in another few years they will move out and you can get income from rental.
        I believe even so, the minimum sum should be really “minimum”(minimal).
        Sometimes I wonder is it because they cannot afford to return all the CPF monies out?
        Who knows, opposition with no power can question them on this also, we need a balance in the Government. Absolute power corrupts absolutely.

        • DunComplain

          Haha typical loser. Always have to use political parties to garner support to win arguments. Always assuming PAP this, WP that, SDP those. From your statement, I can tell you barely make 60K a year, giving you twice of that you will still be a sad person Sorry to hear about your sad life. Fortunately, I never have to worry about my CPF, I take it as a donation to my country. Why? Because I have already earned enough to retire before I hit 50 years old without the need for CPF. You are probably one of those who struggles in your daily life, that’s why u need to complain so much. What’s a couple of 100K in the CPF?
          Word of advise, spend less time complaining and more time building your wealth. You can retort what you want, it just shows how desperate you are for money…

          • Complain

            Childish antics from a middle aged man,
            PS. I’m still in University(ultimate fail guess… 60k a year haha), my future is brighter than your bald patch will ever be :p
            I apologise for my comment on your bald patch, but I got to get to your level so maybe, just maybe you might comprehend 10% of what I have to say.
            As he said he take it as a donation to the country.
            Guys you can tell the money he’s making I not hard earned, from a psychologist’s point of view, I can tell he is the type that came from a well off family, parents as backers for his business etc… …

            You can see from the majority of Singaporeans, they put in the hours at work, some even give more than 100%. You my friend, don’t know what is the true meaning of Hard Earned Money.
            That’s why it’s so easy for you.
            Continue living in your small circle of friends believing you are a bunch of better people cause you make more money and have a bunch of fake friends 🙂

          • DunComplain

            Kids nowadays. Tsk tskm Bald patch? Me, whatever!
            You, University? Wonder who is paying for it? Your parents of course who spoon fed you…
            Me, rich family? Looks like your judgement of character totally failed.
            Still studying what do you know about adulthood.
            What do you know about working hard?
            What do you know about contribution to the public? Oh please! Little kid.. Grow some pubic hairs before u even start talkng
            Your generation are made up mostly losers like you who only knows how to live off your parents.
            I hope your parents will stop hoping that their child can ever hope to take care of them when they grow old..
            Hope u find a job with someone who wants to employ you.
            Have fun taking care of the shit that the world is becoming Becos of u… Hahah

          • Complain

            If you say so :p

            I think he is going through menopause. Old and single.
            Anyone watched the movie “40 year old virgin” acted by Steve Carell?
            It should be exactly like @duncomplain:disqus except, its not going to be funny 🙁 haha

          • DunComplain

            Haha … happy that you feel ths way

          • Complain


  • LeoLovesRM

    Even so at age 65, $39200 is not $100000. tell me what happens to the rest of the amount? $337.70/mth for the rest of your life until age 80? Frankly how many people can live till that age? And if it’s OUR money, why can we choose to live (or die) enjoying our fruits our own way?

    • DunComplain

      Don’t be an idiot, Let’s say you withdraw everything.. and you live till 75 years old.. who is going to take care of you? you think you can still work? Even if you can, you think people want to employ people like you at your age?
      Then how? You expect government to give you money?? If they do? where do you think the money is coming from? HIGHER INCOME TAX YOU IDIOT!

      Who lives till 80? FYI, Both my grandparents live past 85 and one is still alive and turning 90 this year.

      Then now i post you this question, you are given an option not to contribute any CPF but you pay 40% income tax so that you can help support all those who can’t work and those who can but refuse to work because they are idiots like you with no CPF… would you want that instead??

      If you are so sour about CPF, then go work as Taxi Driver! no need to contribute OA & SA at all!
      Please stop complaining like a baby. If you cannot afford it, go live in batam lah.

  • vincent

    Hi Peter,
    I am turning 55 this year and assuming I have $250000 in my RA. Is it better to opt for $80500, $161000 or $ 241500.
    Also is it better to withdraw from RA and but a retirement from the insurance company?

    • Hi Vincent,

      I don’t think I can answer that question without further information. The whole point of the various Retirement Sums is to give Singaporeans the option of deciding how much of their CPF savings they want to leave in their Retirement Account. This then has an effect on the monthly payouts you get through CPF LIFE. The more you leave in your Retirement Account, the better the payout that CPF LIFE gives.

      I have to remind you that CPF is principal-protected and has guaranteed interest rates of up to 6% for those aged 55 and above, and up to 5% for those below 55. But of course, there are many opportunities to get higher returns outside of CPF (you mention an insurance company). However, those usually aren’t principal-protected. So, only consider that option if you can afford the risk.

      Ultimately, a Singaporean’s average lifespan is about 82 years of age. One of our financial priorities should be to make sure we’re financially prepared to live for at least that long.

  • Ignatius Kwok

    I have a question, my uncle already 75yrs old and his RA is 0. For the past 10 yr he is working and most of the money go into medisave. This what we don’t understand why.
    Is there anyway if he can request to split his mediave to RA acc? So that he still can receive money each month

  • AreWeCheated?

    For BRS, payout is $X.
    For FRS which is 2 times of BRS, payout is less than $2X.
    For ERS which is 3 times of BRS, payout is less than $3X.

    Seems obvious the BRS is most worth it.
    You leave more money in RA, but you dont get the proportioned amount.

  • Richard Tan

    My query is how long will this payout from my RA last until what age? Life?

    If my RA reach $161000, and I die at 70 years old. Where will my remaining RA go to? My family? How much RA go back to my family?