Turning 55 is often thought of as a major milestone for Singaporeans, but what does it mean for you and your CPF savings? Here are 3 things all Singaporeans should know:
1. A fourth account, the Retirement Account (RA), will be created for you at 55
On top of your Ordinary Account (OA), Special Account (SA), and Medisave Account (MA), a new account, the Retirement Account (RA) will be created for you when you turn 55. Savings from your SA and/or OA will be transferred to your RA to form your retirement sum.
2. How much you should set aside in your RA depends on the monthly payout amount you want to receive in your retirement years
Based on your desired lifestyle in retirement, you should aim to set aside a retirement sum that provides you with monthly payouts that suit your individual needs.
3. You are not required to top up your RA with cash even if you have not reached the Basic Retirement Sum
Upon setting aside savings from your OA and SA, you may realise that you have yet to reach the Basic Retirement Sum (BRS) in your RA. You are not required to top up your RA with cash to make up the difference. However, if you have any new CPF contributions, government top-ups or other refunds received after 55, part or all of these amounts will be transferred to your RA when you next withdraw your CPF. The amount that you have in your RA will form your retirement sum and provide you with monthly payouts from your payout eligibility age.
Information accurate as at 30 December 2016.