All CPF members can withdraw up to $5,000 of their CPF savings from age 55.
On top of that, members have the option to withdraw their remaining CPF savings (the combined balances in the Ordinary, Special and Retirement Accounts), after setting aside the required retirement sum for their cohort.
Those who own a property will need to set aside a Basic Retirement Sum (BRS), while those who don’t own a property need to set aside the Full Retirement Sum (FRS).
Members can also choose to set aside the Enhanced Retirement Sum to enjoy higher monthly payouts in retirement. Even if you do not have the BRS, you will still receive monthly payouts when you reach your payout eligibility age.
For members turning age 65 from 2023 onwards, they can also withdraw up to 20% of their Retirement Account savings in a lump sum anytime from age 65 onwards.
The rest of their Retirement Account savings will be used to provide them with monthly payouts to meet their retirement needs.
How do we compare with other pension schemes?
*Pension systems often comprise of multiple schemes. This diagram is based on schemes with the widest coverage, excluding basic pensions, from the top 10 countries in the Melbourne-Mercer Global Pension Index* (MMGPI) plus Malaysia and Hong Kong.
Among the retirement schemes from 12 countries sampled, four allow members to make a full lump-sum withdrawal, while the other eight only allow withdrawals in phases or through annuity payments.
Singapore allows members to make some lump-sum withdrawals from their CPF while the rest of their savings would be paid out in monthly retirement payouts.
This strikes a balance between providing flexibility and ensuring that retirement needs are met.
Singapore streams out retirement savings through a life annuity, CPF LIFE
This allows members to enjoy their retirement without the worry of outliving their savings. Pension systems in other countries like Finland, Netherlands and Norway do the same.
CPF withdrawal rules are sufficiently flexible for many Singaporeans
Around 60 per cent of members have not taken out all CPF monies available to them when they turned 55.
Based on a 2018 study by NUS researchers, a large proportion of members who withdrew monies from their CPF at age 55 opted to keep the monies in a bank account instead of spending or investing them for greater returns.
CPF withdrawal rules are well-regarded internationally
Singapore earned the top score in the MMGPI when assessed on the proportion of retirement benefit set aside for lump-sum vs. phased withdrawal.
*The MMGPI is an annual global pension index that compares countries’ retirement systems in terms of the adequacy of benefits or retirement income provided, and areas such as the long-term sustainability, regulation and governance of pension systems.