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When can we take out our CPF?

How hard is it to take CPF money for retirement in Singapore before you die?

  • I've seen many people criticizing it because it is hard to use that money, for example this cartoon by https://www.facebook.com/DemoncraticSingapore: In reality, how hard it is to take the CPF money? Are there many restrictions that make it hard to enjoy that savings?

  • Answer:

    The rules are pretty rigid but it is not as hard as it seems if you met the withdrawal conditions. Let me first explain a little about CPF. CPF is a form of compulsory savings that seemingly puts Singaporeans at an disadvantage during salary negotiations in comparison with foreigners who have obtained PR/LTVP/DP status. Foreigners who have gotten their PR or Long Term Visit Pass (usually by marrying Singapore Citizen or PR) not only do not need to pay foreign worker levy or meet any quotas, they are also not required to pay CPF.   Any Singaporeans earning more than S$750 a month (note that the rental of a common room in a public housing average between S$600-S$900) and is under 51 years old (from month of birth) are required to pay as much as 36% of the wage. Employees contributes 20% while employers contribute 16%. They rates would slowly go down to 11.5% when you are above age 65. Note that even if a 14yo decides to work part-time during the holidays & accumulate S$50 or more in wages for that month, CPF contributions are mandatory.   Money in the CPF account CANNOT be withdrawn even when you or your immediate family members are facing potential bankruptcy charges. Hence you can imagine how this is a MANDATORY savings scheme.   So when can someone withdraw money from his CPF account?   1. Purchasing a property Most Singaporeans will actually use their CPF account to pay part of the 20% deposit for their first property (using a public housing - HDB flat). Of the 20%, 5% must be cash payment (mandated by law) and the other 15% can be offset by your available CPF savings. Your spouse and yourself may also use the CPF savings to off-set the purchase price as well as to put for the monthly instalments of the mortgage. Such allowance is available for second and/or private properties in Singapore as well. Sky property prices in recent however, would have easily wiped out most Singaporean's CPF account during their prime working years.   2. Reaching the withdrawal age The current withdrawal age is set at 55years old. You may withdraw any amount exceeding the minimum sum which has just been recently raised to S$155,000. This minimum sum can be lowered by pledging your property (up to a maximum of $74,000, subjected to independent valuation & dependent on your existing mortgage etc).   3. Retirement At retirement age (which has been raised yet again to 62. Upon reaching 62 years old, you are eligible to get monthly hand-outs from your CPF accounts. It is adjusted that the monthly pay-outs will last 20 years (till you are about 82) since the life expectancy of Singaporeans is about 85-87 years old.   4. Medical Grounds You may withdraw any amount exceeding the reduced (amount as per approval by CPF board upon application) minimum sum. On what medical grounds? You don't want to be there. The board states that the valid medical grounds being YOU ARE   (I) terminally ill OR (II) have a severely reduced lifespan OR (III) suffering from an illness rending you PERMANTLY UNFIT for ever continuing in ANY employment.   So what do you think? Is it difficult to withdraw your CPF savings?

Willy Tan at Quora Visit the source

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What is the CPF for? Simply: it is to ensure that you have enough to survive on for your retirement when you just want to rest, to buy you some form of independence, even if you had not planned for your retirement, even if you didn't become a millionaire and even if you have no money in your bank. This is done through an annuity. Is it hard to draw out? Yes. It has to be because the money in it is supposed to last till you die. Given that the life expectancy is increasing, and people may live past the life expectancy the govt needs to ensure payouts are sustainable.  This means that they had to and increase the minimum sum. Allowing people to buy HDB flats is also a way of ensuring some form of saving because the HDB sometimes buys back HDB houses from elderly, for a fixed amount of money every month. This might not make sense to us young folk now, but it probably will make a lot more sense when we're old and no longer able to earn a living. Is it paternalistic of our govt to force us to save for the future? Yes, very much so. But it is also pragmatic in the sense that they don't need to tax current taxpayers more money to support the increasing elderly population. Is the scheme perfect? Definitely not. No scheme is perfect, and no scheme can ever be. The govt has to choose which cons it can best live with. It is just whether the citizens concur.

Cordelia Yang

U will die while trying, better off robbing a bank.

Ong Kee Siong

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