The Retirement Sum Scheme offers a fixed income each month so you can sustain a basic standard of living after you retire. This scheme was introduced in 2009 to provide a steady income for as long as you live. The money from your Special Account (SA) and Ordinary Account (OA) will be combined to form your Retirement Account (RA). The Retirement Sum Scheme offers you monthly payouts until the funds in your RA are exhausted. However, if you choose to enrol into CPF LIFE (if you are not a part of it yet) using these funds, you will enjoy monthly payouts for the rest of your life.
How the Scheme Works
You will have to be a part of CPF LIFE if you are a Permanent Resident or a citizen born in the year 1958 or after. The entry age for this scheme is 55 years and you will start getting the payout from the age of 65. You must have the following Retirement Account balances:
|If you have turned 55 between 1 January 2013 and 30 April 2016||If you have turned 55 on 1 May 2016 and after|
A minimum of S$60,000 in your Retirement Account six months prior to your reaching the payout age.
A minimum of S$40,000 in your Retirement Account when you reach 55.
A minimum of S$60,000 in your Retirement Account six months prior to your reaching the payout age.
What Amount Needs to be Put Aside for Retirement?
There are three levels of retirement sum that you can set aside in your Retirement Account –Enhanced, Full and Basic Retirement Sum. The amount that you get each month after retirement will be determined by the three Retirement Sums you manage to maintain adequately. Here is the range of payout options and equivalent retirement sum that must be set aside if you are turning 55 in 2018:
|Condition||Retirement Account savings needed at 55||Monthly payout for life from 65|
|You are the owner of a property and have chosen to take out the Retirement Account savings in excess of your Basic Retirement Sum||Basic Retirement Sum S$85,500||S$720 - S$770|
|You do not own a property or you have decided not to withdraw money from your Retirement Account in excess of your Basic Retirement Sum||Full Retirement Sum (FRS) S$171,000||S$1,320 - S$1,410|
|You wish to put more in your CPF LIFE account||Enhanced Retirement Sum (ERS) S$256,500||S$1,910 - S$2,060|
If you keep setting aside a sum for retirement, you will ensure a steady income from your payout age, to sustain a basic standard of living. In case you are not part of CPF LIFE, you can apply to join CPF LIFE anytime between your payout age and before turning 80 or stay on the Retirement Sum Scheme. Based on your year of birth, one of the following things will happen:
- You can apply to join CPF LIFE
- You can continue to be on the Retirement Sum Scheme
- You can enrol for CPF LIFE
Here is a table showing what you can do with your retirement sum based on your birth year:
|Birth Year||What You Can Do|
|1957 and earlier||Apply to join CPF LIFE any time before you turn 80, or stay on the Retirement Sum Scheme.|
Once you attain the age of 55, your savings in Special Account and Ordinary Account will be shifted to your Retirement Account that forms your retirement sum. This amount can be combined with CPF LIFE. This amount offers lifelong monthly payout until your account balance is exhausted. Once you set aside the Full Retirement Sum with sufficient property pledge, you can either continue to keep the money in the account and earn interest or you can withdraw the amount.
Get an extra 1% interest on the first S$30,000 if you are 55 or more. This interest is in addition to the existing additional 1% interest on the first S$60,000 of the total CPF balances.
Basic Retirement Sum
In case you are planning for early retirement, you will be informed about the Basic Retirement Sum well ahead of time. For each successive group of people turning 55, the payouts will be higher to account for rising standard of living and inflation. Similarly, the Basic Retirement Sum to be set aside will increase. Here is a table showing the Basic Retirement Sum according to your age:
|Your Age||Basic Retirement Sum|
|Age 55 in 2016||$80,500|
|Age 55 in 2017||$83,000|
|Age 55 in 2018||$85,500|
|Age 55 in 2019||$88,000|
|Age 55 in 2020||$90,500|
Full Retirement Sum
Here is the table showing the Full Retirement Sum that will be applied to members turning 55 from 1 July 2003 to 2020:
|55th birthday on or after||Full Retirement Sum|
|1 July 2003||S$80,000|
|1 July 2004||S$84,500|
|1 July 2005||S$90,000|
|1 July 2006||S$94,600|
|1 July 2007||S$99,600|
|1 July 2008||S$106,000|
|1 July 2009||S$117,000|
|1 July 2010||S$123,000|
|1 July 2011||S$131,000|
|1 July 2012||S$139,000|
|1 July 2013||S$148,000|
|1 July 2014||S$155,000|
|1 July 2015||S$161,000|
|1 July 2017||S$166,000|
|1 July 2018||S$171,000|
|1 July 2019||S$176,000|
|1 July 2020||S$181,000|
Enhanced Retirement Sum
Members who want to get higher payouts can set aside the Enhanced Retirement Sum, which is three times the Basic Retirement Sum.
|Condition||Retirement account savings needed at the age of 55||Monthly payout for life from the age of 65|
|If you wish to put more savings in CPF LIFE||S$256,500||S$1,910 - S$2,060|
How to Top Up the Retirement Sum of Family Members
There is an option of topping up the Retirement Sum of your family members from your CPF savings to augment their retirement savings. You can top up your own savings or the savings of your grandparents-in-law's, grandparent's, parents-in-law's, parent's or sibling's CPF account through the Retirement Sum Topping-Up Scheme.
You can top the retirement sum of your family members through the following ways:
- Through cash
- Using the your CPF savings
The table below shows the CPF savings you can transfer to your grandparents-in-law's, grandparent's, parents-in-law's, parent's or sibling's CPF account:
|If you are 55 or more||You can transfer the savings in your Ordinary Account after keeping aside the appropriate Full Retirement Sum. The Full Retirement Sum can be kept aside using your Ordinary Account and Special Account savings, including the sum taken out for investments, and Retirement Account savings.|
|If you are below 55||You can transfer the savings in your Ordinary Account after keeping aside the current Full Retirement Sum. The Full Retirement Sum can be kept aside using your Ordinary Account and Special Account savings, including the sum taken out for investments.|
The table below shows the maximum amount of CPF savings you can transfer to your spouse’s CPF account:
|If you are 55 or more||The amount in your CPF account after keeping aside the appropriate Basic Retirement Sum. The Basic Retirement Sum can be kept aside using your Ordinary Account and Special Account savings, including the sum taken out for investments, and Retirement Account savings.|
|If you are below 55||The savings in your Ordinary Account after keeping aside the current Basic Retirement Sum. The Basic Retirement Sum can be kept aside using your Ordinary Account and Special Account savings, including the sum taken out for investments.|
How to Use Your Retirement Sum
The Retirement Sum has been kept aside precisely for your retirement needs and will be given out as monthly payouts as part of CPF LIFE or the Retirement Sum Scheme. You cannot use the retirement sum for purposes like housing, insurance premium payments, investment or education.
The cash that you use for top-ups will be part of your retirement sum. However, the top-up cash in your Retirement Account cannot be used as your Basic Retirement Sum in calculating how much savings from your Retirement Account can be taken out through CPF property charge or pledge.
Retirement Payouts You Will Receive
The retirement payouts that you receive each month will be based on the Basic Retirement Sum that you have set aside. You will be informed about the sum that you need to set aside beforehand. You will start getting the payout at the age you choose to receive your monthly payouts. You can opt to start your payouts anytime from your Payout Eligibility Age to age 70.
The payout eligibility age is as shown in the table given below:
|Year of Birth||Payout Eligibility Age (years)|
|1943 and earlier||60|
|1944 - 1949||62|
|1950 - 1951||63|
|1952 - 1953||64|
|1954 and after||65|
How to Apply for Monthly Payouts
You can start your monthly payout from your Payout Eligibility Age and you can apply for it using the following channels:
- Complete the ‘Apply for Monthly Payouts under CPF Retirement Sum Scheme’ (Form RSS30) and mail it to CPF Board, Retirement Schemes Department. Robinson Road P.O. Box 3060 Singapore 905060.
- Complete the online application through ‘my cpf Online Services-My Requests using your SingPass’.
Once your application is completed successfully, you will start getting your monthly payout the following month or the month you reach Payout Eligibility Age, whichever is later.
How to Apply for Exemptions
If you wish, you can get an exemption from setting aside a sum under any one of the following circumstances:
- You have your own life annuity where the payout you get each month is either equal to or more than the total monthly payout.
- You are a pensioner who is getting a pension each month which is equal to or more than the total monthly payout.
You can apply for an exemption by submitting a copy of the recent letter issued by the Pension Office of the Accountant-General’s Department confirming the pension amount or the annuity policy. You will have to take note of the following points when you apply for an exemption:
- You should be over 55 years of age.
- You cannot invest in instruments like bonds and endowments.
- You must receive the payment from your annuity pension/policy each month for life.
- If you surrender your annuity policy after an exemption is granted, you will have to refund the retirement sum taken out and the accrued interest to your Retirement Account.
- You cannot pledge your annuity policy for taking a loan as the CPF Board has to secure the refund of the retirement amount in addition to the accrued interest after the closure of the policy.
- You must be the sole insured person as well as the policy holder of the annuity policy.
- You have the option of using more than one annuity policy to get an exemption.
- The sum you take out from your Retirement Account does not include any funds topped up to your Retirement Account under the Topping-Up Scheme.
- Once you get the exemption, you will no longer be entitled to get top-ups under the Topping-Up Scheme unless you choose to join CPF LIFE Scheme.
- You cannot take out an amount lower than the sum payable to you after exemption.
Q. What is a CPF property charge?
A. The charge created on your house when you make use of your CPF savings to purchase the house. The value of the charge is the interest you would have gotten on the savings plus the total amount of CPF savings used for the house.
Q. Can I pledge my private property to take money out from my Retirement Account more than the Basic Retirement Sum if I am bankrupt?
A. No, you cannot pledge your private property to take money out from your Retirement Account if you are bankrupt, even if the sum is more than the Basic Retirement Sum.
Q. Will I be able to pledge a property that I own in partnership with others?
A. Yes, you can pledge a property that you own in partnership with others if you have taken consent from all co-owners, for your pledge application.
Q. Can I use the savings in my Retirement Account to purchase a house?
A. Yes, you can use any amount in excess of the Basic Retirement Sum from your Retirement Account to purchase a house. For example, you are over 55 on 1 January 2016 and you have kept aside S$150,000 in your Retirement Account, the Basic Retirement Sum applicable to you is S$80,500. You can use the excess amount which is S$69,500 to pay for your property. The amount you save in your Retirement Account, Ordinary Account and Special Account will be used to meet your Basic Retirement Sum.
Q. What is Voluntary Deferment Bonus and Deferment Bonus?
A. Deferment Bonus also known as D-Bonus is an incentive offered to participants who have been impacted by the raising of the payout eligibility age. Voluntary Deferment Bonus also known as V-Bonus, is the incentive offered to participants who have willingly postponed their monthly payouts.