CPF question.
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Hi guys,
In layman terms, what's the latest rule with regards to drawing out CPF when we retire? -
In young man terms we are too young to know.Originally posted by trueno86:Hi guys,
In layman terms, what's the latest rule with regards to drawing out CPF when we retire? -
Very laymanish liao wor..
http://www.cpf.gov.sg/MyCPF/goto.asp?page=Reaching55_Main.asp
When you reach 55, you have 2 options:
1. Withdraw a lump sum savings from your Ordinary (OA) and Special Accounts (SA) after setting aside the Minimum Sum in your Retirement Account.
The Retirement Account is for your old age needs. Manage the CPF money withdrawn carefully as it is your old-age savings which will see you through the next 20 years or more.
2. Postpone your withdrawal until a later date if you can be financially independent and if you are still working.
You can continue to build a larger nest egg, at the same time earn the interest of 2.5% in OA and 4% in SA . -
How much is the Minimum Sum?
Setting aside the Minimum Sum when you reach 55 ensures that you have some regular income from age 62 onwards to live on in your retirement.
The Minimum Sum had been set at $80,000 in 2003 and will be raised gradually until it reaches $120,000 (in 2003 dollars) in 2013, and will be adjusted yearly for inflation.
55th birthday on or after Minimum Sum
1 July 2003 $80,000
1 July 2004 $84,000
1 July 2005 $88,000
1 July 2006 $92,000
1 July 2007 $96,000
1 July 2008 $100,000
1 July 2009 $104,000
1 July 2010 $108,000
1 July 2011 $112,000
1 July 2012 $116,000
1 July 2013 $120,000
The minimum sum is ever increasing though.. -
What can I do with the Minimum Sum?
You have 3 options to invest your Minimum Sum:
1. Buy a life annuity from a participating insurance company.
If you buy a life annuity, you will get a monthly income for life. You can use your Retirement Account balance to buy an annuity. Approach a participating insurance company with your latest Statement of Retirement Account to buy a life annuity.
2. Keep it with a participating bank.
You can keep your Minimum Sum as a fixed deposit with a participating bank and earn a fixed interest. The bank will then pay you a monthly income until your Minimum Sum is exhausted.
3. Leave it with the CPF Board.
The Minimum Sum left with the CPF Board currently earns 4% interest per annum. The interest rate is revised every quarter.
You will get a monthly income until your Minimum Sum is exhausted. -
All these , at the expense if you don't die early.
If not, after putting it in HDB, and working almost for your whole life, you don't get to enjoy much.
Afterall, cannot imagine of by age of 55, everyone can withdraw everything from their CPF account. Will the garmen able to sustain itself without our $$?