So, many people, EDUCATED people, are still bloody clueless about what they can do with their CPF and keep making a fuss about it. Here’s how easy it is.
Before you reach 55 years old, your CPF is basically 3 accounts – OA (Ordinary), SA (Special) and MA (Medisave). You use OA for housing loans or shares. You cannot touch SA at all except for some selected shares you want to invest in. You only touch MA when you need to pay for medical attention at govt clinics and hospitals. Throughout your working life, money keeps going into these 3 accounts.
At 55 years old, let’s assume CPF says the min sum is $200,000. Let’s also say, for easy illustrative purposes, your OA contains $30,000 (cuz you used it to pay for HDB) and SA contains $180,000 when you turn 55
CPF will create a 4th account – RA (Retirement Account). What it does is look at your SA (which basically you can’t touch), and transfer whatever it needs to reach $200,000. But since you only have $180,000, this action will deplete your entire SA, but you still haven’t met the $200,000 mark. No worries. CPF will then look at your OA which has $30,000. It takes $20,000 out to transfer to RA, making a total of $200,000 in RA (min sum).
So that means your OA is now left with $10,000. You can take the entire amount of $10,000 out, at 55. Not the 5K that everybody is talking about. You take 5K only when both SA and OA don’t meet the min sum set by the CPF.
As you continue to work past 55, your OA and SA continue to get money coming in. You RA is now untouched and contains $200,000. What you can do is every few months, continue to transfer whatever is in the SA into RA, thereby helping to beef up the original $200,000 set aside. So that means you get more than $1,500 a month (or whatever amount CPF website says).
Now, in the event you don’t meet the $200,000, but your RA has $150,000 after CPF has emptied both your SA and OA. No worries. As you continue to work, transfer your SA to RA. The $150,000 will increase. Your can choose to transfer your OA to RA too. The point is, even if you don’t meet the “min sum”, you will still get something. It may not be $1,500 as promised by CPF, but it’ll be pro-rated… maybe you get $1,100 a month instead. Again, you will need to calculate based on what CPF has published for that year.
At 65 years old, you NEED to manually apply to get that $1,500 a month, or else CPF will give your money out to you at 70 automatically if you don’t apply at 65. This is what the recent KPKB was about – CPF moving the automatic payout age from 65 to 70. If you still want your money at 65, just apply. This money will then come from your RA and the 10 yrs of interest it has earned since you were 55 (so it’s going to be more than $200,000).
And, everybody will get payouts monthly UNTIL THEY DIE, not just for 20 or 30 years. That was the old scheme for people turning 55 BEFORE 2009. Now, everybody will go on CPF LIFE scheme, which means CPF pays you monthly until you die.
If you are not on CPF LIFE scheme, you can APPLY to be in. CPF won’t automatically add you in if you turned 55 before 2009.
See? Easy. No need to KPKB. No need to protest anything. Do your own research.