How Much is CPF Retirement Sum

CPF Retirement Sum.  Easy yet complicated.

Fact #1 - For your retirement needs

Firstly, to withdraw money from your CPF at age 55, you are required to meet the CPF retirement sum.  At the age of 55, one's money in the Ordinary Account and Special Account are swept into the Retirement Account.

Will you be happily retired?

Fact #2 - Different amounts

Everybody's retirement sum differs based on the "cohort" they are in.  As example, people who turn 55 in the year 2020 have the following retirement sums:

a.    Basic Retirement Sum (BRS) = $90,500

b.    Full Retirement Sum (FRS) = $181,000

c.    Enhanced Retirement Sum (ERS) = $271,500

We love acronyms in Singapore.  As if this does not get complicated enough, there are 3 different retirement sums.  And the retirement sum figures changes every year!  CPF Board tries to give people an early indication of what their basic retirement sum will be.  Currently, it is estimated to go up by 3% each year.  The FRS and the ERS are set at 2 times and 3 times of the BRS respectively.  

That means, FRS = 2 x BRS = 2 x $90,500 = $181,000.

Likewise, ERS = 3 x BRS = 3 x $90,500 = $271,500

From this, you can tell that only the BRS matters as once it is computed, you can determine the FRS and ERS applicable to your cohort.

Fact #3 - Not meeting FRS or BRS 

If you do not meet the full retirement sum....you do not have to do anything.  There is no need to top up in cash to the full retirement sum.

What happens if you cannot meet the basic retirement sum too?  No worries.  You don't have to do anything either.

This is what happens under the various scenarios:

1.  Retirement Account has less than $5000?  You can withdraw all your money.  You have no money in your retirement account and will not qualify for CPF Life.

2.  Retirement account has more than $5000 but less than basic retirement sum?  You get to withdraw $5000 at age 55.  Wait till age 65 for payouts.  Property (if you have HDB) to be pledged to meet BRS.

3.  Retirement account more than basic retirement sum but less than full retirement sum?  All good.  You can withdraw $5,000.  Wait till age 65 for payouts.  Property (if you have HDB) to be pledged to meet FRS.

In all instances, one will never be required to top up or sell your property to meet the FRS or BRS.  Any property pledge must have minimum 30 years lease left (and cannot be 2 room flexi). Pledging your property means that in the event that you sell your HDB flat, the pledge amount will be used to meet the retirement sum shortfall which you previously pledged.

To simplify it further, those who meet the FRS will not have to worry about property pledging (unless if you are married and your other half does not meet the FRS and you co-share a property).  In that instance, only his/her share of the property will be pledged in order for them to meet the retirement sum amounts.

Confused?  Drop a comment!