Most of the time when we talk about CPF contribution, we are usually thinking more of the Employer / Employee contributions. Let’s not forget, CPF contributions for freelancers or Self-Employed is equally important for retirement planning.
This interesting question just popped up today:
Can RSTU cash top-up to SA be withdrawn from age 55 onward after meeting FRS (or BRS with property pledge) in RA account?
There are 3 objectives of building up the firepower in your CPF account:
- Enjoy a larger sum of money at a higher interest-bearing account in your CPF
- Maximise tax reliefs by doing RSTU cash top-ups
- Increase the CPF LIFE monthly payouts in time to come, which is supported by annuity premium paid from your RA monies.
How much can I withdraw from age 55?
From age 55, you can withdraw up to $5,000 from your Special and Ordinary Accounts, or your CPF savings after you have set aside your Full Retirement Sum in your Retirement Account, whichever is higher.
Your Full Retirement Sum can be set aside fully with cash, or with cash (i.e. at least the Basic Retirement Sum) and property. For the latter, it will exclude interest earned, any government grants received and top-ups made under the Retirement Sum Topping-up Scheme.
If you were born in 1958 or after, you also have the option to withdraw up to 20% of your Retirement Account savings as at age 65. This includes the first $5,000 that can be withdrawn from age 55.
When you reach age 55, your RA account is created first with monies from your SA account, then OA account, up to FRS amount. MA monies remain status quo for medical related expenses, claims and hospitalisation insurance premiums.
The excess monies after meeting FRS (or BRS amount with property pledge) can be withdrawn at any time.
BUT… how much of this excess monies can be withdrawn actually?
By top-ups, i refer to:
- Voluntary Contribution to All 3 accounts (OA, SA and MA);
- RSTU cash top-up to SA;
- Top-up MA only
If you meet FRS amount in your RA however, it is a clear-cut that you can withdraw the excess from your SA/OA.
How about for people who intend to pledge property, to withdraw the gap between FRS and BRS from their RA. Can they withdraw ALL of it between? How much more can they withdraw?
Prevailing FRS amount for FY2020 is $181,000.
Scenario 1: Assuming that you had OA ($0) and SA (made up of $100,000 mandatory contribution and $100,000 RSTU cash top-up) on the day of age 55. Your RA is newly created with $181,000 monies, with excess $19,000 in SA account. You will be able to withdraw this $19,000 from your SA since you met FRS. If you further pledge property to meet FY2020 BRS amount ($90,500), you will be able to withdraw the excess, or $9,500 amount from your RA. Total amount withdrawn = $19,000 + $9,500 = $28,500
Scenario 2: Assuming that you had OA ($0) and SA (made up of $50,000 mandatory contribution and $150,000 RSTU cash top-up) on the day of age 55. Your RA is newly created with $181,000 monies, with excess $19,000 in SA account. You will be able to withdraw this $19,000 from your SA since you met FRS. If you further try to pledge property to meet FY2020 BRS amount ($90,500), you actually have no excess withdrawable from your RA. Total amount withdrawn = $19,000 + $0 = $19,000.
To end off, it is very clear as well from the CPF website on the use of top-up monies in the calculation and withdrawal of excess CPF monies after meeting BRS amount.
| How can top-up monies be used? Top-up monies are set aside specifically for retirement needs and can only be used for monthly payouts under the Retirement Sum Scheme, or CPF LIFE1. It cannot be withdrawn in cash or used for any other purposes such as education, investment, insurance premium payments, housing etc. Top-up monies will form part of your retirement sum. However, top-up monies in the RA will not be taken into account in computing how much RA savings2 can be withdrawn in cash (for property owners), as well as how much RA savings2 can be used for housing purpose and CPF transfers to spouses. 1 Note that non top-up monies will be used first before top-up monies. 2 RA savings refers to the cash set aside in the RA (excluding amounts such as interest earned, any government grants received and top-ups received under the Retirement Sum Topping-Up scheme). |
Theory of Constraints 
Could you verify? There are many sources saying differently. I have read this as well:
https://heartlandboy.com/money-withdraw-from-your-cpf-at-55/
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Have revised the post for better clarity. Apologies for any confusion!
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Hi, would like to further check the following:
Let’s say a person withdraws all that’s allowed and the rest is being transferred to the RA at age 55. Now, he continues working beyond age 55, continues to make mandatory contributions to the 3 CPF accounts.
Are these fresh contributions (from OA and SA) withdrawable anytime? (I.e OA and As an are like an ATM now, while earning higher interests than most bank savings account rate).
For the same qn, any difference for a person who’s OA($0) and SA ($50,000 mandatory contribution + $10,000 RSTU) on the day of age 55.
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An extension of the posted qn. On the other hand, if a person has beyond ERS ($271,500) at age 55 and trust the CPF scheme a lot such that he wants to put max amt in the CPF LIFE.
Scenario: Say he has $300K in SA($150K) +OA($(150K) on the day of age 55, will
(1) all $300K will be transferred to the RA or
(2) CPF will transfer at most $271,500 to RA and make you withdraw the remaining $28,500 or
(3) CPF will transfer at most $271,500 to RA and balance $28,500 remains in your CPF (which account in this case).
Been searching through CPF website and can’t find an obvious answer.
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A slight correction, SA is capped at FRS, but mandatory contributions still can flow into SA beyond FRS. Only RA can go up to ERS level. But back to your question.
CPF will automatically create your new RA account with monies from your SA first, then OA up to FRS amount ($181,000). Thus Scenario (4) will apply:
(4) CPF will transfer $150,000 from your SA to RA, and $31,000 from your OA to RA.
New Balance: SA ($0), OA ($119,000), RA ($181,000).
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For withdrawals to be allowed at any time, FRS must be met in the RA. You are correct that as long as Uncle continues to work past 55, Employer/Employee contributions continue to flow in to his 3 accounts (OA, SA and MA). As long as FRS is met in RA, the excess in OA/SA can be withdrawn at any time.
No difference for a person with a different composition in his OA/SA account, as long as FRS is met in his RA.
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At age 65 we can withdraw 20pct of retirement account. What is the definition of the retirement ac. Is it based on:-
A) 176000d which i had reached the
minimum when i was 55y in 2019, or
B) the compounded interest of 176k earned
from 55y to 65y plus the min 176k.
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Your FRS is fixed for your cohort when you reach 55 years old. E.g. if you turn age 55 in 2019, your FRS will be fixed to FRS of $176,000 with your entire batch of 55ers. Only for each successive cohort of members turning age 55, the payouts need to be higher to account for long-term inflation and improvements in standard of living
Between 55 to 65, your RA account monies still earn the 4% interest annually. At age 65, your FRS still remain the same as you were at 55 – FRS of $176,000. Any
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Hi, I am also a mid 40s freelancer Singaporean who also already paid off my mortgage & topping up yearly $7000 to my retirement in order to meet the BRS of $116000 when I reached 55 years old. I will continue to top up my ordinary account if I have cash coming in subsequently.👍
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That’s a good strategy! For a relatively risk-free way of building up your retirement funds to earn a higher interest; it also helps in reducing the tax on your income earned.
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