Withdrawals of CPF savings from 55 — How much can you withdraw from your CPF SA / OA / RA Scenarios

I wanted to strengthen my understanding as well as my readers’ on CPF lump sum withdrawal from age 55 after my last post on whether you can withdraw ALL excess money from your CPF SA / OA account after meeting FRS / BRS. Some questions got me thinking, but I thought that just thinking ain’t going to get me far in my understanding without playing out the various scenarios applicable with real numbers.

• How much can you withdraw from your SA/OA after setting aside FRS in your RA?
• How much can you withdraw from your RA if you pledge your property, thus setting aside BRS amount instead?
• Could you withdraw ALL the difference between FRS and BRS? Or some? Otherwise how come none in other scenarios?
• How is mandatory contribution (employer/employee) treated differently from OA to SA transfers and RSTU cash top-up? Or how similar are they treated in the calculation of RA withdrawal?

Theoretically, withdrawal of CPF savings from age 55 “is this simple” from the below table, found in the CPF website.

In reality, there are so many scenarios depending on your circumstances; some straightforward, others requiring more than a little logical thinking.

I spent a night of deep thoughts and broken them down into as many different scenarios I can think of, from the various combinations of without/with property pledge, meet/does not meet FRS, various contribution types (mandatory, OA to SA transfers, RSTU cash top ups) and amounts in the SA/OA savings.

Assuming prevailing FY2020 FRS of $181,000 and BRS of $90,500.

Without Property Pledge

The scenarios under no property pledge is straightforward enough; you are able to draw only from your SA/OA accounts and nothing from RA.

(First 9 columns): No matter how much SA/OA savings you have, you can only draw up to a maximum of $5,000 if you are unable to meet FRS in your RA and no property pledge done. The exception is if you have less than $5,000 in your SA/OA savings at 55; you can withdraw ALL of your monies which is between $1 to $5,000.

(Last 3 columns): If you meet FRS in your RA, you can withdraw the excess beyond FRS ($181,000), residing in your SA/OA savings.

How much RSTU cash top-ups done is not a factor here as there is no withdrawal from RA (with a property pledge).

With Property Pledge

We have discussed above how much you are able to draw only from your SA/OA accounts without doing property pledge. By pledging your property, you are able to withdraw a further $X amount up to a maximum of between FRS and BRS amount (up to $90,500).

You need to have minimally BRS amount ($90,500) in your RA account (which is created from your SA/OA savings) to be entitled to participate in the scheme. Thus in the examples in the table, age 55ers who have $4,000 or $10,000 which is less than BRS amount cannot pledge property.

Interests earned and top-ups under RSTU and government grants are not included in the calculations for how much monies you can withdraw from your RA.

If you do not meet FRS in your RA but still qualify to pledge property, the amount you are eligible to withdraw from RA must include the $5,000 that is eligible to withdraw from your SA/OA savings. In short, eligible withdrawal amount from RA:

If FRS is not met, withdrawal amount from RA is equals to Total SA/OA savings — RSTU Cash top-up — BRS amount — $5,000

If you meet FRS in your RA and pledge property, the amount you are eligible to withdraw from RA does not include the $5,000 in the calculation.

If FRS is met, withdrawal amount from RA is equals to Total SA/OA savings — RSTU Cash top-up — BRS amount

With Property Pledge — A closer look at how RSTU cash top-up affects eligible withdrawal amount from RA

For starters, OA to SA transfers are considered as the same category with mandatory contributions. This is why columns 1 & 2, as well as columns 4 & 5, have the same results or $X amounts when you play around with the figures.

If we look at column 3 and 6, whereby RSTU cash top-up forms a proportionately large amount of SA/OA savings, we find that the eligible $X from RA also falls when the formula is applied.

If FRS is not met, withdrawal amount from RA is equals to Total SA/OA savings — RSTU Cash top-up — BRS amount — $5,000

If FRS is met, withdrawal amount from RA is equals to Total SA/OA savings — RSTU Cash top-up — BRS amount

Conclusion

We know that OA to SA transfers is not considered under the calculation to derive eligible amount for withdrawal from RA, while RSTU cash top-up does affect. However, this should not deter your decision to continue contributing to your CPF SA for the following reasons:

• Enjoy up to $7,000 tax reliefs on an annual basis when you do RSTU cash top-up
• Build up your retirement account faster and also to enjoy the higher interest bearing SA account
• Increase your future CPF LIFE monthly payouts by indirectly building up your RA account