From 1st July, CPF members will not be allowed to withdraw any excess funds if they do not have a minimum of $155,000 in their Minimum Sum, and $43,500 in their Medisave Minimum Sum.
This will apply to CPF members who turn 55 between 1 July 2014 and 30 June 2015.
The news was released in a joint statement by the CPF and the Ministry of Manpower.
What is the CPF Minimum Sum?
The Ministry of Manpower says the CPF Minimum Sum Scheme aims to provide members with a monthly income to support a basic standard of living during their retirement.
CPF members can apply to commence their monthly payouts from their Retirement Account when they reach their applicable Draw Down Age.
The monthly payouts are designed to last for about 20 years, or until the member’s Retirement Account savings are exhausted.
The monies in the Retirement Account currently earns 4% interest per annum. The interest rate is reviewed yearly.
Upon reaching 55 years old, members are able to withdraw the portion of their CPF savings in excess of the Minimum Sum.
This allows members to use their savings to meet their financial needs at 55 years of age, while ensuring they also have some regular income to live on in their retirement.
Members have the option to start their monthly payouts later, in order to make their payouts last longer.
In addition, members may participate in CPF LIFE or buy approved life annuities with their Minimum Sum to give them a guaranteed income for life.
Alternatively, they may place their savings with approved banks or continue to keep it with the CPF Board.
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