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Setting aside the Minimum Sum when you reach 55 ensures that you have some regular income from age 65 to live on in your retirement.
The Minimum Sum was set at $80,000 in 2003 and will be raised gradually until it reaches $120,000 (in 2003 dollars) in 2015. These amounts will be adjusted yearly for inflation.
If you are unable to set aside your full Minimum Sum in cash, your property, bought with your CPF savings, will be automatically pledged for up to half of your Minimum Sum.
| 55th birthday on or after |
Minimum Sum
(in 2003 dollars)
|
Minimum Sum
(after adjustment for inflation)
|
| 1 July 2003 |
$80,000 |
$80,000 |
| 1 July 2004 |
$84,000 |
$84,500 |
| 1 July 2005 |
$88,000 |
$90,000 |
| 1 July 2006 |
$92,000 |
$94,600 |
| 1 July 2007 |
$96,000 |
$99,600 |
| 1 July 2008 |
$100,000 |
$106,000
|
| 1 July 2009 |
$104,000 |
$117,000
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| 1 July 2010 |
$108,000 |
$123,000 |
| 1 July 2011 |
$112,000 |
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| 1 July 2012 |
$113,000 |
$139,000 |
| 1 July 2013 |
} To be |
} To |
| 1 July 2014 |
} announced |
} be |
| 1 July 2015 |
$120,000 |
} announced |
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For more information on Minimum Sum, click here |
These are the ways in which the Minimum Sum (MS) can be set aside:
| 1. |
Using your CPF balances in your Ordinary and Special Accounts; |
| 2. |
Property pledge; |
| 3. |
Top-ups received under the CPF MS Topping-Up Scheme. |
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| 1. |
Using your CPF balances in your Ordinary and Special Accounts
When you reach age 55, a portion of your OA and SA savings will be transferred to your RA to meet the MS. If there is a still a MS shortfall in your Retirement Account, a portion of the new inflows like contributions, voluntary contributions, government top-ups and/or other refunds received after 55 will be used to make up the shortfall upon your subsequent CPF withdrawals. |
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| 2. |
Property pledge
You may pledge your property for up to 50% of the MS after you have obtained the consent from all other co-owners to do so. Based on current policy, when the property is sold or otherwise disposed of, you need to refund the MS deficiency, or the principal CPF withdrawn for the property plus the accrued interest, whichever is lower. The MS deficiency is the CPF MS applicable to you when you turn 55 less the balance in your Retirement Account (excluding the interest earned).
The amount that you can pledge depends on
- HDB’s quarterly average median resale prices for HDB flats or valuation price for private properties;
- Outstanding housing loan amount (including non-housing loan for private properties);
- Co-owner’s CPF usage (for joint-ownership cases); and
- Your share of the property.
Examples illustrating the amounts that can be pledged:
EXAMPLE 1
| Where the co-owner’s CPF usage is less than 50% of the residual value of the property |
HDB’s average valuation price |
:$300,000 |
Less outstanding HDB loan |
:$150,000 |
Residual value : |
:$150,000 |
Co-owner's CPF usage : |
:$ 40,000 |
Member's share : |
:$ 75,000 |
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In example 1 above, as the co-owner's CPF usage is less than 50% of the residual value, the member’s share of the property would be based on 50% (assuming that the property has only two owners with 50% share each) of the residual value. He can pledge the property up to the maximum limit of $69,500 if the Minimum Sum applicable to him is $139,000.
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| EXAMPLE 2 |
| Where the co-owner’s CPF usage is more than 50% of the residual value of the property |
HDB’s average valuation price |
:$300,000 |
Less outstanding HDB loan |
:$200,000 |
Residual value : |
:$100,000 |
Co-owner's CPF usage : |
:$ 80,000 |
Member's share : |
:$ 20,000 |
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In example 2 above, as the co-owner's CPF usage is greater than 50% of the residual value, the member's share of the property would be the residual value less the co-owner's CPF usage. The member can only pledge an amount of $20,000(i.e. $100,000 less $80,000).
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| EXAMPLE 3 |
| Where the co-owner did not use his CPF for the property and has 50% share ownership |
HDB’s average valuation price |
:$300,000 |
Less outstanding HDB loan |
:$250,000 |
Residual value : |
:$ 50,000 |
Co-owner's CPF usage : |
:$ 0 |
Member's share : |
:$ 25,000 |
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In example 3 above, as the co-owner did not use his CPF for the property and the member has 50% share of the property, the amount that the member can pledge is $25,000 only.
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| 3. |
Top-ups received under the CPF MS Topping-Up Scheme
You can make a top-up to your RA up to the prevailing MS, using cash and/or your CPF savings. The more savings you have in your RA, the higher the retirement income you may get from your Draw Down Age (terms and conditions apply).
For more information on the CPF MS Topping-Up Scheme, please click here. |
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