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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 2013. 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
|
| 1 July 2010 |
$108,000 |
} To be |
| 1 July 2011 |
$112,000 |
} announced |
| 1 July 2012 |
$116,000 |
} |
| 1 July 2013 |
$120,000 |
} |
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For more information on Minimum Sum, click here |
There are four ways in which you can set aside the Minimum Sum:
| 1. |
Cash |
| 2. |
Making a top-up to reduce shortfall |
| 3. |
Pledging your property |
| 4. |
Receiving top-ups under the CPF Minimum Sum Topping-Up Scheme |
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| 1. |
Cash
You may set aside the Minimum Sum of $117,000 fully in cash. The more cash savings you have for your Minimum Sum, the higher the retirement income you will get from your Draw Down Age. |
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| 2. |
Making a top-up to reduce shortfall
If you have not set aside your full Minimum Sum, you can voluntarily make a top-up to reduce your shortfall using cash or your CPF savings. You can apply to make a top-up to reduce the shortfall any time after 55. |
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| 3. |
Pledging your property
You must obtain consent from all co-owners of the property before you can pledge your property in lieu of part of your Minimum Sum. You may pledge your property up to 50% of the Minimum Sum. In the event that the property is sold or otherwise disposed of, you are required to refund the Minimum Sum deficiency, or the principal CPF withdrawn for the property plus the accrued interest*, whichever is lower. The Minimum Sum deficiency is the CPF Minimum Sum applicable to you when you turn age 55 less the balance in your Retirement Account (excluding the interest earned).
* If your principal pledged amount is higher than your CPF principal amount used plus accrued interest, you will be required to refund the Minimum Sum deficiency or the principal pledged amount, whichever is lower.
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 $58,500 if the Minimum Sum applicable to him is $117,000.
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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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