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- Reaching 55
...Planning Your Golden Years


How much is the Minimum Sum?

Setting aside the Minimum Sum (MS) when you reach 55 ensures that you have some regular income from age 65 to live on in your retirement.

The MS 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 MS in cash, your property, bought with your CPF savings, will be automatically pledged for up to half of your MS.

55th birthday on or after MS
(in 2003 dollars)

MS
(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
$123,000
1 July 2011 $112,000
$131,000
1 July 2012 $113,000
$139,000
1 July 2013 $115,000
$148,000
1 July 2014 $117,500
$155,000
1 July 2015 $120,000
To be announced
For more information on Minimum Sum, click here

These are the ways in which the MS can be set aside:

1. Using your CPF balances in your Ordinary Account (OA) and Special Account (SA);
2. Pledging your property;
3. Receiving top-ups under the CPF MS Topping-Up Scheme.
   
   
1. Using your CPF balances in your OA and SA

When you reach age 55, a portion of your OA and SA savings will be transferred to your RA to meet the MS. If you have not met your MS, a portion of your new contributions, voluntary contributions, government top-ups and other refunds received after 55 will be used to top up your MS when you next withdraw your CPF.
   
2.

Pledging your property

You may pledge your property up to 50% of the MS after you have obtained the consent from all other co-owners to do so.

The amount that you can pledge depends on

  • HDB’s quarterly 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.

Upon the sale of the property, you will need to refund the principal CPF amount withdrawn towards the property plus the accrued interest as well as the pledged amount.

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

:$100,000

Residual value :

:$200,000

Co-owner's CPF usage :

:$ 40,000

Member's share :

:$ 100,000


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 $77,500 if his MS is $155,000 and he has fully set aside this amount in his RA.

 
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


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).

 
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


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.

    3. Top-ups received under the CPF MS Topping-Up Scheme

    You can make a top-up to your RA up to the current 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 drawdown age (terms and conditions apply).

    For more information on the CPF MS Topping-Up Scheme, please click here.


     

    How much can I withdraw?
    What can I do with the Minimum Sum?
    CPF LIFE
    Minimum Sum Scheme
    Medisave Minimum Sum
    What if I continue working after 55?
    What about my housing loan?
    What about my investments?

    What happens if I divorce?

    What happens if I am a bankrupt? 
    What if I am a pensioner? 

    When I am no longer around

    Moving forward
     Last Updated on: Monday, June 30, 2014 at 6:28 PM
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