Turning 65 is a milestone age for most Singaporeans as it marks the payout eligibility age when we are eligible to start receiving our monthly CPF Life payouts. This is different from the statutory retirement age, which is currently 63 and set to increase to 64 by 1 July 2026, which determines the minimum age our employers can ask us to retire.
While we have previously written about how much cash we can withdraw at ages 55 and 65, being able to withdraw is not the only change to our CPF accounts when we reach 65.
Read Also: How Much Cash You Can Withdraw In Lump Sum From Your CPF Account At Age 65?
#1 We Can Start Or Defer CPF LIFE Payout
Possibly the most important decision we need to make regarding our CPF account when we turn 65 is whether to start or defer our CPF Life payout.
While we are eligible to start our CPF LIFE payouts at 65, we can start anytime between 65 and 70. By delaying the start of our payouts, we allow our CPF monies to compound further and increase our eventual payouts. This deferment can increase our payouts by up to 7% for each year deferred. If we are working or do not need the funds immediately at age 65 for daily expenses, this is a good option to compound our retirement savings.
Read Also: How Much More CPF LIFE Monthly Payouts Would You Receive If You Deferred Till 70
#2 Monies in Our Ordinary Account (OA) And Special Account (SA) Will Be Transferred Over To Our Retirement Account (RA) For A Second Time
At age 55, our Retirement Account (RA) is created, and savings from our SA and OA, up to the Full Retirement Sum (FRS), will be transferred to our RA. Our SA will also close at age 55.
If we were born in 1958 or later, by the time we turn 65 and are eligible for payouts, there will be another transfer from our OA to our RA if our RA savings are less than our FRS. This transfer would be up to the amount of our cohort’s FRS and would enable us to receive higher monthly CPF payouts.
For members turning 65 from 2026, the second transfer of OA savings to RA will occur when we start monthly payouts, rather than when we are eligible to start payouts at 65. If we choose to defer our payouts, the transfer will be deferred until payouts begin.
Read Also: What Happens To Your CPF Monies After Transferring It To Your Retirement Account (RA) At Age 55?
#3 Monies In Our Retirement Account Is Used To Pay Our CPF LIFE Premium
When we start our CPF Life payouts, be it at 65 or after, the monies in our RA would be used to pay for our CPF premiums.
For those of us who choose to join CPF Life on the Standard or Escalating Plan, the full amount in our RA would be used as our CPF Life premium. Under the Standard or Escalating Plan, our CPF LIFE monthly payouts will first be paid from our CPF LIFE premium. Once our CPF LIFE premium is exhausted, we will continue to receive monthly payouts for the rest of our lives. This is possible through risk pooling, where the interest accumulated by all CPF Life members is sufficient to sustain monthly payouts for those who live beyond their premiums.
For those of us who choose to join CPF Life on the Basic Plan, about 10-20% of our RA savings will be deducted as the CPF Life premium. Under the Basic Plan, our monthly payout will be made first from our RA and is estimated to last until 90. After our RA is depleted, monthly payouts will be paid from our CPF LIFE premium. Thereafter, like those who joined under the Standard or Escalating Plan, we will continue to receive monthly payouts for the rest of our lives, even after our CPF Life premium is depleted.
Read Also: CPF LIFE Standard, Basic Or Escalating Plan. Which CPF LIFE Plans Should You Choose?
#4 We Continue To Earn Interest On Our CPF LIFE Premium
Unlike most other insurance policies, our CPF Life premium continues to earn interest in addition to providing monthly CPF Life payouts.
Not only do we earn the base 4% p.a. interest on our CPF Life premium (the same rate as our Retirement Account savings), but our CPF LIFE premium also counts towards the extra 1% p.a. interest on the first $60,000 of our combined CPF balances, as well as the additional 1% p.a. interest on the first $30,000 of our combined CPF balances.
This means if we grow our RA savings (and eventual CPF Life premium) by either topping up or deferring our payout, we not only stand to gain from the higher monthly payouts but also earn additional interest.
Read Also: What Happens To The Interest On Your CPF Balances After Setting Aside Your Retirement Sum At 55?
#5 We Can Withdraw Up To 20% Of Our Retirement Account Savings At 65
Finally, regardless of whether we defer our CPF Life payout, we can withdraw up to 20% of our Retirement Account (RA) savings at age 65. This includes the first $5,000 that can be withdrawn from age 55. This applies to all members who were born in 1958 or later.
If we were born in 1957, meaning we turned 55 in 2012 and will turn 65 in 2022, we can withdraw only a further 10% of the savings in our Retirement Account. This is because such members already had the option to withdraw up to 10% of their Ordinary Account and Special Account balances at age 55.
If we were born in 1956 or earlier, which means we turned 55 before 2012, we cannot withdraw any additional CPF savings when we turn 65. This is because such members already had the option to withdraw up to 20% of their Ordinary Account and Special Account balances at age 55.
However, we don’t have to take the option to withdraw. If we choose to keep our RA savings, let them continue to accumulate interest, and use them as our CPF Life premium, we would receive a higher CPF Life payout that continues for life.
Read Also: 12 Little-Known Things About CPF That Most Singaporeans Are Still Unaware About
