In Singapore, turning 55 is a key milestone that many Singaporeans look forward to. CPF members will have their CPF Retirement Account created and their Special Account closed, as well as mark the first time they can withdraw a portion of their CPF monies in cash.
As you probably know, you can (but don’t have to) withdraw at least $5,000 when you turn 55, regardless of the balances you have in your CPF Ordinary Account and Special Account.
Beyond that, you are only able to withdraw money after you’ve set aside the Full Retirement Sum (FRS), which is $220,400 for those turning 55 in 2026.
Read Also: Here’s What Your CPF Full Retirement Sum Might Look Like When You’re 55
However, you also have the option of just setting aside half that amount, also known as the Basic Retirement Sum (BRS), which is $110,200 for those turning 55 in 2026, if you pledge a property you own.
In this article, we will explain the implications of pledging your property and what you should consider before doing so.
Read Also: Turning 55? Here’s What You Should Consider When Planning Your CPF Withdrawals
Can You Pledge Your Property To Meet The CPF Basic Retirement Sum?
When you’re turning 55, you’ll be sent a set of documents and forms regarding CPF, and you’ll need to indicate if you’d like to set aside the Basic, Full or Enhanced Retirement Sum. If you choose the Basic Retirement Sum, you’ll need to pledge a property you own or have sufficient property charge.
If you co-own the property with someone, you can only pledge up to your share of the property value. Today, your share of the pledged property must be worth at least $110,200 since the purpose of the property pledge is to ensure your assets can help you meet the Full Retirement Sum (FRS).
Also, the property needs to have more than 40 years of lease remaining (i.e. it will last you till age 95) – this can include studio apartments and flats bought under the short-lease 2-room Flexi scheme. However, HDB flats that have undergone a lease buyback are ineligible for pledging.
Read Also: HDB Lease Buyback Scheme Now Open To All Flats: Here’s How It Works
What Happens When You Pledge Your Property?
One misconception of property pledging is that CPF or the government suddenly owns part of your home. This is untrue. Pledging does not change property ownership in any way, and you’re still able to sell or rent out your home as usual.
The only thing that happens when you’ve pledged your property is that if you do sell your property, the pledged amount will be returned to your CPF account, along with the CPF monies (and accrued interest) you used to pay for the property over the years.
In the event that the proceeds of selling your property at market value or higher fall short of the monies you need to refund to your CPF, you do not need to make up the shortfall.
Read Also: Accrued Interest VS Property Charge VS Property Pledge: What Are The Differences?
Withdrawing More Money Sounds Good. Should Everyone Pledge Their Property?
By pledging your property and only keeping the Basic Retirement Sum (BRS) in your Retirement Account instead of the FRS, you’ll receive significantly lower CPF LIFE payouts. You may only feel the effects of this when you start your CPF LIFE payouts 10 years into the future at age 65, or up to 70 if you choose to defer receiving payouts.
You can use the CPF LIFE payout estimator calculator to gauge how much lower you’ll be receiving if you choose to set aside the BRS by pledging your property and withdrawing more of your CPF in cash at 55.
To illustrate, CPF members who turn 55 in 2026 will receive around $1,780 in monthly payouts for life if they set aside the Full Retirement Sum (of $220,400) and are on the Standard Plan.
In contrast, the same CPF members would receive only around $950 for life if they pledged their property and set aside only the Basic Retirement Sum.
Obviously, $950 is barely adequate for your retirement needs, unless you’re willing and able to make drastic lifestyle changes or have other sources of retirement income. When you choose to pledge your property and withdraw a larger sum of money from your CPF, the onus is now on you to wisely manage that money and protect your retirement adequacy.
Read Also: How Much Should I Have In Savings And CPF To Have A Comfortable Retirement?
Blowing all that money on a round-the-world trip may not be the wisest decision, unless you have other means for taking care of your future retirement needs.
Another point to consider is that keeping the Full Retirement Sum (FRS) would allow you to enjoy higher CPF LIFE payouts for life. Even if you were amazing at managing your money, there’s no guarantee that the $110,200 in additional cash you take out from your CPF earlier would give you a better quality of life, especially if you factor in your later years.
Read Also: Retirement Planning In Singapore: How Much Do I Need To Save And Invest To Retire At Age 55?
