CPF Retirement Account

Title: Understanding the CPF Retirement Account: Securing a Comfortable Retirement in Singapore


Retirement planning is an essential aspect of every individual’s financial journey. In Singapore, the Central Provident Fund (CPF) plays a pivotal role in ensuring citizens’ retirement adequacy. The CPF Retirement Account (RA) is a key component of the CPF system, designed to provide Singaporeans with a stable and secure source of income during their golden years. This article aims to shed light on the CPF Retirement Account and its significance in Singapore’s retirement landscape.

What is the CPF Retirement Account?

The CPF Retirement Account is a dedicated savings account within the CPF system that is established for CPF members when they turn 55 years old. It serves as a vehicle to accumulate and set aside funds specifically for retirement needs. The funds in the Retirement Account cannot be withdrawn in a lump sum but are used to provide monthly payouts, ensuring a steady stream of income during retirement.

Accumulating Savings in the CPF Retirement Account

To build up their CPF Retirement Account, CPF members are required to set aside a portion of their CPF savings, which includes their CPF Ordinary Account (OA) and Special Account (SA). From the age of 55, members are mandated to transfer the savings above their Full Retirement Sum (FRS) from the OA and SA into the Retirement Account.

The FRS is the minimum sum required in the Retirement Account to meet basic retirement needs. As of 2021, the FRS stands at SGD 186,000. CPF members who have property pledges or own a property with sufficient value can also choose to meet the Basic Retirement Sum (BRS) or the Enhanced Retirement Sum (ERS), which are lower and higher than the FRS, respectively.

CPF members can accumulate savings in their CPF accounts through regular monthly contributions from their wages, as well as through voluntary top-ups and the compounding interest earned on their CPF balances. The CPF system provides a competitive interest rate, ensuring the growth of CPF savings over time.

Monthly Payouts and Retirement Income

Upon reaching the eligibility age for CPF payouts, which is currently set at 65 years old, CPF members can start receiving monthly payouts from their CPF Retirement Account. The payout eligibility age is planned to be increased gradually to 70 by 2030, to account for increasing life expectancies.

The monthly payouts from the CPF Retirement Account provide a stable income stream, supplementing other sources of retirement income such as personal savings, investments, and government assistance schemes like the Singaporean government’s Silver Support Scheme. The amount of the monthly payout is determined by the CPF member’s Retirement Account balance and chosen CPF Life plan.

CPF Life Scheme

CPF members have the option to select their CPF Life plan, which is the annuity scheme that provides monthly payouts for life. The CPF Life scheme offers several plan options, including the Standard Plan, Basic Plan, and escalating payout options. The plan chosen determines the amount of monthly payout and whether there will be an increasing payout over time to cope with inflation.

The CPF Life scheme is designed to ensure that Singaporeans have a basic level of lifelong income security in retirement. The payouts are adjusted periodically to account for changes in life expectancy and investment returns, providing sustainable retirement income.

Flexibility and Additional Withdrawals

While the funds in the CPF Retirement Account cannot be withdrawn in a lump sum, CPF members still have flexibility in managing their retirement savings. They can choose to withdraw a portion of their CPF savings from the OA and SA after meeting the Basic Retirement Sum, subject to certain conditions and limits.

Additionally, CPF members have the option to participate in the CPF Investment Scheme (CPFIS) and invest their CPF OA and SA savings to potentially earn higher returns. These investment options include various financial instruments such as stocks, bonds, unit trusts, and real estate.