CPF TRAP: NEED TO PLEDGE PROPERTY EVEN IF NO CPF USED?

If you are a part-owner of a HDB or private residential property – can you pledge your property to possibly withdraw more from your CPF at age 55, even if you have used very little of your CPF or no CPF for your property?

The answer is yes.

Here is an example to illustrate the above.

“If your CPF Balance at 55 is more than $85,500 but less than or equal to $166,000:

Date you reach 55 1 Jan 2016 to 31 Dec 2016

Full Retirement Sum (FRS) $161,000

Your Ordinary (OA) and Special Account (SA) balances when you reach 55 $100,000

At age 55, we will transfer $95,000 from your SA and OA to your Retirement Account (RA).

You can choose to leave this retirement sum in your RA and withdraw the amount of $5,000 remaining in your OA and/or SA.

Retirement sum in RA = $95,000 ($100,000 – $5,000)

CPF withdrawal amount from OA/SA = $5,000

If you own a property, you can choose to set aside the Basic Retirement Sum (BRS) of $80,500 in your RA.

You can then withdraw an additional $14,500 from your RA, provided you have sufficient charge/pledge on your property.

Retirement sum in RA (Cash) = $80,500

Property charge/pledge = $80,500

CPF withdrawal amount from OA/SA and RA = $5,000 + $14,500″

Leong Sze Hian

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