Central Provident Fund (CPF) members above the age of 55 now need to own a property that covers them until at least the age of 95 before they can withdraw their CPF monies above the Basic Retirement Sum.

This change was announced on May 9, 2019 in a joint statement released by the Ministry of National Development and the Ministry of Manpower.

CPF withdrawal from Retirement Account

Previously, CPF members needed to pledge a property with a remaining lease of at least 30 years if they choose to withdraw their Retirement Account savings above the Basic Retirement Sum.

Under the new changes, the property lease now needs to cover the CPF member until at least the age of 95.

What this means is that a CPF member at the age of 55 needs to pledge a property with at least 40 years of remaining lease should they wish to make the withdrawal.

According to MND and MOM, this change is to ensure that CPF members have secured both a home for retirement, as well as a basic level of retirement income.

Both ministries clarified that this change is not expected to affect most CPF members.

All HDB flats, as well as most private properties have leases that can last a 55-year-old member until they are 95.

Other changes to CPF policy

Previously, CPF members also needed to set aside the Basic Retirement Sum before excess Ordinary Account (OA) monies could be used to purchase a second or subsequent properties.

However, from May 10, 2019, CPF members who do not have a property bought using CPF monies that covers them until they are at least 95 will have to set aside the Full Retirement Sum before using excess OA monies to buy subsequent properties.

Those who have a property with a remaining lease until they are at least 95 will not be affected.

In addition, if a buyer aged 55 and above wants to use monies in the Retirement Account above the Basic Retirement Sum to pay for the property, the remaining lease of the property needs to cover a buyer until at least he or she is 95.

It is estimated that 98 per cent of HDB households and 99 per cent of private property households have a home that covers them to 95 years or beyond.

Top photo via CPF & gov.sg