Singapore-based financial blog that aims to educate people on personal finance, investments, retirement and their Central Provident Fund (CPF) matters.

Thursday, 7 July 2016

Can I use my CPF to pay for my housing after 55?

We have got many readers asking us if they can utilise their CPF to pay for their homes after they reach the age of 55.
We have found the answer for you!

Answer: YES YOU CAN!

When you reach the age of 55, the money in your CPF Ordinary Account (OA) and Special Account (SA) gets transferred into a new CPF Retirement Account (RA).
2 points to note when using your CPF money to pay for your house after you reach age 55.

1) You may use the money in your Retirement Account in excess of your cohort's Basic Retirement Sum (BRS).
Eg; you turn 55 in year 2018. Your cohort's BRS is $85,500.
This means you can withdraw your RA savings above $85,500 to pay for your house.

Recommended Post: What is CPF Basic Retirement Sum?

2) You may use the money in your OA to pay for the remaining outstanding amount (or loan).
After setting aside money into your RA, if your OA still has money to cover your outstanding housing amount, it will be used to pay for it.
However, if there is insufficient balance in your OA currently, your monthly OA contribution will then be used to pay for the monthly installment for the housing loan.

Recommended Post: What if I can't meet my CPF Retirement Sum?

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  1. So if I prefer to use my OA funds for investing, I should invest them before turning 55, otherwise whatever amount in excess of BRS will be automatically used to pay for outstanding mortgage?

    1. Hi,

      Yes, you can consider investing your OA or SA money before you reach 55.
      Because after 55, the money in OA & SA will be transferred to your RA, which means it is harder to exceed the threshold to invest CPF money.

      However, if you have money in excess of the BRS in your CPF, it is not an automatic procedure for CPF to use the excess to pay up your mortgage loan.
      You will have to apply if you wish to use the money in excess of BRS.

      If you decided not to use the money in excess of BRS, you will continue to service your mortgage loan with your monthly CPF contributions.

      Or, you could before reaching the age of 55 (eg 54), inform CPF that you wish to retain part of your CPF OA money in your OA account to service your mortgage loan. This will prevent that portion of the money from being transfer over to your RA with you reach 55 years old.

      Hope this answers your question.
      Thank you for your support!
      Cheers! :)