Cannot Withdraw CPF Money If Never Hit CPF Retirement Sum?

Today, we would like to share with you an important issue we believe every Singaporean faces: What happens if I cannot hit my CPF Retirement Sum?

Answer: NOTHING HAPPENS!

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Recommended Read: Answering the 2 Common CPF "Complaints"

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Seriously, Nothing

Do not worry. 

If you do not hit the Retirement Sum (FRS, BRS, or ERS), there is no penalty involved.

You are also not required to top up the difference to CPF in the event you do not hit the Retirement Sum.

Yes! You are correct! 

It is not compulsory for you to hit your CPF Retirement Sum.

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You Still Get A Monthly Payout

Whether you hit it or not, you would still draw a monthly payout from CPF when you reach your draw down age (age 65). 

You will just receive a lower money payout from CPF.

Well, less money in Retirement Sum = Lower Monthly Payouts.

Make sense right? 🤷‍♂️

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Recommended Read: The CPF Bond That You Cannot Sell

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But The Lump Sum Withdrawal

The only problem is that you are unable to withdraw most of your money in your Retirement Account - you can only withdraw up to $5,000 at age 55.

For members turning age 65 from 2023 onwards, they can also withdraw up to 20% of their Retirement Account savings in a lump sum anytime from age 65 onwards.

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If I Want To Withdraw More Money?

You can pledge your property to withdraw money in excess of the Basic Retirement Sum (BRS).

The BRS as of 2020 is set at $90,500.

If you pledge your property at age 55, you will be able to withdraw money in your CPF in excess of the BRS.

Eg: if you have $100,000 in your Retirement Account (RA) as of August 2020, you can withdraw up to $9,500 from your RA if you pledge your property to CPF.

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Conclusion

Don't fret over hitting the Retirement Sum.

It is not the end of the world if you don't hit it.

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Recommended Read: Why You Should Max Your CPF Retirement Sum Early

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