CPF – The truth is your property is automatically pledged if you cannot meet Minimum Sum Amount at age 55.

CPF Board & MOM had been putting up advertisements on matters relating to CPF.

I quote the following from an advert in today’s Straits Times:

“Q: What happens if I don’t have enough to meet the Minimum Sum? Am I expected to top-up the shortfall?

A: If your CPF savings are below your Minimum Sum at age 55:

  • You do not need to top up the shortfall in cash
  • You do not need to sell your property just to make the shortfall
  • You will continue to get monthly payouts from age 65”

This is not the Full picture. The CPF in their website states:

“Your property, which you had purchased using your CPF savings, was automatically pledged for part of your Minimum Sum when you reached 55 as you were not able to set aside the required Minimum Sum in cash.”

My comments:

This property pledge will have to be accounted for with CPF Board once you sell your property or transfer your property. Simply put, property sale proceed will flow to Retirement Account (RA) up to the pledged amount in the Minimum Sum.

So long if the property is still held for staying in until death, the earlier paragraph will not happen. (I would think majority Singaporeans own one property for staying in.)

The member’s monthly payout from the Retirement Account at age 65 will be lower than $1,200 per month if the full amount of the Minimum Sum ($155,000) is not in cash (ie the property pledge portion will not yield monthly cash payout).

So this is the actual scenario and the advertisement glossed over this fact.

Today’s advertisement by CPF Board in the Straits Times cover this part. (Dated 18 July)

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