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04 Jun 2021 
SOURCE: Seedly

​​If there’s one thing Singaporeans are good at – it’ll be being kaypoh(read: a busybody).

​More like most Singaporeans actually…


Even though the Central Provident Fund (CPF) is something that most of us have, as with all personal finance topics, it is still something that is not widely discussed.


But that doesn’t diminish our interest in how other people handle their personal finance.​


With all the talk on CPF Retirement Sumshow much we need to earn to reach it, hacks to maximise CPF interest rates, or the popular 1M65 (or 4M65) strategy, using CPF as our retirement fund is definitely part of the plan for most Singaporeans.


So how are Singaporeans REALLY using their CPF money after 55 years old?​


TL;DR: What CPF Members Are Doing With Their Cash Withdrawals After Age 55


CPF conducts a Retirement and Health Study (RHS) which is a survey of Singapore residents’ retirement and healthcare needs.


This study was published in 2018, where the results were based on the data that has been received from 7,200 respondents aged 55 to 70.


The results are as follows:

  • About 4 in 10 did not make withdrawals after turning 55 years old

  • For those who did withdraw from their CPF between 55 to 70 years old, the funds were mainly used for:

    • Left in savings accounts of financial institutions with no specific use

    • Paying for immediate expenditure needs

    • Big-ticket items, such as holidays or home renovations


4 in 10 Did Not Make Withdrawals After Turning 55 Years Old


Are you planning to withdraw your CPF money after you turn 55?


If you’re not, you belong to 40% of the crowd.


For the uninitiated, when you turn 55, you can withdraw:


  • $5,000 or your Ordinary and Special Account savings above the Full Retirement Sum, whichever is higher



  • Any Retirement Account savings (excluding top-up monies, government grants, and interest earned) above the Basic Retirement Sum as long as you own a property.


About 4 in 10 of those who were interviewed did not make any withdrawals after turning 55 years old.


This is mainly due to these individuals having no immediate need for these funds, and therefore leaving it in the account to accumulate interest.


As we know, at 55 years old, the ability to take investment risks d​ecreases significantly.

Table suggesting the risk you can take when investing based on the amount of savings you have at different life stages.

Therefore, having guaranteed risk-free 2.5 to 4% returns is not something that can be found easily elsewhere.


As such, it is a good method to keep the monies in your CPF account to let the interest keep rolling even further, for as long as you can afford to.

Common Uses of CPF Cash Withdrawals after Age 55

 Chart on what people do with their CPF monies after withdrawing it from age 55.

 Source: C​PF

1) Leaving It in a Savings Account

Seedly mascot holding a piggy bank reflecting majority of CPF members leaving withdrawals in savings account.

More than half of those who have withdrawn their savings are leaving it in a savings account at financial institutions.


The median amount deposited was about $8,000.


With these individuals storing their funds in a savings account, this suggests that these funds are not used for their immediate needs as well.


Such behaviour might be due to the perception of the money being more liquid in these savings account, even though CPF withdrawals can be received within a day through PayNow.


In addition, interest rates provided by the CPF are higher than these savings account rates as well.


So if we do have our loved ones who are looking to do this to their CPF money, let’s encourage them to leave it in their CPF accounts to get higher interest rates instead!

2) Paying for Immediate Needs

A stickman tugging a sack of money into a building reflecting CPF members commonly using withdrawals to pay for immediate expenditure like loans and bills.

The next most common use for CPF withdrawals is on immediate expenditure needs, which includes household expenses (27%) or loans (13%).


They average about $5,000 and $6,000 respectively.


This group of people also have more children as compared to other groups, where some have used their withdrawal to fund their children’s education.


It was also noted that a relatively higher proportion of individuals from this group had poorer health, which might translate to these withdrawn CPF funds being used for medical bills and expenses.


While we have health policies such as MediShield Life and CareShield Life in place to cushion our medical expenses…


This reminds us of the importance to create a buffer for medical emergencies, especially how a health crisis could easily disrupt our retirement plans.

3) Spending on Big-Ticket Items


Are you someone who started planning for retirement early so that you can spend your retirement years satisfying your wanderlust?


About 20% of the respondents have withdrawn their CPF money to spend it on big-ticket items, which includes holidays and home renovations.


The median amount spent on these purposes average at $5,000 and $10,000 respectively.


Most of those who belong to this group were still employed when they were surveyed, and some of them viewed this sum of CPF money as additional funds that could be spent on items that could benefit them and their loved ones.


Something like collecting a bonus gift for crossing that 55-year-old mark.


Will I Ever Have Enough In My CPF Account To Withdraw My Money at Age 55?


A lot of us have the worry of not having enough in our CPF account for it to be withdrawn when we reach the eligible age.


Fret not, because there are now various ways (many that we’ve covered) to maximise the advantages of CPF and grow our retirement fund!


Some of them would include:

  1. Transferring money from​​ your Ordinary Account to Special Account​ as early as possible
  2. Keep $20,000 in your Ordinary Account instead of wiping it all out when you purchase your first flat
  3. Top up your Special Account (SA) with cash
  4. Invest your OA money with CPFIS (CPF Investment Scheme)

If you’re interested in other CPF tips and tricks, you should probably check this out before it’s too late…​


This article was first published on Seedly.​


Information in this article is accurate as at the date of publication.