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Deputy Prime Minister and Finance Minister Lawrence Wong announced at Budget 2023 that the minimum CPF monthly payout for members who are not on CPF LIFE, i.e. those on the Retirement Sum Scheme, will be raised from $250 to $350 per month. About 112,000 members are expected to benefit from this change from June 2023.
Besides the above, CPF Board will be introducing two additional measures in 2023 to enable more seniors to benefit from CPF monthly payouts in retirement. These measures will not change the rules for lump sum withdrawals and the amount members can withdraw from age 55.
(A) Automatic commencement of monthly payouts for all seniors, including those born before 1948
The fundamental purpose of CPF savings is to provide CPF members with monthly payouts in their retirement. CPF members can instruct CPF Board to start payouts from age 65. Prior to 2018, many members neglected to do so. Therefore, a change was introduced in 2018 where members who reached the age of 70 (i.e. cohorts born on or after 1948) would automatically receive payouts. This was positively received as the seamless process had allowed CPF members to enjoy their CPF savings which they had accumulated during their working years.
It is timely to extend this automatic commencement of monthly payouts to cohorts born before 1948. From June 2023, about 85,000 of them will start receiving payouts in their coming birth month in their personal bank account. They will be individually notified beforehand.
(B) Boosting CPF LIFE payouts with savings in the Ordinary and Special Account
Members who have started receiving their CPF LIFE payout may have received subsequent inflows to their Ordinary and Special Account (OSA). If they have not set aside their cohort Full Retirement Sum (FRS), such inflows may not be withdrawable in a lump sum and are meant to be streamed out as monthly payouts. These members currently need to instruct CPF Board to annuitise their OSA savings so that they may receive a higher CPF LIFE payout.
From October 2023, CPF Board will make it easier for such members to enjoy higher monthly CPF LIFE payouts. Any savings in their OSA which cannot be withdrawn in a lump sum will be automatically annuitised for higher CPF LIFE payouts and members will be individually notified prior to the annuitisation. This will enable about 7,000 members who are currently on CPF LIFE and many more in the future to have higher monthly payouts for life.
Members who have set aside their cohort FRS will not have their savings in the OSA automatically annuitised so that those savings remain withdrawable at any time.
Members can visit cpf.gov.sg/retirement-income to find out more on how they can benefit from their CPF monthly payouts.
For other CPF-related changes announced in the Budget, please visit cpf.gov.sg/budget 2023.