CPF & YOU
I refer to the newspaper advertisement CPF & YOU – “Can we still use our CPF monies to service our housing loans after we turn 55?”
Can use for housing after 55?
“Yes … any amount above half the Minimum Sum in your Retirement Account can be used for your housing needs”
How many have half of Minimum Sum?
So, perhaps the key statistic to ask is how many Singaporeans who turned 55 last or earlier have more than half the Minimum Sum?
For those who turned 55 this year, half the Minimum Sum is $77,500.
I estimate the number who have at least half the Minimum Sum to be only about 30 per cent of all those who reach 55. (“Parliament: CPF replies that throw up more questions? (part 1)“, Jul 8)
70% cannot use CPF for housing after 55?
Hence, does it mean that about 70 per cent cannnot use their CPF after 55 to service their housing needs?
Above half of Minimum Sum can use?
As to ”And if you continue working after 55, as most do, you can also use your new Ordinary Account contributions for your housing loans” – is this not also subject to the requirement that one must have at least half the Minimum Sum first?
How many servicing housing loans after 55?
Perhaps the $64,000 question that I believe nobody has ever asked is “How many Singaporeans above 55 are still servicing their housing loans and are unable to use their CPF because they do not have more than half the Minimum Sum in their Retirement Account?
At age 65 – full Minimum Sum transferred to CPF Life pool?
Moreover, since under the CPF Life default Standard Plan – “One to two months before your drawdown age (DDA) (age 65), we will deduct the rest of your RA savings as the second instalment of your annuity premium” (the first half of your Minimum Sum was deducted at age 55 for your annuity premium) – does it mean that only CPF money above the entire Minimum Sum (currently $155,000 for this year’s cohort) can be used or housing after 65?
And accordingly, how many Singaporeans are expected to have the full Minimum Sum at age 65 in the future, so that they can continue to use their CPF for housing after 65?
Downgraders and flat buyers beware?
If you are downgrading or buying a flat after age 55 or 65, you must factor in the above – that half the Minimum Sum after age 55, and the full Minimum Sum after 65 has to be set aside before any excess can be used for housing.
Leong Sze Hian
P.S. Come with your family and friends to the National Day protest on 9 August 12 pm to 6.00 pm at Speakers’ Corner https://www.facebook.com/events/271583499702725/