CPF: Your Assurance in Retirement

Transcription

1 CPF: Your Assurance in 1

2 Reaching 55 At 55, it s time to make your next move CONTENTS 02 Introduction 03 Decisions to be made: How much monthly payouts do you need during retirement? How much can you withdraw at 55? How to withdraw? Should you continue to save with CPF? Should you join CPF LIFE? Which CPF LIFE plan should you choose? 12 Top up for tax savings and earn higher interest 14 CPF beyond Conclusion 17 Annex A Case Studies 20 Annex B CPF Investment Scheme and CPF Education Scheme 21 Glossary Important Terms and Figures 23 Notes The information in this publication applies to members turning 55 from 1 July 2015 to 31 December

3 Introduction Remember three key points: 1 Make an informed decision on your desired payouts. 2 Join CPF LIFE to enjoy lifelong monthly payouts. In the lead up to your retirement years, you may have questions about how your CPF will provide for your retirement needs. When you reach the milestone age of 55 in your CPF journey, two events take place: A is created to set aside your retirement sum, which will provide you with a monthly income in old age. You can withdraw a portion of your CPF savings if you so choose. While withdrawal is an option open to you, you should consider stretching the value of your CPF savings by keeping it in your accounts so that there will be more retirement savings in your golden years. Apart from the attractive interest rates earned in your CPF accounts, you can make regular top-ups to your CPF to boost your retirement savings. Let your total CPF savings count towards a proportion of your overall retirement provisions. Singaporeans are living longer. It is an increasing concern that present retirement funds may not be enough to last throughout retirement. About half of Singaporeans who are 65 years old today are expected to live beyond the age of 85 and a third of them will live beyond 90 years old. Having an income throughout old age is more important than ever. To ensure you have a monthly income for as long as you live, you can use your savings to join the CPF Lifelong Income For the Elderly (CPF LIFE) scheme. 3 TOP UP your and your loved ones retirement savings. 2

4 How much monthly payouts do you need during retirement? When you turn 55 years old, we will create your and transfer some of your CPF savings from your Special and/or Ordinary into this account to form your retirement sum. You can buy a CPF LIFE annuity using your retirement sum to receive lifelong monthly payouts from your payout eligibility age, which is currently at age 65. Depending on your desired CPF LIFE monthly payout and your CPF balances, you can choose from a range of payout options that best suit your needs in retirement. Your monthly payout 1 for life from 65 savings required at 55 If you own a property and choose to pledge your property. If you do not own a property or choose not to pledge your property. If you wish to put more savings in CPF LIFE. $660 - $720 Basic Sum (BRS) $80,500 $1,220 - $1,320 Full Sum (FRS) $161,000 The FRS is 2 x BRS. $1,770 - $1,920 Enhanced Sum (ERS) 2 $241,500 The ERS is 3 x BRS. To help you plan early for retirement, the Basic Sum will be made known to you ahead of time. For each successive cohort of members turning 55, payouts need to be higher to account for long term infl ation and rising standards of living. Correspondingly, the Basic Sum to be set aside has to increase. AGE 55 IN 2016 AGE 55 IN 2017 AGE 55 IN 2018 AGE 55 IN 2019 AGE 55 IN 2020 BASIC MONTHLY PAYOUT 1 FOR LIFE FROM 65 $660 - $720 $680 - $740 $700 - $760 $720 - $780 $740 - $800 Basic Sum $80,500 $83,000 $85,500 $88,000 $90,500 1 Payouts are estimates based on CPF LIFE Standard Plan parameters in Available from January

5 OA + SA+ MA How much can you withdraw at 55? To calculate how much you can withdraw, you need to fi rst work out your X and Y as shown below. $43,500 X X = Ordinary + Special + Medisave savings above $43,500 Ordinary Special Medisave Y Y = Medisave savings up to the Medisave Minimum Sum of $43,500 X You can withdraw What does this mean? X < $5,000 X You can withdraw all of your X. Y stays in your Medisave. $5,000 < X < $166,000 $5,000 If you have savings above the Basic Sum of $80,500, you can choose to withdraw the amount by pledging your property. You can withdraw $5,000 from your Ordinary and Special s. The remainder will form your retirement sum in your. Y stays in your Medisave. X > $166,000 X - $161,000 - Medisave Minimum Sum shortfall If you have savings above the Basic Sum of $80,500, you can choose to withdraw the amount by pledging your property. You can withdraw $5,000 and any excess CPF savings after setting aside the Full Sum of $161,000 and the current Medisave Minimum Sum of $43,500. Y stays in your Medisave. 4

6 Here s an example on how much a typical CPF member can withdraw. Ms Anita has just turned 55. A is created on her 55 th birthday. Ms Anita s X is between $5,000 and $166,000. X = $45,000 + $55,000 = $100,000 Ms Anita can choose to withdraw $5,000 of her CPF savings from her Ordinary and Special s. The remaining amount of $95,000 will form her retirement sum in her. If she owns a property, she can choose to set aside her Basic Sum of $80,500 in her to receive a monthly basic payout of $660 to $720 from age 65 for life. She can then withdraw $5,000 from her Ordinary and Special s, and an additional $14,500 from her by pledging her property. 5

7 How to withdraw? You will receive a letter from us a few months before your 55 th birthday. You can apply to withdraw your CPF once you receive the letter or any time later. Ways to apply for withdrawal Option 1: Online application Apply online at You will need your SingPass and a OCBC, POSB or UOB account. Option 2: Form application Send us your application using the form (RWD-55) enclosed with the letter. Complete the application form and mail to: CPF Board Withdrawals Department 79 Robinson Road Singapore

8 Earn Attractive Interest Should you continue to save with CPF? Withdrawing your CPF savings once you turn 55 years old is not compulsory. Tip 1 You can still make a withdrawal later! If you do not withdraw your CPF savings at 55 years old, you can still make a withdrawal at a later date. Also, you do not have to take out the full amount at one go. You can make a partial withdrawal and save the remaining money for your next withdrawal. For example, if you can withdraw $5,000, you can choose to withdraw $2,000 which would leave you $3,000 for your next withdrawal. Tip 2 Earn attractive interest! Your CPF savings can continue to grow with the attractive interest earned in your accounts, if you choose not to make a withdrawal at 55 years old. Your CPF accounts currently earn up to 5% interest per year 3. Members with lower CPF balances can earn up to 6% interest per year 4. Age 55 and above (NEW) CPF Balances Interest Rate 5 First $30,000 6% Next $30,000 5% Amounts above $60,000 4% Tip 3 You can still use your Ordinary savings to pay your housing loan! If you need to continue using your Ordinary for your housing payments after age 55, you may apply to set aside some Ordinary savings for this purpose before they are transferred to your. However, this means you will set aside a lower retirement sum. 3 Currently, your CPF savings in the Ordinary earn a guaranteed interest rate of 2.5% per year, while savings in the Special, Medisave and s earn guaranteed interest rates of 4% per year. The fi rst $60,000 of your combined CPF balances, of which up to $20,000 from your Ordinary, earns an extra 1% interest per year. Combined balances refer to the total balances in your Ordinary, Special, Medisave and s, including the annuity premiums for CPF LIFE less any payouts made. 4 With effect from January 2016, an additional extra interest of 1% per year will be given on the fi rst $30,000 of your combined CPF balances (for members aged 55 and above). This is on top of the existing 1% extra interest on the fi rst $60,000 of balance. 5 Based on prevailing interest rates on balances in Special, Medisave and s. Balances in Ordinary can earn up to 4.5% for members aged 55 and above. 7

9 Golden Years Should you join CPF LIFE? With CPF LIFE, you will have the assurance of receiving monthly payouts from your payout eligibility age for as long as you live. You will be placed on CPF LIFE if you are a Singapore Citizen or Permanent Resident born in 1958 or after, and have at least: (i) $40,000 in your when you reach 55 years old; or (ii) $60,000 in your when you reach 65 years old. If you are not placed on CPF LIFE, you can apply to join CPF LIFE or remain on the Sum Scheme, which provides you with a monthly payout for about 20 years. Choose your CPF LIFE plan We will invite you to choose your CPF LIFE plan nearer to your payout eligibility age. You can choose between: CPF LIFE Standard Plan; or CPF LIFE Basic Plan Choose the plan that best meets your retirement needs. Each CPF LIFE plan provides a different combination of trade-offs between the amount of monthly payouts that you will receive and the bequest that you will leave for your benefi ciaries. If you do not choose a plan before your 70 th birthday, we will automatically place you on the CPF LIFE Standard Plan. The CPF LIFE annuity premium will be deducted from your at the point of policy issuance. 8

10 If you choose the CPF LIFE Standard Plan We will deduct the entire savings in your as the annuity premium at the point of policy issuance. You are eligible to receive monthly payouts from your payout eligibility age for as long as you live. If you choose the CPF LIFE Basic Plan We will deduct a portion of your savings for the annuity premium at the point of policy issuance. The actual amount deducted will depend on your age and gender. We will inform you on the amount to be deducted when your policy is issued. The rest of your savings will stay in your. You will receive monthly payouts from your until one month before you reach 90 years old. Once you reach 90 years old, you will continue to receive monthly payouts from the annuity fund for as long as you live. I n f o r m a t i o n B o x From 1 January 2016, you will have more fl exibility to plan for your retirement. 1. You have the option to start your payouts later, up to age 70. For each year deferred, your monthly payouts permanently increase by about 6% - 7%. example Basic Sum at 55 years old: $80,500. This grows to about $125,000 6 at 65 years old. Joins CPF LIFE with entire balance. Option A Starts CPF LIFE payout at 65 years old. Monthly payout for life of about $660 - $ Option B Defers payout start age to 70 years old. Monthly payout for life increases to about $885 - $ If you turned 55 from 2013, you have the option to withdraw up to 20% of your savings from 65 years old (includes the fi rst $5,000 withdrawable from age 55). 6 Based on CPF interest rates of up to 6% per year for members aged 55 and above from Payouts are estimates based on CPF LIFE Standard Plan parameters in

11 Receiving your CPF LIFE payout We will pay the monthly payout in your bank account using Inter-Bank GIRO (IBG) by the 4 th working day of each month. If the IBG is unsuccessful because you have closed your bank account, we will pay the payouts into your Ordinary. Benefitting from CPF LIFE with the LIFE Bonus You can receive a LIFE Bonus of between $1,450 and $2,600 if you are a Singapore Citizen with at least $20,000 in your and have either: (i) Been placed on CPF LIFE; or (ii) Informed us before your 56 th birthday on your decision to join CPF LIFE. The LIFE Bonus will be paid into your to enhance your monthly CPF LIFE payouts. If you have less than $20,000 in your before your 56 th birthday, your LIFE Bonus will be proportionately reduced. The amount of LIFE Bonus that you can receive depends on your annual Assessable Income (AI) and the Annual Value (AV) of your home. AI AV of Property $9,600 or less Between $9,600 and $13,000 $27,000 or less $2,600 $2,100 Between $27,000 and $60,000 $2,100 $1,450 The LIFE Bonus fi gures above are applicable to members turning 55 from 1 January 2015 to 31 December For more information on the LIFE Bonus, please visit I n f o r m a t i o n B o x What if I do not have $20,000 in my? You or your loved ones can make a cash or CPF top-up to your to make up this amount. (See page 12 for more details) 10

12 Leaving CPF LIFE The CPF LIFE payouts will stop upon death and your benefi ciaries will receive a bequest (if any is due). Otherwise, once you have joined CPF LIFE, you can only leave the scheme for the following reasons: You have a medical condition which causes you: To be permanently unfi t for any employment; To have severely reduced life expectancy; or To be terminally ill. You are about to leave/have left Singapore and West Malaysia permanently with no intention of returning for work or to live. You are a Malaysian Citizen and have left Singapore permanently to live in West Malaysia. You are fully exempted from setting aside the retirement sum in your because you are receiving a monthly pension/annuity payout. Both the CPF LIFE Standard Plan and the CPF LIFE Basic Plan have a refund feature. If you decide to leave your plan, you will receive a refund of the savings used to join CPF LIFE minus any monthly payouts received. The refund is your unused annuity premium. You may not receive a refund if we have already paid out all your savings used to join CPF LIFE. 11

13 Top Up For Tax Savings Top up for tax savings and earn higher interest If you can, it s well worth adding more to your CPF. Top up to boost your or your loved ones Special or savings. Topping up to the Enhanced Sum (available from January 2016), a sum set at three times the Basic Sum, gives you the opportunity to enjoy a higher monthly payout. Under the Sum Topping-Up Scheme, you can even get tax relief 8 for cash top-ups. The tax relief is up to $7,000 per year if you top up for yourself and an extra $7,000 per year if you top up for your family members. What are the criteria for cash and CPF top-ups? You can do a cash top-up to your and your loved ones CPF accounts, up to the current Full Sum. You can also transfer your Ordinary savings to your loved ones CPF accounts. You may do so after meeting the Full Sum you need to set aside when you turn 55 with your net balances in the Ordinary, Special and s including amounts withdrawn for investments. Amount of top-up that can be received For recipients below 55 years old Current Full Sum Net Special Balance Amounts withdrawn from Special under the CPF Investment Scheme (CPFIS-SA) For recipients 55 years old and above Current Full Sum Savings 9 8 Terms and conditions apply 9 Excludes interest earned since 55 years old, any government grants and monies withdrawn. 12

14 From 2016, you will have additional fl exibility to transfer your CPF savings above the Basic Sum to your spouse s CPF account. With this, both you and your spouse can enjoy the benefi ts of the extra interest paid on the fi rst $60,000 of combined CPF savings. Refer to the example below. Before spousal transfer At age 55, Mrs Tan has $35,000 in her. At age 65, her balance will have grown to about $59,000 which will provide her with monthly payouts for about 20 years. At age 55, Mr Tan has $100,500 in his. At age 65, Mr Tan will be placed on CPF LIFE with a balance of about $156,000. After spousal transfer Mrs Tan now has $55,000 in her at age 55. At age 65, Mrs Tan will be placed on CPF LIFE with a balance of about $90,000. Transfers $20,000 to Mrs Tan s CPF account Mr Tan now has $80,500 in his at age 55. At age 65, Mr Tan will be placed on CPF LIFE with a balance of about $127,000. After the spousal transfer, Mr and Mrs Tan would enjoy an additional $2,000 in interest which would help them boost their retirement payouts. Mrs Tan will now enjoy higher monthly payouts for life. I n f o r m a t i o n B o x Learn how to top up online Visit 13

15 Beyond 55 CPF beyond 55 If you decide to continue working, you and your employer will still contribute to your CPF. However, do note that the contributions to your Ordinary will reduce, and this may affect how you manage your housing loan payments. So, try to pay off your housing loan by 55 years old! The table below shows the CPF contribution rates for employees aged 50 to 65. Employee s age (years) 10 Employer contribution rates (% of wages) 11 Employee contribution rates (% of wages) 11 Total contribution rates (% of wages) 11 Above 50 to (16 + 1) 20 (19 + 1) 37 (35 + 2) Above 55 to (12 + 1) (25 + 1) Above 60 to 65 9 ( ) ( ) If you continue to work and contribute to your CPF after 55 years old, you may top up your using the new CPF contributions to help build up your retirement savings 12. You can also withdraw the excess if you have set aside your Full Sum or Basic Sum with suffi cient property charge/pledge. Housing repayments If you continue working after 55, your future Ordinary contributions can also be used for your housing loans. You can use your savings (excludes top-up monies, interest earned, and any government grants received) above your Basic Sum for your housing needs. 10 An employee will move to the next age group in the month after his 35 th, 45 th, 50 th, 55 th, 60 th and 65 th birthday. 11 Increases in the contribution rates, applicable from January 2016, are shown in bold. 12 It may then be used to buy an additional CPF LIFE annuity when you reach your payout eligibility age. 14

16 Insurance premiums You can continue to use your Ordinary savings for insurance premiums under the Home Protection Scheme (HPS)/ Dependants Protection Scheme (DPS), after setting aside your retirement sum at age 55. Sale of property If you sell your property, you need to refund the CPF that was used to buy it and the accrued interest 13. If you had also withdrawn from your by pledging your property, you need to refund the pledge amount as well. The amount refunded will be used to build up your retirement savings. The balance of the housing refunds will then be paid to you, after setting aside the current Medisave Minimum Sum. I n f o r m a t i o n B o x If you own an HDB fl at, you can generate income from your fl at for your retirement needs. You may: Move to a smaller fl at or Studio Apartment and sign up for the Silver Housing Bonus to get a cash bonus when you top up to your Sign up for the Enhanced Lease Buyback Scheme and top up your to get a cash bonus Rent out your whole fl at or room(s) If you have any questions, please call HDB s toll-free hotline at , or visit The above is subject to the eligibility conditions under HDB s prevailing policies. 13 This is the interest you would have earned had you not withdrawn your CPF savings for the property. 15

17 Conclusion Now that you have had the opportunity to consider your CPF planning, remember three points: Make an informed decision on your desired payouts. Join CPF LIFE to enjoy lifelong monthly payouts. Top up your and your loved ones retirement savings. 16

18 Annex A How much can you withdraw? Let s meet Ms Anita s friends: Mr Ahmad, Mr Ravi, and Mdm Polly. They have different Xs and Medisave savings in their CPF accounts at 55. Let s start with Mr Ahmad. Mr Ahmad s X is more than $166,000. His Medisave has $43,500. Introducing Ms Anita & Friends... Medisave Mr Ahmad Mr Ahmad s CPF Savings Assume Mr Ahmad has: $200,000 Mr Ravi Ms Anita Mdm Polly $43,500 $100,000 will be created on his 55 th birthday $43,500 $5,000 $166,000 X Ordinary Special Medisave Savings How much can Mr Ahmad withdraw? X = $100,000 + $200,000 = $300,000 $161,000 will be transferred to his fi rst. $161,000 $100,000 Mr Ahmad can choose to leave his Full Sum of $161,000 in his to receive a monthly payout of $1,220 to $1,320 from age 65 for life. He can then withdraw the balance of $139,000 from his Ordinary and Special s, as he has set aside his Full Sum of $161,000 and the current Medisave Minimum Sum of $43,500. If he owns a property, he can also choose to set aside his Basic Sum of $80,500 in his $39,000 $43,500 and receive a lower monthly payout. In this case, he can withdraw $139,000 from his Ordinary and Special s, and an additional $80,500 from his Ordinary Special Medisave by pledging his property. 17

19 Annex A How much can you withdraw? How about Mdm Polly? Mdm Polly s X is more than $166,000. However, Mdm Polly s Medisave has less than $43,500. She has an Medisave Minimum Sum shortfall. Mdm Polly s CPF Savings Assume Mdm Polly has: $180,000 Savings X = $100,000 + $180,000 = $280,000 $161,000 will be transferred to her fi rst. $161,000 $100,000 $100,000 RA will be created on her 55 th birthday $20,000 $19,000 $20,000 Ordinary Special Medisave Ordinary Special Medisave Medisave Minimum Sum Shortfall Mdm Polly s Medisave has $20,000. This is $23,500 short of the Medisave Minimum Sum of $43,500. Therefore, $23,500 is transferred to her Medisave. $155,000 $23,500 is transferred to Medisave $95,500 How much can Mdm Polly withdraw? Mdm Polly can choose to leave her Full Sum of $161,000 in her to receive a monthly payout of $1,220 to $1,320 from age 65 for life. She can then withdraw the balance from her Ordinary and Special s after transferring $23,500 to Medisave to make up the Medisave Minimum Sum of $43,500. This means that Mdm Polly can withdraw $95,500 from her Ordinary and Special s. $43,500 If she owns a property, she can also choose to set aside her Basic Sum of $80,500 in her and receive a lower monthly payout. $0 In this case, she can withdraw $95,500 from her Ordinary Ordinary Special Medisave, and an additional $80,500 from her by pledging her property. 18

20 Annex A How much can you withdraw? How about Mr Ravi? Mr Ravi s X is between $0 to $5,000. He can withdraw all of his X. Mr Ravi s CPF Savings Assume Mr Ravi has: How much can he withdraw? X = $3,000 + $1,000 = $4,000 Mr Ravi can withdraw all of his Ordinary and Special s savings (i.e. $4,000) and nothing will be transferred to his. RA will be created on his 55 th birthday The $500 will remain in his Medisave for his or his dependants healthcare needs. $3,000 $4,000 $1,000 $500 $500 Ordinary Special Medisave Ordinary Special Medisave Bank 19

21 Annex B Guide on decisions and actions you need to make on the CPF Investment Scheme (CPFIS) and CPF Education Scheme matters when you reach 55. When you want to withdraw your CPFIS and Special Discounted Shares (SDS) investments, or apply for waiver of the education loan repayment What How Upon successful application If you have set aside your Full Sum or Basic Sum with sufficient property charge/ pledge If you have not set aside your Full Sum or Basic Sum with sufficient property charge/ pledge Investments Apply online through My Request from the CPF website or complete form INV-Transfer. Education Apply online through My Request from the CPF website or complete form AES W1. Investments Top up your /Medisave to meet your Full Sum and/or the current Medisave Minimum Sum before you can withdraw your CPFIS investments and SDS investments. Education Top up your /Medisave to meet your Full Sum and/or the current Medisave Minimum Sum before you can apply for waiver of the education loan. Investments CPFIS-Ordinary (CPFIS-OA) We will inform your agent bank to close your CPF Investment. You may approach the bank for the withdrawal of your investments and cash after we have notified you. Your investments will be transferred to your name. You can then liquidate them if you wish and have the money made from the sale paid to you directly. CPFIS-Special (CPFIS-SA) We will inform your product provider(s) to transfer your investments to your name. You can then liquidate them if you wish and have the money made from the sale paid to you directly. Special Discounted Shares (SDS) We will transfer your SDS to your Central Depository (CDP) Securities. Service standards: CPFIS-OA & SA Form application We will notify your agent banks and product providers within three working days from the day we receive your application. After that, agent banks and product providers will liaise with you to get more information for the release. Online application One working day SDS Form or online application Within 15 working days from the day we receive your application and CDP transfer free (this includes CDP s processing time). Education Form application 14 working days Online application Up to two working days Up to eight working days if the application is submitted during the monthly Inter-Bank GIRO (IBG) deduction period, which typically takes place from the 15 th to 23 rd of each month. This is to take into account the bank s processing time for monthly deductions from students IBG accounts. 20

22 Glossary Term Definition Sum Basic Sum (BRS) The retirement sum to set aside at age 55 to receive a monthly CPF LIFE payout of about $660 - $720 from payout eligibility age. This sum is set at $80,500 for members who turn 55 between July 2015 and December This assumes that the member owns a property and does not need to pay rent. Full Sum (FRS) The retirement sum to set aside at age 55 to receive a monthly CPF LIFE payout of about $1,220 - $1,320 from payout eligibility age. It is set at two times the Basic Sum (i.e. $161,000 for members who turn 55 between July 2015 and December 2016). This assumes that the member does not own a property or does not wish to pledge their property. Enhanced Sum (ERS) available from January 2016 The retirement sum to set aside at age 55 to receive a monthly CPF LIFE payout of about $1,770 - $1,920 from payout eligibility age. It is set at three times the Basic Sum (i.e. $241,500 in 2016). CPF members who want to have higher monthly payouts can top up their to this amount. Payout Age Payout Eligibility Age (PEA) Formerly known as the drawdown age. It has been renamed to differentiate it from the payout start age (see below). This is the age at which CPF members are eligible to receive CPF payouts. It is currently at age 65 years old for members who are born in 1954 or later. Payout Start Age (PSA) This is the age at which CPF members have chosen to start their payouts. For members under the CPF LIFE scheme, they can choose to start their payouts anytime between age 65 to 70. For each year deferred, monthly payouts will permanently increase by 6 to 7 per cent for members under the CPF LIFE scheme. Other Terms Annuity An annuity is an insurance product which provides you with a monthly income for the rest of your life. Annuity Fund/ Lifelong Income Fund The annuity fund, also known as the Lifelong Income Fund, consists of the annuity premium, the interest earned on the annuity premium and the extra interest earned by members on the CPF LIFE Standard Plan. Annuity Premium The annuity premium is the amount of your savings committed to CPF LIFE. Assessable Income (AI) Your AI refers to your total annual income less approved deductions. To work out your AI, we will use the assessment year before the year that we issue your CPF LIFE plan, as provided by IRAS. For example, if we issue your CPF LIFE plan in 2015, we will use your AI for assessment year 2014 (that is, your income for 2013). 21

23 Glossary Term Definition Other Terms Annual Value (AV) The AV of your property refers to how much rent we estimate you could receive each year if you rented it out. To work out the value of your property, we will use the AV of the property stated as your NRIC address as at 31 December before the year we issue your CPF LIFE plan, as provided by IRAS. For example, if we issue your CPF LIFE plan in 2015, we will use the 2014 AV of the property stated in your NRIC as of 31 December Beneficiaries Beneficiaries are the people who you have nominated to receive your CPF savings after your death. If a CPF nomination is not made, upon death, your CPF savings will be distributed by the Public Trustee in accordance to the intestacy laws of Singapore, which ensures that the welfare of your dependants are provided for. Bequest A bequest is the money that you leave to your beneficiaries after your death. There may not be a bequest if the savings used to join CPF LIFE have been fully paid out in monthly payouts. Medisave Minimum Sum (MMS) When you make a withdrawal from your CPF after 55, you will be required to set aside the Medisave Minimum Sum of $43,500 in your Medisave for your healthcare needs. From January 2016, the MMS will be removed. You will no longer be required to top up your Medisave before making a CPF withdrawal at 55. Your Medisave savings will remain in your Medisave and can be used to pay for your or your dependants healthcare needs. In view of this upcoming change, from now till 31 December 2015, you have the option to not top up to your Medisave when you withdraw your CPF monies. Medisave Minimum Sum (MMS) Shortfall You will have a Medisave Minimum Sum shortfall if your Medisave balance falls below the Medisave Minimum Sum of $43,500. You will be required to top up the shortfall with a portion of your Special and/or Ordinary savings only after you have met the Full Sum. Property Charge A charge is created when a member uses his CPF savings to finance the purchase of his property and pay his housing loan. Property Pledge CPF members can withdraw their savings 14 above the Basic Sum in cash if they pledge their property. Pledging a property means that when a person sells his property, the amount pledged will go back to his. It does not affect one s ownership of the property. 14 Excludes top-up monies, interest earned and any government grants received 22

24 Notes 23

25 24 Notes

26 Information is accurate as of 24 April 2015