Singapore government is definitely determined to handle the “CPF hot potato“. There were several amendments to the CPF Act passed in Parliament lately on Oct 10, 2016. It is called Amendment No. 2 bill. Below are the 4 key changes.
#1 You can make more Lump Sum Withdrawals
We used to be able to withdraw 50% of our CPF savings upon retirement, and it was reduced to only $5,000 after 2009.
Now, CPF members who turned 55 in 2013 and later can make a lump sum withdrawal of 20% from their Retirement Account when they reach the payout eligibility age.
#2 You will get automatic payouts for Retirement Sum Scheme
Previously, members of the Retirement Sum scheme had to apply to start their payouts. Starting from 2018, payouts will begin automatically once the member turns 70.
#3 More changes to Medisave Scheme
On Jan 1 this year, the Basic Healthcare Sum was introduced. It used to be called Medisave Minimum Sum and is the maximum that can be set aside in the Medisave Account (sounds contradicting right, no wonder they need to change the name? ^_^). The current Basic Healthcare Sum is set at $49,800.
The CPF Act has been changed to fix the Basic Healthcare Sum for each cohort when they turn 65 years old, and to remove obsolete provisions relating to the Medisave Minimum Sum.
#4 Top up family member’s Medisave from own CPF
CPF members who have set aside their full Retirement Sum will be able to top up the Medisave Accounts of certain family members, aged 55 and above, directly from their own Ordinary and Special Accounts.
Previously, they would have had to withdraw excess monies in cash first.
To sidetrack a bit, you can also make cash top-ups under the CPF Retirement Sum Topping-Up Scheme to your Special Account (for recipients below age 55) or Retirement Account (for recipients age 55 and above).
Not only you can earn higher CPF interest, but also get up to $7K tax relief. You can also make top-ups for your spouse or siblings, but the spouse or siblings must not have an annual income exceeding $4,000 in the year preceding the year of top-up.
Being the national retirement scheme, CPF affects all of us. If you want to keep up with the CPF changes, simply leave your email below to receive the latest CPF updates.