Like most people, I used to think I could call it a day when I reach my retirement with a target, say a million dollars. I was wrong. Today, retirement planning is no longer just about saving a retirement sum but to build retirement income.

CPF Retirement schemes

In Singapore, nobody can talk about retirement without mentioning CPF. Ironically, CPF retirement schemes are familiar yet confusing to many people. Are you struggling to understand how the recent CPF changes affect your own retirement plans?

In this post, I will explain how the new CPF Retirement Sum Scheme impacts your retirement and the 3 options you have. If you want to know how CPF fits your retirement portfolio, check out my latest book “F.I.R.E. Your Retirement: 3 Simple Steps to Financial Independence and Retire Early“, where I give you a step-by-step guide to building an IGA portfolio for your own retirement.

Do you know for Singaporeans who are 65 today, about half of them are expected to live another 20 years (that is, 85 and beyond), while a third will live beyond 90? Most of us may have overestimated how much our money, even one million dollars, can last. The hard truth is that most Singaporeans’ retirement savings can last only 13 years.

Today’s pre-retirees are not only facing a longer life expectancy, but also

  1. The rising cost of living
  2. Ongoing support for ageing parents
  3. Mountains of education bills from our kids in the coming years.

That is why I repeatedly said on this blog that the only way to retire in Singapore is to build multiple streams of passive income. I bet the government has already realised this and CPF Retirement Sum scheme is their solution to provide at least one stream of income for Singaporeans.

What is CPF Retirement Sum

It used to be called CPF Minimum Sum Scheme, but now it is called CPF Retirement Sum Scheme. When you turn age 55, your ordinary account and the special account will be combined as a Retirement Account. This scheme aims to convert a lump sum of your CPF money to a monthly income to support a basic standard of living during retirement for about 20 years.


It is called the basic standard of living for real. Because the income it can provide is estimated from $660 to $1,920 only. Given today’s living standard, this is obviously below many Singaporeans’ retirement needs.

More CPF to be withdrawn with the removal of Medisave Minimum Sum

Currently, when you make a withdrawal from your CPF after 55, you have you set aside the CPF Minimum Sum of $155,000 and Medisave Minimum Sum (MMS) of $43,500 in your Medisave Account for your healthcare needs.

As a result, most people can only withdraw pathetic $5,000 at age 55. From 1 January 2016, this minimum sum will be removed. In another word, you are given an option to withdraw more CPF at your retirement age.

That being said, your Medisave savings will remain in your Medisave Account and can be used to pay for your or your dependants’ healthcare needs. However, now you have the option not to top up your Medisave Account when withdrawing your CPF monies.

How much can you withdraw from CPF at 55 years old?

The table below illustrates the amount you can withdraw from your CPF Account when you turn 55 years old. As you can see, previously you were able to withdraw up to 50% of combined savings of Ordinary, Special and Medisave account. The percentage has been decreasing until no more. Now, the amount you can withdraw from your CPF really depends on the Retirement Sum you have to set aside. (Who wants to end up with $5,000 anyway?)

Before 2009Highest of

  • 50% of savings in the Ordinary and Special Accounts, and Medisave Account savings above the current MMS;
  • $5,000; or
  • Savings above the Full Retirement Sum and the current MMS
2009Highest of

  • 40% of savings in the Ordinary and Special Accounts, and Medisave Account savings above the current MMS;
  • $5,000; or
  • Savings above the Full Retirement Sum and the current MMS
2010Highest of

  • 30% of savings in the Ordinary and Special Accounts, and Medisave Account savings above the current MMS;
  • $5,000; or
  • Savings above the Full Retirement Sum and the current MMS
2011Highest of

  • 20% of savings in the Ordinary and Special Accounts, and Medisave Account savings above the current MMS;
  • $5,000; or
  • Savings above the Full Retirement Sum and the current MMS
2012Highest of

  • 10% of savings in the Ordinary and Special Accounts, and Medisave Account savings above the current MMS;
  • $5,000; or
  • Savings above the Full Retirement Sum and the current MMS
Between 2013 and 2015Higher of

  • $5,000; or
  • Savings above the Full Retirement Sum and the current MMS
2016 and onwardsHigher of

  • $5,000; or
  • Savings above the Full Retirement Sum

How much you must set aside for Full Retirement Sum

Remember I said you have 3 options? They are

  1. Basic Retirement Sum (BRS)
  2. Full Retirement Sum (FRS)
  3. Enhanced Retirement Sum (ERS)

Previously, you have to set aside CPF Minimum Sum. Now, you can choose one of these options, depending on your desired CPF LIFE monthly payout and your CPF balances. Setting aside less Retirement Sum means that you can withdraw more CPF when you turn age 55. But that does not mean you should just choose the Basic Retirement Sum plan.


The payout options and the corresponding retirement sum from 1 July 2015 are as below:

Retirement Sum OptionsEstimated Lifelong Monthly PayoutRetirement Sum to be set aside in your Retirement Account
Basic Retirement Sum (BRS)
If you own a property and do not need to pay rent.
$660 to $720$80,500
Full Retirement Sum (FRS)
If you do not own a property or do not wish to pledge your property. It is set at two times the BRS.
$1,220 to $1,320$161,000
Enhanced Retirement Sum (ERS)
From 1 Jan 2016, you can top up to the ERS, a sum set at three times the BRS, to enjoy a higher monthly payout.
$1,770 to $1,920$241,500

Full Retirement Sum (FRS) is essentially two times the BRS, and Enhanced Retirement Sum (ERS) is three times the BRS.

Retirement Sum will increase over the years

Just like the previous CPF Minimum Sum, Retirement Sum is set to increase every year to reflect inflation.

If you are turning 55 between 1 Jul 2015 and 31 Dec 2016, your BRS and FRS are $80,500 and $161,000 respectively. The BRS will be increased by 3% from the cohort in the previous year to cater for long term inflation and increase in standard of living. Correspondingly, the FRS and ERS will be set at two times and three times the BRS respectively.


Can you be exempted from setting aside a retirement sum?

According to CPF website, you may apply for an exemption from setting aside a retirement sum if:

  • You have your own life annuity bought using cash. The monthly payout you receive from the life annuity should be equal to or above the full monthly payout; or
  • You are a pensioner receiving a monthly pension equal to or above the full monthly payout.

To apply for an exemption, you can submit a copy of the annuity policy or a recent letter issued by the Pension Office of the Accountant-General’s Department, certifying the monthly pension amount.

Can you rely on CPF Retirement Sum scheme to retire?

The short answer is No!

Unfortunately, CPF Life is likely the biggest retirement income source for many Singaporeans. HSBC’s survey shows that 41% of retirees regret that they did not start to save before age 30.


The Basic Retirement Sum of $80,500 can only provide you with $660 to $720 retirement income, and many people may not even have this because they have fully utilised their CPF for their mortgage loans.

Fortunately, there are other sources of retirement income which you can tap into.

If you want to conduct a holistic retirement planning to design multiple streams of income for your retirement, simply leave your comment below and I will answer all of them…

About the Author

Ivan Guan is the author of the popular book "FIRE Your Retirement". He is an independent financial adviser with more than a decade of knowledge and experience in providing financial advisory services to both individuals and businesses. He specializes in investment planning and portfolio management for early retirement. His blog provides practical financial tips, strategies and resources to help people achieve financial freedom. Follow his Telegram Channel to join the FIRE community.
The views and opinions expressed in this article are those of the author. This does not reflect the official position of any agency, organization, employer or company. Refer to full disclaimers here.

  • i am 63 yrs now and can I put in extra $$ in my BRS to make it total $100k so that i can get more per month or the sum is fixed for brs,frs and ers.

  • Halo! Happy New Year 2019!
    This is my first comment here and I wish to know more about Retirement plan as well.Do share with me.Thanks

  • Hi, I’m enjoy reading yr articles.
    I’m currently age 51, just to check if there will be next adjustment in 2021 ? and will the new payout at age 65 be the same amount with the current payout ?


  • Hi Ivan,

    How does the CPF Life payout calculations come about? I have not been able to find any information on it. What I can see from the CPF site is that the payouts are not directly proportional. I.e. the higher plans pays out lesser. The basic plan seems to pay out the best. Can you advise why this is so?

    Also, if I compare against a 20 years draw down on the old scheme, the amount is $351 for a balance of $39500. (That is about as best as I can get from CPF’s site as they don’t seem to have any calculator for this purpose). If I just take multiples of this amount, say $240K at age 65, then the draw down payout is ~(350 x 6) which is about $2100/mth. Is this correct?

    What I’m trying to do is to compare against the plans and to see which gives the best returns. I cannot find this level of comparison. I’m just suspecting the CPF Life is not suitable for my needs

    Can you help?


    • Hi David

      If you compare standard and basic plans, standard plan will pay higher as it has less bequest.

      For draw down options, you can’t compare the return by just multiplying the payout. This is because there is an assumed investment return based on the principals left.

      If you can let me know more about your specific situation, I will be able to help you analyse your retirement needs.

    • CPF Minimum Sum is increasing at a rate about 3% per year. If this is consistent, the Retirement Sum will be $258,000 in 15 years time and $300,000 in 20 years time.

  • I have not checked in here for a while since I thought it was getting boring, but the last few posts are good quality so I guess I’ll add you back to my daily bloglist. You deserve it my friend

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