Minimum Sum Scheme

The CPF Minimum Sum Scheme aims to provide members with a monthly income to support a basic standard of living during their retirement. CPF members can apply to commence their monthly withdrawals from their Retirement Account when they reach their applicable Draw Down Age. The monies in the Retirement Account currently earns 4% interest per annum. The interest rate is reviewed yearly.

Upon reaching 55 years old, members are able to withdraw the portion of their CPF savings in excess of the Minimum Sum. This allows members to use their savings to meet their financial needs at 55 years of age, while ensuring they also have some regular income to live on in their retirement.

If a member is unable to set aside the full Minimum Sum in cash, his property, bought with his CPF savings, will be automatically pledged for up to half of your Minimum Sum. The member will receive a monthly income from his Draw-Down Age until his Minimum Sum is exhausted.

Members have the option to start their monthly payouts later, in order to make their payouts last longer. In addition, members may participate in CPF LIFE or buy approved life annuities with their Minimum Sum to give them a guaranteed income for life. Alternatively, they may place their savings with approved banks or continue to keep it with the CPF Board.

For details, visit the CPF website.

Minimum Sum Topping-Up Scheme

Currently, taxpayers can enjoy tax relief of up to $7,000 per calendar year, if they use cash to top up for themselves and/or receive cash top-ups from their employer. They can also enjoy additional tax relief if they use cash to top up for their spouse, siblings, parents or grandparents. The additional tax relief is capped at $7,000 per calendar year, regardless of the total amount of cash top-ups they have made to their family members.

To qualify for tax relief for cash top-ups for spouse/siblings, the spouse/siblings (i) must not have income exceeding $4,000 in the year preceding the year of top-up (e.g. salary or tax exempt income such as bank interest, dividends and pension) or (ii) is handicapped.

For cash top-ups made in the year, taxpayers can claim tax relief in the following year’s Tax Assessment.

For details, visit the CPF website.