Using CPF as fixed deposit after age 55

[egghead]

Personally, I would email to CPF Board to get answers so that I know it is official, and I would encourage you to do likewise, and then share widely. Anyway, below are my understanding:

At 55 the Retirement Sum amount is moved to your Retirement Account. The RS amount can be $80,500 if you pledge your property, or $161,000 if you don't.

Will the rest of your balance will remain in SA/OA?
If it does, it means we can use it as a fixed deposit.

Your OA, SA and MA will continue to be maintained simply because of possible continued contribution due to employment after 55.

Another qn: from 55 onwards, we can make yearly withdrawals. How much can we withdraw? AFAIK:
-Can withdraw any contribution to SA/OA.
-Interest earned in RA will remain in RA to accumulate for CPF life.
-How about interest earned in SA/OA? Can we withdraw them yearly as well?

Yes, I share the same understanding.

Another question: lets say a person is eligible to withdraw at 55, $120,000, after setting aside the Basic Retirement Sum. Does it mean that he can choose to let the $120,000 remain in his SA/OA? Then from 55-65 can make yearly withdrawals of $12,000, while still earning interest. In other words, if a person has sufficient amounts ($120,000 in this case) he technically can retire at 55 already (rely on yearly withdrawal $12,000 from 55-65, then rely on cpf life from 65 onwards)?

My understanding is - yes, the arrangement can be made and he should receive more than $12,000 a year due to interest. Whether $1,000 per month is sufficient for his retirement depends on his remaining liabilities and lifestyle.

[kehyi4]

I know I don't have many posts here (this is my 2nd...) but i've done a fairly intensive study of the CPF OA/SA/RA in the past few months, and I hope I can share some of the things I've learned, as well as gain insights from others here. But like Egghead said, checking with CPF Board directly would probably be best.

At 55 the Retirement Sum amount is moved to your Retirement Account. The RS amount can be $80,500 if you pledge your property, or $161,000 if you don't.

Will the rest of your balance will remain in SA/OA?
If it does, it means we can use it as a fixed deposit.

The RA is created by transferring the FRS from your SA first, OA second to the RA. If you choose to pledge your property, you can then withdraw the amount in your RA that is over the BRS.

Unfortunately, there seems to be no mechanism to transfer this sum back to your OA or SA. You'll need to withdraw it out of CPF.

Another qn: from 55 onwards, we can make yearly withdrawals. How much can we withdraw? AFAIK:
-Can withdraw any contribution to SA/OA.
-Interest earned in RA will remain in RA to accumulate for CPF life.
-How about interest earned in SA/OA? Can we withdraw them yearly as well?

The deduction sequence of CPF monies after 55 is given in the CPF FAQ.

---
From CPF FAQ:
Please note that the Board processes all withdrawals for members who are 55 and above, using the following deduction sequence:
i) interests earned in the Medisave, Special then Ordinary Accounts from the beginning of the year up to the month before the withdrawal, followed by
ii) contribution/refunds credited in the Medisave, Special then Ordinary Accounts in the same month of the withdrawal, and lastly,
iii) excess monies above the Medisave Minimum Sum in the Medisave Account, Special Account then Ordinary Account.
---
This means that it should be possible use the sum left in CPF OA/SA/MA as a FD, by withdrawing only the interest earned in MA, SA and OA (up to Nov).

On HWZ, a forumer advised from experience that the best time to do such a withdrawal from CPF is early Dec. You can approach the CPF office and ask them how much interest you have accumulated up to Nov, then withdraw that amount.

Another question: lets say a person is eligible to withdraw at 55, $120,000, after setting aside the Basic Retirement Sum. Does it mean that he can choose to let the $120,000 remain in his SA/OA? Then from 55-65 can make yearly withdrawals of $12,000, while still earning interest. In other words, if a person has sufficient amounts ($120,000 in this case) he technically can retire at 55 already (rely on yearly withdrawal $12,000 from 55-65, then rely on cpf life from 65 onwards)?

As I mentioned earlier, the sum above BRS in the RA has to be withdrawn. The sum left in OA/SA/MA can be left there to earn interest. Whether it's worthwhile or not depends on how much OA/SA/MA you can accumulate before 55. If you are in a position to maximise your CPF, and are confident that you will exceed FRS (which increases every year by about 3%) to a meaningful extent at 55, then using CPF as FD after 55 should be feasible.

It's something I'm planning to do I'll report back when I cross that line sometime in the next decade...