Early CPF withdrawals indicate anxiety; more nest eggs needed for future

SINGAPORE (Sept 10): It will be more than a decade from now before Tee, 43, can withdraw some cash from her Central Provident Fund (CPF) savings, but she has already made up her mind. Once she turns 55, the electrical engineer hopes to withdraw up to “tens of thousands” of dollars from her Ordinary Account (OA) and Special Account (SA) savings. This is the milestone age when the Retirement Account (RA) is created, and partial withdrawal from then on is allowed depending on one’s level of savings.

“I want to use the money in other areas such as investments or to start a [new venture],” she tells The Edge Singapore, while having lunch with her colleague at Toa Payoh Central. She has not settled on an investment plan yet, but she says, “ultimately, it is about having ownership over your own money. It is about having the option [to take out the money].”

Tee will be among the many Singaporeans who are choosing to tap their CPF early. Indeed, a report released by the CPF Board in August indicates that six in 10 members aged 55 to 70 have withdrawn cash from their CPF account since turning 55. The median amount and average amounts withdrawn were $9,000 and $33,000, respectively. This is based on the findings of the first two waves of the Retirement and Health Study, conducted in 2014 and 2016.

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