CPF Rules & Early Repayment
When you own an HDB flat, it is important to understand how the CPF rules affect your ability to make housing loan repayments once you turn 55. Upon reaching that age, you will need to balance both your retirement and housing needs using your CPF savings.
Familiarise yourself with the following terms to help you plan ahead and prepare.
To reduce your financial commitments, you can also use your CPF Ordinary Account savings to make partial or full redemption of your outstanding housing loan before you reach 55. However, the CPF Withdrawal Housing Limits may apply.
Your CPF Retirement Account will be created for you when you turn 55. At this point, a portion of the savings in your CPF Ordinary Account and Special Account will be transferred to the Retirement Account to meet your applicable Retirement Sum.
The Full Retirement Sum is $166,000 for people turning 55 from 1 January 2017. Upon reaching the Payout Age, CPF pays you a monthly income to support a basic standard of living during retirement. Based on the amount in your Retirement Account, you will either:
If you continue working after 55, you can still use the monthly contribution that goes into your Ordinary Account to service your housing loan. This means that even if you have not met the Full Retirement Sum upon reaching 55, you can still use your Ordinary Account contributions for your housing loan repayments.
Please note that the CPF Housing Withdrawal Limits may apply in either instance. This limit helps to protect you from overspending on housing loan repayments at the expense of your retirement savings.