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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 capital repayment or redeem your outstanding housing loan before you reach 55. However, the CPF Housing Limits may apply.
Your CPF Retirement Account will be created for you when you turn 55. At this point, the savings in your CPF Special Account followed by the Ordinary Account will be transferred to the Retirement Account to meet your Full Retirement Sum.
The retirement sum you set aside in your Returement Account will provide you with CPF LIFE monthly payouts for your daily expenses in retirement from 65, no matter how long your live.
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.
Consider keeping some savings to earn attractive CPF interest rates and use them to boost your monthly payouts in retirement.
Please note that the CPF Housing Limits may apply. This limit helps to protect you from overspending on housing loan repayments at the expense of your retirement savings.