The biggest limiting factor people have when it comes to their CPF accounts is the fact that their Retirement Account (RA) funds are about as inaccessible as Area 51 until you reach the drawdown, which varies from 62 to 65 depending on your year of birth.
The problem with having an inaccessible RA account is that it leaves Singaporeans still servicing their home loan with their CPF in a helpless situation because:
- Retrenchment: No income means they can no longer make contributions into his/her Ordinary Account (OA).
- Contribution level: The contribution level decreases significantly after 55, making it harder to meet the minimum cash component in RA.
Ironically, the only exceptions for using your RA funds involve purchasing property under the following conditions:
- You can only use the excess in your RA AFTER setting aside the minimum cash component, which is currently $148K.
- Of that $148K, you’ll need to maintain $74K in your RA, with the excess (excluding annual interests) being available for the purchase of property.