Karen Tang, CFP®: Certified Financial Planner in Singapore

Should You Withdraw CPF Cash at Age 55

The Straits Times article “Should You Withdraw CPF Cash at Age 55” published on 23 September 2018 is a good read and provides a good overall view of the options available for investing your CPF money.

Many people who are turning 55 would be faced with this question. There is no ‘one size fits all’ answer as each individual’s situation is unique and needs are different. The big picture view of one’s retirement has to be considered before making that decision.

Yes, it is tempting to take out the excess CPF money, especially if it is a substantial amount. But unless you are investment-savvy enough to grow that money to hedge against inflation, I would recommend that you leave the money with CPF to earn higher interest rates and withdraw only as and when you need the cash.

Cash flow management in retirement is often overlooked
Cash flow management (i.e. cash inflow and outflow) is at the heart of retirement planning and requires some discipline.

The short-sightedness of splurging during the early years of retirement could jeopardise one’s cash flow needs during the later years. Even during retirement, our spending ought to be in check, balancing needs and wants.

It is easy to say ‘I don’t think I’ll live that long’ or ‘I don’t want to bring money to the grave with me’. But have you thought about this: What if you outlive your resources? Who do you turn to for help?

Do not leave your retirement to chance
A comfortable retirement can be achieved with thoughtful planning ahead of time. Instead of waiting till you turn 55 to plan for retirement, why not do it now? Having that assurance is precious peace of mind.

Your retirement years are your golden years. Make it truly golden!

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