Chapter 4

Question 1

CPF stands for…

Answer 1

Central Provident Fund

Question 2

What is cpf

Answer 2

a compulsory savings scheme to ensure enough savings when retired or not working

Question 3

main aim of CPF is to cover 3 basic needs in retirement

Answer 3

1. Fully paid up home
2. Insurance and savings for healthcare
3. Steady stream of lifelong retirement income

Question 4

CPF is a mandatory social security plan for…

Answer 4

• Retirement
• Healthcare
• Home Ownership
• Family Protection (HDB)
• Asset Enhancement & Investment

Question 5

CPF is capped at…

Answer 5

• $6,800 NOW
• 1st Jan 2025: $7,400
• 1st Jan 2026: $8,000

Question 6

4 types of CPF

Answer 6

• Ordinary Account (OA)
• Special Account (SA)
• MediSave Account (MA)
• Retirement Account (RA)

Question 7

Use of OA

Answer 7

Housing insurance, investment, and education

Question 8

Use of SA

Answer 8

Old age and investment in retirement-related financial products

Question 9

Use of MA

Answer 9

For hospitalization express and approved medical insurance

Question 10

RA

Answer 10

• created for you when you reach the age 55
• will set aside savings in SA and OA accounts
• then balance savings can be withdrawn in one lump sum

Question 11

CPF contributions rates depends on…

Answer 11

➢ nationality (SC or SPR)
➢ Length of PR Status (for PRs)
➢ age group
➢ salary range
➢ nature of employment

Question 12

CPF calculations will only consider

Answer 12

Standard interests, dont care about extra interest rate for ct

Question 13

Standard interest for OA

Answer 13

• 2.5% p.a
• Reviewed quarterly

Question 14

Standard interest for SA & MA

Answer 14

• 4% p.a
• Reviewed quarterly

Question 15

Standard interest for RA

Answer 15

• 4% p.a
• Reviewed yearly

Question 16

what is ordinary wage (OW) ceiling?

Answer 16

• limits the amount of OW that attract CPF contributions in a calendar month for all employees.
• will be capped at $8k in 2026

Question 17

When calculating OA you need to…

Answer 17

• find MA and SA
• then minus from monthly contribution.

Question 18

CPF allows you to use OA to…

Answer 18

• Buying HDB flats
• Buy or build private residential properties in SG

Question 19

USE OF CPF OA

Answer 19

• to buy an HDB flat under the Public Housing Scheme
• to buy a private property under the Private Properties Scheme
• for full or part payment of the property price
• for payment of legal expenses, stamp duty and costs related to the property purchase.
• to service the monthly housing payments

Question 20

CPF HELPS PROVIDE EQUITY

Answer 20

Since CPF OA can be used to help pay for the purchase of a house, this allows homeowners to take a smaller loan.

Question 21

REMAINING LEASE OF PROPERTY

Answer 21

• Total amount of CPF that can be used for property purchases will depend on
• Extent the remaining lease can cover youngest buyer to age of 95.

Question 22

How to ensure prudent use of CPF monies

Answer 22

• minimum lease requirement for use of CPF for property purchases.
• Lowered to 20 years (from the existing 30 years), in line with existing criteria for HDB loans

Question 23

WHAT IF APPLICANTS ARE 55 YEARS OLD OR OLDER AND THE BALANCE LEASE IS LESS THAN 40 YEARS? (UNABLE TO COVER TO AGE OF 95)

Answer 23

• a CPF member has to set aside a FULL Retirement Sum in his Retirement Account from his Special Account. (why 40 years, because 55 +40 = 95 years)
• If insufficient, then OA savings will be used. Cannot withdraw any further to pay for his loan instalments. This applies to all cases.

Question 24

AT THE AGE OF 55 YEARS, IF THE BALANCE LEASE IS AT LEAST 40 YEARS

Answer 24

• CPF member has to set aside a BASIC Retirement Sum in his RA from his SA.
• The same amount is pledged against his/her residential property
• If insufficient, then OA savings will be used. Otherwise, cannot withdraw any further to pay for his loan instalments.

Question 25

Limits on use of CPF: HDB flat, directly from HDB, no loan...

Answer 25

Up to the purchase price of the flat or such amount as may be required by HDB

Question 26

Limits on use of CPF: HDB flat, directly from HDB, w HDB loan

Answer 26

Up to the purchase price of the flat or the housing loan taken to buy the flat

Question 27

Limits on use of CPF: HDB/DBSS, resale, w HDB loan

Answer 27

* Up to lower of purchase price or valuation price of property at time of purchase, if cannot set aside Basic Retirement Sum (“BRS”) * Up to housing loan taken to buy flat, if can set aside BRS.

Question 28

Limits on use of CPF: HDB/DBSS, resale, w Bank loan

Answer 28

Up to lower of purchase price/valuation price at time of purchase, if cannot set set BRS

Question 29

Valuation Limit

Answer 29

LOWER of purchase price ( price at which the property is transacted at) OR market value (based on valuation) of property at the time of purchase

Question 30

What if Balance lease is below 20 years?

Answer 30

* Cannot use CPF funds * Can still buy, at your own risk. * Have to use your own equity. * Loans from financial institution is subject to approval

Question 31

What id housing loan is still outstanding when VL is reached?

Answer 31

Owner can use additional CPF savings from his OA ONLY AFTER * Current BRS is set aside in SA & OA for those below 55 * BRS set aside in RA, SA, & OA for those above 55.

Question 32

Owner can only further use CPF savings up to...

Answer 32

Withdrawal limit (WL) only

Question 33

WL

Answer 33

* Total amount all owners are allowed to use for property will increase by 20% of VL. No further CPF usage is allowed thereafter. * AKA 120% of the Valuation Limit