Why is our CPF lock in and only return to us monthly when we reach 65. As promise we should be able to drawdown fully when we reach 55?

Hi,
During retirement, you will need a steady stream of income to meet your living expenses. Members are thus encouraged to leave their monies in CPF until their payout eligibility age when they can start receiving payouts to cover their retirement expenses.
Nevertheless, from age 55 onwards, you can withdraw your Special Account (SA) and Ordinary Account (OA) savings after setting aside your Full Retirement Sum (FRS) in your Retirement Account (RA). With a property which has remaining lease that can last you to at least age 95, you may also withdraw your RA savings (excluding top-up monies, government grants and interest earned) above your Basic Retirement Sum (BRS). Otherwise, you can still withdraw up to $5,000 of your SA and OA savings.

Members below the age of 55 also have some flexibility to withdraw their CPF monies for other purposes such as housing or investments. However, if you are receiving lifelong monthly pension or payouts from your life annuity bought with cash, you may be fully exempted from setting aside the Full Retirement Sum in your Retirement Account and need not join CPF LFE.

For more information on CPF LIFE, please visit the following link: https://www.cpf.gov.sg/Members/Faq/schemes/Reti...

Hope this clarifies!

Jennifer has a good answer. I have a long one LOL.
Do you know what's the Singaporean life expectancy? Last I checked, it was 84 for men, and 87 for women. Vs the age of 65, that roughly means your cpf payouts are over 19 years for men, and 22 years for women.

You know how long that is? Its enough for a grandson to make it through from age 0 to NS and beyond. And its even longer than the time required to double CPF SA (72/4 = 18).

So why is the payout age increased to 65? I guess Singapore learned from other countries like Japan - there are many cases of old folks outliving their saved pensions or provident funds.

The declining balance method no longer worked given the possibility of people living last 90 or even 100. I think there have been many arguments to show the 4% draw down method is also likely to be inadequate. Then you ask your kids for pocket money?

Back to reality. My mum also started on her cpf payout. I think she gets 800+ per month. And you know what? Its not enough, I still give her allowance to supplement her expenses and no, 300 per mth aint buying enough these days. And thats also after I take over paying the monthly utilities and other fees. Thats life, man.

But why focus only on why you can only start payout from 65? If you could complete FIRE, you dont have to depend on CPF. You can also use the system to your own advantage > I did a model and assuming I maintain my current pay over the next 20 years, it seems likely that I may even be able to leave 500k in the OA after transferring the BRS to RA.

Look on the brighter side of things.