5 Myths about your CPF money that you must see!

Last updated on August 27th, 2019 at 02:07 pm

Dear friends, along the years you may also have heard some of these myths about our CPF money.

Some of them sound down right weird and some are pretty common misconceptions.

This post is to help you clarify 5 of them.


1) When you die, your CPF is given to your beneficiaries CPF


It will be given to the beneficiaries in CASH, confirm!

When anyone pass away, his/her CPF monies will be amongst the fastest to allow a cash out.

There is a small exception: For those who want to prevent their beneficiaries from receiving cash proceeds (for whatever reason), there is a special scheme to pay CPF proceeds out to beneficiaries CPF when they pass away. Apparently, this method is not even available online. It must be done over the counter.


2) When you die, the medisave money is taken by “the government”

I’m sorry, this one’s really funny! But it is incorrect.

When the person is alive, the medisave balance can be a lot. But after passing away, the now-deceased’s medisave suddenly gets  wiped out. This is a common situation that confuses the beneficiaries and the possible cause of the myth that the government takes the medisave away.

Actually, that medisave balance was likely used to pay off last hospital bills. If there were operations done, those bills can become quite large. Whatever remaining in the medisave will then be paid out as cash to beneficiaries.


3) With a will, you can “nominate” your CPF money


CPF monies do not form part of a deceased member’s estate and are not covered by a will.

This is rule is good in my opinion. It means your CPF is protected even from creditors (people/bank you owe money to).

Therefore, it is always recommended to do a CPF nomination in addition to a will.


4) CPF money is managed by Temasek Holdings or GIC

Nope. CPF money just buys into SSGS (Special Singapore Government Securities).

It is NOT directly transferred to GIC for management. Although GIC does manage the proceeds from SSGS for the government.

As for Temasek Holdings, it is owned by the Ministry of Finance and it manages a total separate government fund.

The following video is interesting.



5) CPF money cannot be used to pay house after 55

If you have enough CPFSA and CPFOA for the Full Retirement Sum (FRS), thats great. Once your FRS is filled, there may be remaining amounts in your CPFOA that can pay for your house.

Questions is if you have little CPFOA and don’t have enough for FRS, what will happen?

You can apply to “reserve some OA savings for home mortgage use” and not transfer it to RA.

So don’t worry.

Moreover, if you continue working after age 55, new CPFOA money will be earned and can be used for your house.


The Astute Parent

A parent who has a sharp acumen on sieving through 'alien' financial jargon to dish out bite size financial tips from a parent's perspective.