You will be able to explain each regular outflow from your CPF and check it against what you agreed to.
When Hafiz labelled six months of his CPF history in lesson 2.2, he counted more outflows than he expected. There was the housing payment every month, which he knew about. There was a premium from his Ordinary Account he didn't recognise, another one from MediSave, and a third that appeared once and then not again. Each was a small number. Together they were a few thousand dollars a year leaving his CPF, and he couldn't have said what half of them were for.
Every outflow from your CPF should match something you signed up for or something the law signs you up for. This lesson goes through the regular ones so you can match each to its cause.
For most people who own a home, this is the biggest outflow. If you used CPF for your flat or property, your monthly loan instalment is paid partly or fully from your Ordinary Account, and it appears in your history every month as a withdrawal.
Check two things. First, that the amount matches your loan instalment, or the part of it you arranged to pay from CPF. Second, that you know what happens if your Ordinary Account runs short. If the balance isn't enough to cover an instalment, the rest has to be paid in cash, and your lender or HDB will expect it.
There's also a slower effect to understand. Money paid out for housing is no longer in your Ordinary Account earning CPF interest. That doesn't make using CPF for housing a bad choice, since most people need it to buy a home at all. It does mean each instalment has a cost beyond the instalment itself, the same idea as lesson 7.1 of How money works, Every dollar spent is a dollar not doing something else.
MediSave pays premiums for several kinds of medical cover, and each shows up in your history.
MediShield Life is the national basic health insurance, and its premium is paid from MediSave once a year. CareShield Life, the long-term care scheme, covers people born in certain years automatically and others who join; where it applies to you, its premium can also be paid from MediSave. If you have an Integrated Shield Plan, MediSave can pay part of its premium too, but only up to set limits. Anything above the limit has to be paid in cash, so a premium higher than the limit appears partly in your CPF history and partly on a card or bank statement.
Hafiz's MediSave entry was his MediShield Life premium, which he'd never thought about because nothing reached his bank account. The one-off entry turned out to be his Integrated Shield Plan premium, deducted once a year on the policy anniversary.
The CPF and Ministry of Health websites list the current premiums and withdrawal limits. Look them up there rather than relying on the figure in a brochure.
Some insurance schemes linked to CPF are paid from the Ordinary Account. Two you may meet are the Dependants' Protection Scheme, a term life cover for CPF members, and the Home Protection Scheme, which covers HDB flat owners who use CPF to pay their housing loan. Each charges a premium, usually once a year, and each appears in the history.
This was Hafiz's unrecognised premium. He was covered by both schemes and hadn't known. That's not a problem in itself, since the cover is real. But when he later reviewed his insurance, knowing about them changed the picture, and he'd have missed them if he'd only read his bank statements.
Here's the part many homeowners learn late. Money you take from your CPF for housing isn't gone for good. When you sell the property, you must refund to your CPF the amount you withdrew, plus the interest that money would have earned if it had stayed in your Ordinary Account. That interest is called accrued interest.
The refund goes back into your own CPF accounts, so it's still your money. But it comes out of the sale proceeds, which means less cash in hand from the sale than you might expect. The longer you've owned the property and the more CPF you've used, the larger the accrued interest becomes.
You don't need to calculate it. Log in to the CPF website and look at your home ownership details, which show the principal withdrawn and the accrued interest for each property. The rules on what you must refund, including what happens if the sale price is low, are set out there too.
CPF has many more uses and rules than these: investing with CPF, education, retirement payouts, top-ups and the schemes that start at 55. CPF Mastery: every account and the choices you control covers them. This course stays with what you need to read your statement and check what's leaving.
Hafiz ended up with a short list of outflows, each matched to a loan, a scheme or a policy. Writing your own list is the next step, and it's quickest with your transaction history on one screen and your loan and policy documents on the other.
List every regular outflow from your CPF and match each one to the loan, policy or plan it pays for.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).