I am planning to opt for the BRS option by pledging my property at 55.
After setting aside the amount for BRS, do I have to withdraw the remaining from CPF account as a lump sum or can I let them continue to be in my SA account to earn the interest and just withdraw $2-3k each month for my expenses? If yes, can this continue until the end of life?
If have to withdraw as lump sum as 55, what would be a good option to save the money in (might be at about 300-400k)? T-bills? Or FD?
"Opting for the BRS" has little directly to do with your CPF Ordinary, Special, or MediSave Accounts. It has everything to do with your CPF Retirement Account.
On your 55th birthday the CPF Board will create your new Retirement Account and attempt to fund it to the Full Retirement Sum (FRS). First, it will transfer dollars from your Special Account. Then, if necessary, it will transfer dollars from your Ordinary Account. The CPF Board will stop transferring dollars when the Full Retirement Sum is reached or when your Special Account and Ordinary Account are exhausted, whichever comes first.
To some extent you can prevent your Retirement Account from being funded to the Full Retirement Sum through these two options:
1. "Shielding." You can use the CPF Investment Scheme to "shield" Special Account and even Ordinary Account dollars. However, you'll have to leave behind at least $40,000 in your Special Account and at least $20,000 in your Ordinary Account since the CPF Investment Scheme cannot touch those dollars.
2. You can ask the CPF Board to leave some dollars in your Ordinary Account if you're servicing a mortgage from your Ordinary Account.
Assuming your Retirement Account is funded to the Full Retirement Sum "opting for the BRS" means you withdraw dollars from your 4% interest earning Retirement Account. You cannot leave dollars in your RA
and "opt for the BRS." The two concepts are the same thing: opting for the BRS means withdrawing dollars from your RA. Do you want to withdraw from a government guaranteed account paying 4% interest? Up to you!
You can withdraw dollars from your RA with or without making a property pledge/charge any time before CPF LIFE payouts start. You can start CPF LIFE payouts as late as age 70, the default. (Or as early as age 65, or any time in between.) You can withdraw up to $5,000 without making a property pledge/charge from age 55. And you can withdraw up to 20% (inclusive of the up to $5,000 prior withdrawal) starting from age 65.