On 19 January 2025, approximately 1.4 million CPF members aged 55 and above saw their Special Accounts closed down. This was a measure announced during the Singapore Budget 2024 last year – and gave CPF members about a year’s notice.
We look at various scenarios to explain what exactly happens to your CPF Special Account (SA) savings.
Read Also: 4 Ways That Closing The CPF Special Account Is An Elegant Solution For The Government
#1 You Have Not Set Aside The FRS In Your Retirement Account & You Don’t Have Enough SA Savings To Meet Your FRS
For those who have not set aside their Full Retirement Sum (FRS) in your Retirement Account, any Special Account (SA) savings will be transferred to your Retirement Account to meet it.
You don’t have any options or decisions to make. Following the transfer of your SA savings to your RA, your SA will be closed.
For clarity, those who opted to save the Basic Retirement Sum (BRS) are also deemed to have met the FRS through a combination of their BRS funds and their property pledge.
Read Also: Here’s What You Need To Know About Pledging Your Property To Meet The CPF Full Retirement Sum (FRS)
#2 You Have Not Set Aside The FRS In Your Retirement Account, But You Have Enough SA Savings To Meet Your FRS
If you have any remaining Special Account savings above your FRS, it will be transferred into your Ordinary Account instead of your Retirement Account.
At this point, since you have met your FRS, you can withdraw your excess OA savings in full. If you do not need these savings to cover your retirement expenses, you can choose to either leave it in your OA or withdraw the excess savings.
#3 You Have Already Set Aside Your FRS
If you have already set aside your Full Retirement Sum, all of your Special Account savings will be transferred to your OA. Of course, you can also withdraw your entire excess OA savings since you’ve set aside the FRS.
What To Do If You Have Withdrawable OA Savings
Since excess Special Account savings, above your FRS, goes into your OA, you will now earn 2.5% p.a. instead of the 4.0% p.a. in your SA. You can choose to leave your funds in OA, earning 2.5% returns until you eventually need to make withdrawals.
If you want to continue earning the same 4.0% interest that your SA was paying, you can choose to transfer your excess OA savings to your RA, up to the Enhanced Retirement Sum (ERS). In 2025, the ERS has also been raised to 2 times the FRS (instead of 1.5 times the FRS previously). This means it is likely that you can top-up all your remaining SA funds that went into your OA, into your Retirement Account.
According to CPF, those who set aside the ERS of $426,000 in 2025 can receive more than $3,000 per month in CPF LIFE payouts starting from age 65. If you choose to top up your RA, you will be sacrificing some flexibility in being able to withdraw your funds on-demand. Top-ups to your RA are irreversible.
Alternatively, you can invest your OA savings in an effort to earn a higher return. Especially since you are using funds earmarked for your retirement, you can consider invest in relatively safe investments such as Singapore Government Bonds and Treasy Bills (T-Bills), CPF Fixed Deposits or even bond funds.
Note that anything above the first $20,000 of OA savings can be invested.
You can also withdraw your OA funds to invest outside the CPF system.
Read Also: 8 Types Of Investments You Can Make Using Your CPF OA Monies Via The CPFIS-OA
You Can Potentially Benefit From Tax Relief By Withdrawing Your Excess OA Savings
If you are still working, you can potentially benefit from tax relief by withdrawing your excess OA savings.
If you have not met your Basic Healthcare Sum (BHS), you can withdraw your excess OA savings to top-up your MediSave Account (MA) to meet your BHS. At the same time, you can enjoy up to $8,000 in tax relief as well as continue earning 4.0% p.a. on your funds.
To continue strengthening your retirement needs, you can also choose to top-up to your SRS account instead to enjoy tax relief of up to $15,300. If you choose to do this, you have to ensure that you want to invest the amount, as SRS savings do not automatically earn a return (unlike CPF savings).
You also have to remember that you’re locking up these funds until your eligible statutory retirement age to make SRS withdrawals. While you can still make withdrawals before your statutory retirement age, they may come with some penalties.
Another important thing to note is that 50% of your SRS withdrawals will be taxable when you want to make SRS withdrawals after your statutory retirement age. For those above their retirement age, you can only make SRS contributions if you have not already started making SRS withdrawals yet.
Read Also: Withdrawing Your SRS Savings: Here’s Why You Need To Be Tactical About Withdrawals After Investing
The post CPF Special Account (SA) Closed Down For Those 55 And Above: What Happens After The Closure And What You Can Do appeared first on DollarsAndSense.sg.
