The transition of your CPF Special Account (SA) at age 55 marks a crucial milestone in your retirement planning journey. We're breaking down exactly what happens to your funds and how to optimise them for a secure future.
Closure of Special Account (SA) for Members Aged 55 and Above
As of January 19, 2025, the SA for members aged 55 and above has been closed. Savings from the SA have been moved to the Retirement Account (RA) up to the Full Retirement Sum (FRS).
Any remaining SA funds have been transferred to the Ordinary Account (OA).
Interest Rates
Members aged 55 and above receive an extra 2% interest annually on the first SGD 30,000 and an additional 1% on the next SGD 30,000 of their combined CPF balances.
Note: Extra interest on OA balances is capped at SGD 20,000.
These changes aim to better align CPF interest rates with the nature of savings in each account, ensuring that additional contributions continue to earn optimal interest and enhance retirement payouts.
Key Changes at 55: Where Your Money Goes
When your Special Account closes at 55, your funds don't disappear. Instead, they're strategically redistributed. The primary destination is your Retirement Account (RA), whilst any remaining balance may flow into your MediSave Account (MA).
In Singapore, the Central Provident Fund (CPF) Retirement Sum is a key component of the nation's retirement planning framework.
It determines the amount of savings CPF members should set aside to ensure a steady stream of income during their retirement years.
To help you better plan for your future, here are the retirement sums that are applicable to members who turn 55 from 2025 to 2027:
| If you turn 55 in | Your BRS is | Your FRS is* |
|---|---|---|
| 2025 | $106,500 | $213,000 |
| 2026 | $110,200 | $220,400 |
| 2027 | $114,100 | $228,200 |
If you are 55 and above, you can choose to top up your Retirement Account (RA) up to the current Enhanced Retirement Sum (ERS) for higher monthly payouts, regardless of when you turn 55.
Here are the ERS amounts for 2025 to 2027:
| Year | 2025 (Current) | 2026 | 2027 |
|---|---|---|---|
| Enhanced Retirement Sum | $426,000 | $440,800 | $456,400 |
Determination of the CPF Retirement Sum:
The CPF Retirement Sum is structured into three tiers:
These sums are reviewed and adjusted annually to account for factors such as inflation, changes in the cost of living, and increased life expectancy. The adjustments ensure that the retirement payouts remain adequate over time.
Maximising Your Monthly Payouts
CPF LIFE becomes your reliable companion for lifetime income. You have two main options to consider. The Standard Plan offers stable, lifelong payouts.
Meanwhile, the Escalating Plan provides increasing payments over time, helping you combat inflation.
Furthermore, timing is crucial. Starting your payouts at 65 gives you immediate access to funds. However, delaying can significantly boost your monthly income.
It's worth noting that topping up your RA can enhance your payouts and offer attractive tax benefits.
Healthcare Planning: Your MediSave Account
Your MediSave Account plays a vital role in managing healthcare costs. You can use it for:
Moreover, you can leverage MediSave to pay for MediShield Life and Integrated Shield Plan premiums, ensuring comprehensive health coverage during retirement.
Investment Opportunities
The CPF Investment Scheme (CPFIS) offers opportunities to grow your wealth through various investment vehicles. Nevertheless, remember that RA funds cannot be invested through CPFIS, so plan accordingly.
What You Should Do Now
Remember, early planning is key to a comfortable retirement.
Stay updated to Singapore Budget on changes and reliefs available for you and your finances too.
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