CPF Special Account Closure 2025: Understanding the Impact on Your Retirement Plans

February 27, 2025

If you’re turning 55 in 2025, it’s time to pay attention. 

The closure of the CPF Special Account (SA) could significantly impact your retirement plans—especially if you’re relying on CPF savings to grow your nest egg.

Announced during Budget 2024, this change has left many Singaporeans asking: 

What does this mean for my future? 

Adjusting your retirement strategy in light of these updates can help you maximise returns on your savings and protect against inflation.

In this blog post, we’ll explain what the CPF Special Account closure means for you, how it could impact your retirement plans, and provide actionable steps to help you move forward with confidence.

What Is the CPF Special Account (SA) Closure All About?

Starting in the second half of January 2025, CPF members aged 55 and above will no longer have a Special Account (SA).¹

Here’s what will happen starting in 2025:

• The Full Retirement Sum (FRS) will increase to S$213,000. This adjustment ensures that CPF savings align with rising living costs and provide retirees with adequate monthly payouts under the CPF LIFE annuity scheme.
  
• The Enhanced Retirement Sum (ERS) will increase to S$426,000. That’s 4x the Basic Retirement Sum.
  
• SA funds will be transferred to the Retirement Account (RA) once you hit age 55. This transfer helps you meet your Full Retirement Sum (FRS). Funds in the RA continue to earn the same attractive long-term interest rate as the SA (currently 4%).
  
• Any remaining SA funds (after meeting the FRS) will be moved to the Ordinary Account (OA), which earns a lower 2.5% interest but offers more flexibility for withdrawals and investments.
  

For those aged 55 and above today, your SA will also be channelled to the OA. 

For members under 55, your SA remains unchanged and continues to serve as a retirement savings vehicle. However, if you’re approaching 55 in a few years, you can plan ahead for the transfer of your funds to the RA and OA.

Why Is This Change Happening?

The CPF Board has explained that the SA's closure is meant to better align the interest rates with the intended use of each CPF account type.

• Higher interest for long-term savings: Accounts like the RA, where funds are locked in for the long term, will offer higher interest rates to reflect their less accessible nature.
  
• Lower interest for flexible savings: Accounts such as the OA, where funds are more readily available for withdrawal, will offer lower interest rates suited to their greater flexibility.

This update aims to clarify the application of interest rates and promote fairness.

This change will not reduce your overall savings. It reallocates them to better align with your needs.

How Does the Closure Impact You?

For CPF members aged 55 and above, here’s what happens when the SA closes:

1. Boosted Retirement Payouts: When your SA savings transfer to your RA, you’ll enjoy higher monthly payouts through the CPF LIFE annuity scheme. You can top up your RA to the Enhanced Retirement Sum (ERS) to further maximize these payouts.
   
2. Lower Interest for Remaining Funds: The OA offers lower interest compared to the RA or SA, which means less growth potential. However, its flexibility might align better with your financial goals.

3 Smart Moves to Maximise Your CPF Savings

Planning ahead for these changes can help you make the most of your CPF savings. Here are three strategies to consider:

1. Boost Retirement Payouts by Topping Up Your RA

To increase your monthly retirement payouts, consider transferring funds from your OA to your RA. This lets you earn higher interest with your RA, which can help grow your savings for retirement.

When you turn 55, the amount in your RA will determine your monthly payouts under CPF LIFE. Here’s how the different retirement sums work.²

• Basic Retirement Sum (BRS): This is the minimum amount you need in your RA to get basic payouts. In 2025, the BRS is $106,500.
  
• Full Retirement Sum (FRS): This is double the BRS. For 2025, it’s $213,000, and it gives you higher payouts.
  
• Enhanced Retirement Sum (ERS): This is the maximum amount you can top up to. For 2025, the ERS is $426,000, giving you the highest possible payouts.

By topping up to the ERS, you can significantly boost your monthly payouts. For example, a member turning 55 in 2025 who tops up to the ERS could receive monthly payouts exceeding $3,000 from age 65 under CPF LIFE.

📌 RA top-ups are irreversible and it's important to keep in mind that the amount needed for retirement has increased over the years. You can learn more about RSTU top-ups to plan your allocation. Feel free to reach out if you need help assessing whether this aligns with your financial and retirement goals. 

2. Keep Funds Flexible by Leaving Them in Your OA

If you anticipate needing access to your funds soon, keeping them in your OA might be the more practical option. 

While the OA offers a lower interest rate (2.5%), it provides:

• Immediate access to your funds for future needs, such as housing or education.
• The ability to invest through the CPF Investment Scheme (CPFIS), which could offer higher returns, albeit with risks.

📌 Example: If you foresee needing funds for a home renovation or your child’s tuition in the next few years, keeping money in the OA ensures it’s readily available.

3. Enhance Family Retirement Savings or Consider Market Investments

If you’ve met your FRS, consider these options for your excess OA savings:

• Transfer to Family Members' CPF Accounts: You can transfer your excess CPF savings to family members to help them reach their FRS or ERS, which can boost their future retirement payouts under CPF LIFE. These transfers earn the same 4% interest rate as the SA and lock the funds for their retirement.
• Withdraw and Invest in the Market: Alternatively, you can withdraw your OA funds to invest in other market options that may offer higher returns. However, investing comes with risks, so it’s important to assess your risk tolerance and investment horizon.

If you’re worrying about:

Will This Change Impact Your Savings?

You don’t need to worry—your savings stay exactly where they are. This adjustment is just a transfer of funds between CPF accounts, with no impact on your overall savings.

What’s Next for SA Investments After Closure?

Your existing CPF Investment Scheme (CPFIS-SA) investments remain untouched. When they’re sold or reach maturity, the proceeds will be directed first to your RA (up to your FRS), and then to your OA, based on your account limits.

How Do You Stay Updated on These Changes?

The Retirement Dashboard is your go-to resource. It provides a clear overview of your account balances and how your funds are distributed.

The Bottom Line

The CPF Special Account closure may feel like a big change, but with the right strategies, you can use it to your advantage.

Take the time to review your retirement plans:

• Log in to your Retirement Dashboard to estimate how funds will move.
• Explore ways to top up your RA, transfer savings, or invest OA funds with your family.
• Consult a Certified Financial Advisor for tailored advice.

Your retirement is a significant journey. With the upcoming CPF changes, now is the time to take proactive steps and optimize your savings.

We hope this guide gives you the confidence to navigate the CPF Special Account closure smoothly.

There’s so much more you can do to make the most of these changes and maximize your CPF savings. If you’d like to explore your options or get tailored advice, we’re here to help.

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We hope this article has helped you navigate the new CPF changes. Share this with a friend who might find this useful!

👋 Need further advice and support to secure your retirement plans? Book a complimentary consultation with us.

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Reference:

1. Closure of Special Account for members aged 55 and above in Jan 2025 | CPF Board
2. What is the CPF retirement sum? | CPF Board  

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_{The views expressed in this media do not necessarily reflect the views of PFPFA Pte Ltd (“PFPFA”). The information provided herein is intended for general circulation and not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use will be contrary to local laws or regulations. You should also note that the information presented does not have regard to the specific investment objectives, financial situation, or the particular needs of any specific individuals; and therefore, may not be appropriate to your individual needs. You should seek the advice of your financial adviser representative or a professional before making any commitment to purchase or invest in any investment product.}