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How CPF changes in Budget 2024 impact retirement planning

Concern over retirement adequacy has sparked changes to CPF accounts of members who turn 55

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    • The move to shift members' savings in the CPF Special Account to the Ordinary Account when they turn 55 and to close the former has sparked unhappiness.
    • The move to shift members' savings in the CPF Special Account to the Ordinary Account when they turn 55 and to close the former has sparked unhappiness. PHOTO: BT FILE

    Christopher Tan

    Published Mon, Feb 19, 2024 · 07:53 PM

    FOR years, CPF members were able to “shield” or prevent the money in their CPF Special Account (SA) from being transferred to their Retirement Account – by investing the money in excess of the first S$40,000 in their SA just before they turn 55.

    They subsequently sell the investment and move the proceeds back to their SA after their 55th birthday to enjoy the minimum 4 per cent a year interest, and the option to withdraw at anytime they want as long as they have their cohort’s Full Retirement Sum (FRS) in their Retirement Account (RA).

    But this so-called loophole was effectively plugged when Finance Minister Lawrence Wong announced last Friday (Feb 16) during Budget 2024 that the SA will be closed after CPF members turn 55.

    Money WisdomSingapore Budget 2024

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