No more CPF Special Account for members aged 55 above from 2025. What to do?!?!?

I know I am late to the complaining party for the recent budget 2024 announcement on changes to the CPF! By now, most of you should have known that the complain is about CPF closing the Special Account for members aged 55 and above in 2025.

The change is giving me a headache not only on what to do now that SA shielding is not possible but also the changes I need to do for the CPF Calculator!

After burning a few weekends to code and debug, I am pleased to say that the CPF Calculator have been updated with the Budget 2024 change. 

This update will account for the close of Special Account when you reached the age of 55 and the money will go into your RA and OA respectively depending if you select FRS or ERS (4 times the BRS). Your monthly contribution post 55 will also go into the OA and RA accordingly as well.

Do note that this is in beta and can be turned on or off via the check box as shown above. Pardon me if you see any errors in the calculation and please do inform me of that via the chat or contact function.

With that out of the way, back to thinking what to do for my CPF when I hit 55 with this change.

This change is no doubt a bad news for people like me who are building up our CPF SA and OA in preparation for CPF shielding to squeeze in as much money as possible into Special Account post age 55. 

The 4% risk free "bank account" after hitting 55 is a real motivation for CPF accumulation. With that gone, I guess I will be less motivated to top up to my CPF. 

Apart from that, below are also 3 main considerations I am having with this change.

1) Consider stopping Housing loan refund to my OA.

I haven't been doing that ever since the interest rate rises and I will most likely not do that as well in the future when the interest rate falls. 

2) Consider "withdrawing" money from my OA

I have an outstanding housing loan and I will likely start to pay more of the mortgage with my CPF OA rather than cash. This is still going to depend on my mortgage rate and the risk free rate I can get.

3) Get better with investing!

Currently I only have my OA invested in T-bills. With shielding out of the way, I may start to consider taking more risk on my OA possibly via investing them in a globally diversified index fund. I am currently doing that now with my SRS account via Endowus. Hopefully with that I will become more comfortable with the risk and start allocating a portion of my OA to a globally diversified index fund when the interest rate drops.

So what are you going to do with your CPF account?

Thanks for reading and do support me on my referral page. Stay Safe and Happy CPFing!

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