Understanding CPF Changes at 55 & Beyond

During Budget 2024, it was announced that the SA for CPF members aged 55 and above will close in early 2025. This is to better align CPF interest rates to the nature of savings in each CPF account. 

The CPF Special Account (SA) was closed on 18 January 2025 for members aged 55 and above.

What happens to your CPF Special Account at age 55 ?

When a CPF member turns 55 years old, a significant change occurs in the way CPF savings are managed.

a) Creation of Retirement Account (RA) at age 55
  1. When a CPF member turns 55 years old, CPF automatically creates a Retirement Account (RA) for the member.
  2. The balance in the Special Account (SA) + Ordinary Account (OA) is transferred into the RA, up to the Full Retirement Sum (FRS) or Basic Retirement Sum (BRS) if you have a property pledge.
  3. The BRS is meant to provide you with monthly payouts in retirement to cover basic living needs, excluding rental expenses.
  4. The FRS is two times of BRS and can provide you with higher monthly payouts that also cover rental expenses. That is why when you turn 55, your CPF savings up to your FRS is set aside in your Retirement Account (RA) to provide you with monthly payouts in retirement.
  5. If a CPF member is 55 and above, it can top up the Retirement Account (RA) up to the Enhanced Retirement Sum (ERS) for higher monthly payouts. 
  6. The ERS is currently set at 4 times of the BRS. From 2025, the ERS will be raised to 4 times the BRS to provide members an option to voluntarily top up more to their RA in order to receive even higher monthly payouts in retirement.
  7. To help you better plan for the future, please click here to know the BRS, FRS and ERS that are applicable to CPF members turning 55 from 2025 to 2027. 
  8. As the ERS is increased every January, you can continue to make further top-ups to your RA every subsequent year.
  9. You can still hold your existing CPF Investment Scheme-Special Account (CPFIS-SA) investments. Upon sale or maturity after the SA is closed, the proceeds from the sales of  your CPFIS assets will go to the RA up to your FRS. The remaining amount will then be transferred to your OA.
b) Special Account (SA) is Closed at age 55
  1. The SA will no longer be used once the RA is set up.
  2. If there is any remaining SA balance after setting up RA, it remains in CPF and continues earning interest.
c) CPF Withdrawal After 55
  1. Any remaining savings in OA and SA after setting up RA can be withdrawn.
  2. Withdrawals depend on whether you have met your Basic Retirement Sum (BRS), Full Retirement Sum (FRS), or Enhanced Retirement Sum (ERS).
d) What Happens to SA Interest?
  1. Before 55: SA savings continue to earn 4% interest.
  2. After 55: Any remaining SA balance continues earning interest, but new CPF contributions do not go into SA.

2. CPF Contributions After 55: How Are They Allocated?

If a CPF member continues to work after 55, your employer will still contribute to your CPF. However, the distribution changes to CPF after 55 changes:

a) New CPF Allocation (No More SA Contributions)

As the Special Account is close, the Special Account (SA) stops receiving contributions after 55. Instead, CPF contributions will be channeled into Ordinary Account (OA), MediSave Account (MA), and Retirement Account (RA) (if you have not reached your Full Retirement Sum).

b) CPF Contribution Rates After 55

CPF contributions after 55 are allocated depending on the following age bands:

  1. 55-60 years: OA – 26%, MA – 10.5%, RA – 3.5%
  2. 60-65 years: OA – 12%, MA – 10.5%, RA – 3.5%
  3. 65-70 years: OA – 3.5%, MA – 10.5%, RA – 1%
  4. Above 70 years: OA – 1%, MA – 10.5%, RA – 0%

c) Retirement Account (RA) Contributions

If a CPF member has not met the Full Retirement Sum (FRS), part of your CPF contributions while continuing working will go into the RA.

However, once the FRS is met, all future CPF contributions for RA will go into OA instead of RA, earning the 2.5% interest on your OA.

3. What Happens to CPF Savings When a Person Passes Away?

When a CPF member passes away, their remaining CPF savings are paid out to family members.

a) CPF Nomination Scheme

If the deceased member made a CPF Nomination, the CPF savings are distributed directly to the nominees.

The payout will be in cash via bank transfer or cheque.

b) What Happens to the distribution of the CPF Savings If There’s No CPF Nomination?

However, if no CPF nomination was made, CPF Board will pay your CPF savings to the Public Trustee’s Office for distribution in cash to your family member(s) in accordance with the Singapore intestacy laws (for non-muslims) or Muslim inheritance laws (Faraid) in Singapore.

The rules, as outlined in Section 7 of the Intestate Succession Act, are as follows:

rule

Survivor

Absent

distribution of assets

1

Spouse

Children, parents

Spouse gets everything

2

Spouse and children

-

Spouse gets half and the children gets the other half in equal portions

3

Children

Spouse

Children get everything in equal portions. Grandchildren can claim their parents' share in equal portions if their parent is dead

4

Spouse and parents

Children

Spouse gets half while the parents get half in equal portions

5

Parents

Spouse, children

Parents get all in equal portion

6

Brothers and sisters (or children of the deceased brother or sister)

Spouse, children, parents

Brothers and sisters get equal portions. Their children can claim their share for them in equal portions if they are deceased

7

Grandparents

Spouse, children, parents, brothers and sisters or children of such brothers or sisters

 The grandparents shall take the whole of the estate in equal portions.

8

Uncles and aunts

Spouse, children, parents, brothers and sisters or children of such brothers and sisters, grandparents

The uncles and aunts shall take the whole of the estate in equal portions.

9

None

Spouse, children, parents, brothers and sisters or children of such brothers and sisters, grandparents, uncles and aunts

In default of distribution under rules 1 to 8, the Government shall take the whole of the estate.

The following assets are due to the beneficiaries of the deceased’s estate:
 
a. Discounted Singtel shares;
b. Properties bought with your CPF savings1;
c. Payout from Dependants’ Protection Scheme (DPS)2; and
d. Investments made under CPF Investment Scheme (CPFIS)3.
 
1 The treatment of the deceased’s share of the property is dependent on the manner of holding. If the property is held under Joint Tenancy, ownership of property will be transferred to the surviving owner(s). If the property is held under Tenancy-in-Common, the deceased’s share of property will form part of his estate.
 
2 You can make a DPS nomination with your DPS insurer or make a will to determine the beneficiaries of the DPS claim benefits. Without a DPS nomination or will, the benefits will be paid to the proper claimant(s). A proper claimant can be the executor of the deceased’s estate or a family member.
 
3 These will form part of your estate, except for insurance policies where if you have made a nomination with your insurance company, the death benefits from the policies will be paid to your nominated beneficiaries.

The legal next-of-kin will need to apply for a Letter of Administration or Grant of Probate before CPF Board releases the funds.

c) What CPF Balances Are Paid Out?

Included in the CPF Payout contains the following balances:

OA balance + MA balance + RA balance + Unused CPF LIFE premium.

The amount not Included in CPF Payout is made up of the following:

  1. CPF Investment Scheme (CPFIS) assets,
  2. HDB properties bought with CPF,
  3. Insurance payouts.

d) How to Claim CPF Savings

If the CPF member has made a CPF Nomination, CPF Board will contact the nominees.

If there’s no nomination, the family will need to apply for the release of CPF funds via the CPF Board.

4. How to Ensure a Smooth CPF Inheritance Process

A CPF member should do the following to ensure a smooth CPF inheritance process: 

  1. Make a CPF Nomination: This ensures your CPF savings are distributed according to your wishes.
  2. Update Your Nomination Regularly: Life events such as marriage, divorce, or having children may require updates.
  3. Inform Your Family About CPF Rules: Many people are unaware that CPF savings are not automatically included in a will.
  4. Ultimately, how much you set aside depends on your CPF balances and desired monthly payouts. It’s important to plan ahead by assessing how much payouts you need to meet your expenses in retirement. You can find out using the Monthly payout estimator.

Need CPF Guidance? We Can Help!

If you have any questions about CPF withdrawals, retirement planning, or estate matters, feel free to contact us for professional assistance.

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