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Money and Me: CPF Special Account Closure, Retirement Planning, and Investment Strategies with Kenny Loh

Recently, there has been a significant change in CPF regulations that impacts members aged 55 and above. We’re here to help you understand this transition and provide guidance on managing your funds effectively.

𝗪𝗵𝗮𝘁 𝗛𝗮𝗽𝗽𝗲𝗻𝘀 𝘁𝗼 𝗬𝗼𝘂𝗿 𝗦𝗔 𝗦𝗮𝘃𝗶𝗻𝗴𝘀?
Your SA savings will be transferred as follows:
☑️ Retirement Account (RA): Savings up to your cohort’s Full Retirement Sum (FRS) are transferred to your RA, continuing to earn at least 4% interest per annum. This ensures your retirement savings grow steadily. However, note that this 4% is not guaranteed and subject to adjustment by CPFB, although it is considered a risk-free investment guaranteed by the Singapore government for retirement purposes.
☑️ Ordinary Account (OA): If you have met the FRS, any amount exceeding your FRS is moved to your OA, earning 2.5% interest per annum and available for withdrawal.

𝗪𝗵𝘆 𝗧𝗵𝗶𝘀 𝗖𝗵𝗮𝗻𝗴𝗲 𝗶𝘀 𝗦𝗶𝗴𝗻𝗶𝗳𝗶𝗰𝗮𝗻𝘁?
For retirees relying on the 4% interest income from CPFSA, this change could be impactful. For example, assuming a retiree has $300,000 in CPFSA generating $1,000 per month in interest, the new changes will reduce monthly interest income to $625—a significant 37.5% drop.

To help you navigate this transition, below are the 5 options available:
✅Maintain Your OA Savings (Do Nothing)
✅Boost Your Retirement with Higher Payouts
✅Invest Your OA Funds (CPFIS)
✅Invest Your OA Funds Outside of CPFIS (Withdraw from OA as Cash and Invest)
✅Withdraw for Immediate Needs

👇 More detail of various options and solutions can be found at recorded interview below: 👇

🤔 Has your CPF SA account closed already because you turned 55 this year? Join Michelle Martin as she dissects how to make your CPF work for you when you turn 55.
🤔Should you keep your money in the 2.5% earning OA or move what you can to the RA for long-term 4%?
🤔What are the pros and cons of investing with your OA after age 55 either through CPF or in the open market?
🤔If liquidity of your CPF funds are your primary concern, what are your choices and what are the risks associated with each choice?
🤔How can you use your monies to purchase T-bills, dividend stocks, and annuities? What interest could you get with different asset classes based on today’s market.
💡 Plus, get smart insights into tax considerations, liquidity needs, and long-term retirement planning strategies.

 

 

Important: The information and opinions in this article are for general information purposes only. They should not be relied on as professional financial advice. Readers should seek independent financial advice that is customised to their specific financial objectives, situations & needs. This advertisement or publication has not been reviewed by the Monetary Authority of Singapore.

Published By:

Loh Kok Keong Kenny

Kenny Loh is a distinguished Wealth Advisory Director with a specialization in holistic investment planning and estate management. He excels in assisting clients to grow their investment capital and establish passive income streams for retirement. Kenny also facilitates tax-efficient portfolio transfers to beneficiaries, ensuring tax-efficient capital appreciation through risk mitigation approaches and optimized wealth transfer through strategic asset structuring.

In addition to his advisory role, Kenny is an esteemed SGX Academy trainer specializing in S-REIT investing and regularly shares his insights on MoneyFM 89.3. He holds the titles of Certified Estate & Legacy Planning Consultant and CERTIFIED FINANCIAL PLANNER (CFP).

With over a decade of experience in holistic estate planning, Kenny employs a unique “3-in-1 Will, LPA, and Standby Trust” solution to address clients’ social considerations, legal obligations, emotional needs, and family harmony. He holds double master’s degrees in Business Administration and Electrical Engineering, and is an Associate Estate Planning Practitioner (AEPP), a designation jointly awarded by The Society of Will Writers & Estate Planning Practitioners (SWWEPP) of the United Kingdom and Estate Planning Practitioner Limited (EPPL), the accreditation body for Asia.

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In compliance with the Personal Data Protection Act, Financial Alliance Pte Ltd (“FAPL”) seek your consent to collect and use your personal data (e.g. name, NRIC, contact numbers, mailing addresses, email addresses and photograph) for the purposes of and in accordance with FAPL’s Data Protection Policy, which can be found on FAPL’s website at https://fa.com.sg/data-protection-policy/.

根据《个人数据保护法》，鑫盟理财私人有限公司征求您的同意向您收集并使用您的个人信息。鑫盟理财将根据公司的个人数据保护政策所阐述的用途使用您的个人资料（例如姓名，证件号码，联系电话，邮寄地址，电邮地址和照片）。 该政策可在本公司网站上查寻，网址为 https://fa.com.sg/data-protection-policy/.

By submitting this form, you are deemed to have read and understood FAPL’s Personal Data Policy.

提交此表格，即表示您已阅读并理解鑫盟理财私人有限公司的个人数据政策