CPF going to see BIG OUTFLOWS in 2025? Consequence of NO MORE CPF SPECIAL ACCOUNT after age55

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Today I'd explain to you why I see potentially BIG outflows from CPF in 2025.
This comes after the news that CPF changes include the closure of special account SA after the age of 55. Interest rates you will get from cpfoa is only 2.5% and I'd show you many alternatives to park that money. Note, moving out OA after age55 is only IF YOU HAVE FRS in RA account.

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0:00 Introduction

1:19 Nobody benefits from cpf special account closure

4:02 Singapore savings bond for cpf savings

5:10 Offers for your CPF money

9:36 Insurance plans

12:23 Why people not doing now

#cpf #cpfshielding #cpfsa #cpfoa

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About Josh Tan:
Josh holds a degree in Accounting from NTU. In 2016, he co-founded the financial education website TheAstuteParent to provide detailed insurance plan analysis and financial planning tips.

As a ChFC Charterholder, Josh has agreed to be bounded by the ChFC®/S Code of Ethics. This includes, among others, acting in a professional manner when it comes to conducting due diligence on primary and secondary sources of investment-related data, and articulating his investment opinions based on his research and beliefs. Based on his research and analysis, he highlighted his beliefs and opinions, and illustrated the concept of time value of money, as of the time of the video.

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[joshconsultancy]

Note: Moving out OA after age55 is only IF YOU HAVE FRS in RA account.
ENGAGE Josh Tan on a fee for full retirement planning NOW - Hear the IMPROVEMENTS you can make IMMEDIATELY!

Today I'd explain to you why I see potentially BIG outflows from CPF in 2025.
This comes after the news that CPF changes include the closure of special account SA after the age of 55. Interest rates you will get from cpfoa is only 2.5%
and I'd show you many alternatives to park that money that may still exist then

[sydralz]

Sound logic. I also believe that there will be an exodus of funds. It will be good if banks or insurance companies will come up with plans to "replace Special Account", but I am skeptical; they can just continue to sell their ILPs or life plans and greatly benefit from any outflow. At the end of the day, the one on the losing side will be the regular retail customers.

[ahjack]

Thanks Josh. I probably will do that. Not just for the interest, but for the fact that after contributing for decades till age 55, we're deprived of the the prevailing extras to rejoice our remaining life or retirement. Enhanced RA top up and locking our money even more as "advertised"? No thanks.

[SWTAN-JEFFREY]

Parliament reported that total of 2% of cpf members 4.5m in 2023 = 90k members were tx from sa to cpfis before age 55 and then tx back to sa after 6 months in 2021
If 90k members with avg of $100k in sa, then, govt will save the 1.5% at about $135 millions yearly before compounding yet

[domatthew]

SA was a part of the citizen's retirement plan for donkey years so to remove it suddenly would be to destroy many years of well thought through planning and feels like someone robbed us of our money.

Ordinary account money cannot be used for SSB. Anyway, SSB is very much lower than SA interest.

[HoneyMoneySG]

Good sharing Josh! Especially on the FI offering products part.

[WWK]

The OA account interest rate should be raised if there is a need to retain funds.

Govt aware of the vulnerability of seniors losing retirement money to scammers and yet encouraging this outflow.

[jaywyn]

SGD money fund is already well above 3.7%pa beating any existing FD or saving accounts. Dont understand why would people consider putting in FD. If there's a disadvantage of money fund, that would be taking 2 or 3 working days to withdraw into bank accounts. But at least there's no other strings attached.

[Mr-WealthCare]

With increased ceiling of RA, we have the potential to boost max CPF Life payout to 3300 per month and for life. I see this is a positive thing. Ultimately, CFP Life is the best annuity plan around. This should be part of every retirement planning.

[davida]

That was my answer too: banks. Totally agree, deplete your OA n buy banks, good dividends n SP growth.

[cwmfubn]

This CPF change does not have benefits, but neither does it make the average Singaporean worse off. People who are really impacted by this change are those people who are CPF rich and now cannot do CPF shielding.
The govt is right to make this move as there is no way they can give a high FD-like interest rate yet give full liquidity/flexibility. This is a logical move for any business/bank, much less a govt, given the RA earns the same as SA.

[nicksim]

Pls be advised that once OA above 55 are withdrawn entirely, it’s irreversible to put it back for 2.5% again. What’s good now in the market may not be good in the long term.

[henrylau]

We need to be careful. What Josh mentioned is right, however, do note that: 1) When you move the OA fund to banks (which give higher yield), what happen when banks had too much funds, they will reduce the interests rate. This reduce rate may be lower than the OA 2.5%, then how? Can one shield back the fund back to OA? 2) Next, you take HDB loan against your OA fund, what about the "owing" + accursed interest? Can you really take out all the OA fund? (This is assuming once reaches age 55 and with SA being close.)

[alangoh]

Thanks Josh for creating this super informative video :)

[ktlim]

There will not be outflow cos many are broke, especially those sell hdb to buy ec n condo, actually nothing g much left inside

[viper]

one need to understand the risk of having too much money stuck with bank. right now SDIC is only insured SGD75k per bank account. This might be one consideration point if ppl will wan to yolo out money from OA without sufficent understanding of risk and reward by doing this. Thou there are talks about increasing the ceiling to SGD 100k, but there was no conclusive bill/policy decision made yet.

[BenAng-hshi]

One other reason why people do take out money from CPF OA or SA is that funds in CPF accounts can automatically compound unlike short FDs, Bond, T-Bills.

[kcchiew]

2025，after my sa being transfer to oa, I will still keep all my cpf money in oa. (Just want to live with simple life.)

[christophertan]

Thanks for your insights. You asked a couple of times "why would anyone want to leave money in the OA after 55 years old". There are many who are using their OA to pay existing housing loan. These people will still need to ensure they have sufficient money in OA right?

[SoloMetal]

Josh, what happened few years down the road, if the climate changes and we are back to a low FD rate 1% environment. What are the options for OA investing? Invest in CPF stocks?