My thoughts on the NEW CPF changes: No more CPF SA Shielding

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Budget 2024: CPF specific
1. Contribution rates for age 55-65 increased by +1.5% in 2025 (good)
2. Maximum Retirement Account increased to 4x Basic retirement Sum of $426,000 (good)
3. CPF Special account will be closed: SA will be transferred to RA up to FRS. Remaining SA goes to OA

What is the real impact?
Assuming you have $300,000 net in SA at age 55 in year 2025
$40,000 is reserved and will be transferred to RA
Net $260,000 was planned to be shielded

Before: 4% * 260,000 = $10,400 per year
After: 2.5% * 260,000 = $6,500 per year
Difference of 1.5% = $3,900 per year
Multiplied by your remaining years of life
e.g. 30 years till age 85 = 30 * 3,900 = $117,000 impact

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[HoneyMoneySG]

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[andrewgj]

I think you’re right in saying that the main takeaway is we cannot depend fully on cpf for our retirement. I’d actually go further now to say that cpf shouldn’t even be a core part of my retirement planning cos I have no idea what the system will look like 30+ years down the road. If anything, it’s a wake up call to be self sufficient and manage my own retirement and if I get something from cpf next time then it’s a bonus. But I cannot have a system that’s so prone to changes form the underlying safety net for my retirement.

[DerrickTay]

I don't think there is a need to blame anyone. The government is there to plug any loopholes. Same as the 2nd property no absd or decoupling. Moreover, all the financial videos out there should be treated as references, everyone should do their own homework.

I got to know Chris's video about 2 years back and did considered topping up but after researching a bit more, I realise it did not suit my circumstances. Hence I did not top up or transfer OA to SA. I know it's tough, but the silver lining is that you did not actually lose those money (capital). It is still in your cpf. A lesson learn is a wisdom earned.

Continue on the good work Chris.

[HG-knhb]

Why no mention of interest from MA to OA if MA amount is maximum?

[YuRiPrem]

Hi, after this CPF change, do you still recommend topping up MA first or focus on SA to hit FRS asap?

[WWK]

Now that SA is taken away, people aged 55yrs and above, eager to earn more interest will withdraw large sums of CPF monies. Making them vulnerable to scams and risky investments . Newspaper headlines aplenty. How is the govt protecting the senior's retirement funds with this sudden change in policy.

[JZoooZ]

The scary thing is that you do not the payout @65 until 65. What if CPF changes rule again that the payout after it starts will reduce due to this and that. CPF NEVER says it is guaranteed. Beware !!!

[tanpengjoo]

No matter how much c p f cash are still the KING, instead of retaining more cash for survival this changes are definitely a shot to many local breed who are working day to day to make ends meet and waiting for the day to see the fruit grow bigger but before members can pluck it the worms already rotten it.

[CheahKennycheah]

Govt did the right thing by closing the SA and ending SA shielding, should have done it years ago, only the rich benefit and most dont

[thedollarsman]

You can't expect rules to remain same forever.

[heleneteo]

hello, I intend to use my SA money (when its transfer back to my OA and i withdraw as cash) to pay off my remaining housing refund, in this way at least I got one task off my load. plus after the refund, it will be back to my OA acc. I am not a risk taker so not into investment.

[mzamilbr]

Bang I a Singaporean below 55 and I honestly don’t bother my CPF as I don’t depend on it.

[sgboon]

In my opinion, they should have knew way before hand or even at previous policy planning stage. The key here is, the number of people making use of this hack. Secondly, you can ask yourself if this hack was not wide spread in the online space, you think how likely the MP would bought it up?

[Simplejunk]

question: say 55, no more SA, all flow to RA. Extra cash go to OA, what can we do to use this OA? Invest invest but end up can do what? Buy house?

[Kid]

Why change the SA if only as little as 2% benefits from it?

[JenHope]

Previously people can top up money in the SA. So now people can no longer make use of the SA to
maximise the gain by topping up this account and then draw it all out at age 55.. now; meaning the SA high interest rate of 4% could bankrupt the government if everyone draws out their SA money at age 55 instead of transferring the money to RA, so some people retirement account will not have enough money for retirement..am I right.?

[Ana-gppg]

I am 60 yrs old, opted for BRS when I was 55. Still working, will my current SA goes to OA or RA in 2025?

[YewhuiHong]

No true. You can bring all to the new ERS which is now increase. You
Lost liquidity . If you bring all to ERS, you still get 4% . You don’t have to do shielding .

[renj]

yeah "you should worry about yourself first" is right. I think we shouldn't be looking at each other's bowls to check if we have more than each other but to check if others have enough

[aly]

I have my personal property + FRS in my SA at age 34.
I think it is wiser to get property 1st.
Nothing is risk free, no one can predict if a change of system or Sg goverment in the next election but as least one has a roof over one's head even if the entire CPF crashes.