What happens to my CPF Special Account when I turn 55?

CPF Special Account (SA) Closure at Age 55

When you turn 55, your CPF Special Account (SA) will be closed, and its funds will be used to create your Retirement Account (RA). This process is designed to consolidate your retirement savings.

RA Creation and Funding

• Funding the RA to FRS: Monies from your SA will first be transferred to your new RA to meet the prevailing Full Retirement Sum (FRS). For those turning 55 in 2025, the FRS is S$213,000.
• Excess SA Funds: If your SA balance exceeds the FRS amount at age 55, the excess funds will be transferred to your Ordinary Account (OA). These excess funds will then earn the OA interest rate (currently 2.5% p.a.), which is 1.5% lower than the RA rate (currently 4% p.a.).
• Shortfall in SA: If your SA balance is less than the FRS, all SA money moves to the RA, and the shortfall is covered by transferring funds from your OA to the RA to meet the FRS.

Liquidity Implications

The key difference is liquidity. Funds moved to the RA are locked in for monthly payouts starting from age 65 via CPF LIFE. Funds transferred to the OA remain fully liquid and can be withdrawn at age 55 (subject to withdrawal rules).

Investments in SA

If you have investments under the CPF Investment Scheme (CPFIS) in your SA, you do not need to cash them out early. When these investments are eventually liquidated, the proceeds will flow into the RA up to the FRS, with any excess going to the OA, following the same rules above.

Post-Closure Transfers

After the SA closes, you can voluntarily transfer funds from your OA to your RA to earn the higher 4% interest, up to the Enhanced Retirement Sum (ERS) limit (which is S$426,000 in 2025). However, this OA-to-RA transfer is a permanent, one-way transaction, further reducing your liquid cash at age 55.