How does closure of CPF Special Account from 55 affect my plan?

Besides the numerous goodies handed out by the government yesterday, the most interesting announcement made yesterday is the closure of CPF Special Account (SA) for those 55 years old and above. This means no more CPF shielding at age 55 from next year onwards!

What does that mean to me?

Not much really. While I would love to have that option, I have already considered the possibility that CPF shielding might not be available for me when I hit 55. I thought they might stop the use of CPF-SA for investing to close this loophole, but they went one up on me and just close the account!

When I ran the numbers a few years ago, one of my plans is not to do shielding. And with that, I would have left with little in my SA after transferring Full Retirement Sum to my Retirement Account (RA). I was also planning to withdraw from my CPF account from 55, so with the small sum left, my SA would be depleted in 3 to 4 years. Hence, there is minimum impact on this plan, given the small amount and small difference in timeline.

Oh, just in case you are wondering. Nope, I am not thinking of increasing the transfer amount to Enhanced Retirement Sum. At least not in the current plan, but I might change my mind in the future.

I re-run the numbers and as expected, there is a drop but not significant. What continues to have a larger impact on my numbers is still my investment return.

So the focus for me is still on achieving that return!

Looking forward to the release of results from iFAST, UOB, United Hampshire REIT, Venture and HRnetGroup next week!


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