SINGAPORE: On January 19, a pivotal change took place affecting approximately 1.4 million Central Provident Fund (CPF) members aged 55 and above—the closure of their Special Accounts. This move, first disclosed in Singapore’s Budget 2024, aims to enhance support for the retirement needs of the nation's elderly population.

Starting January 20, the CPF Board will notify affected members through letters, emails, and SMS where applicable. Members are encouraged to log into their CPF accounts, either online or through the CPF Mobile application, to check the status of their balances and see the transfers made to their Retirement or Ordinary Accounts.

The CPF Board has also raised alarms about potential scams, urging members to remain vigilant against fraudsters who may impersonate CPF staff or government officials. These scammers often employ deceitful tactics, soliciting personal information under the pretense of offering advice on CPF-related matters.

Key Changes Following Special Account Closure

With the winds of change blowing through the CPF structure, savings from Special Accounts will now be directed to the Retirement Account. Some members may accumulate balances that meet the Full Retirement Sum, thereby enhancing their retirement savings. From January onward, members will continue to earn the long-term interest rate, with Special, MediSave, and Retirement Accounts yielding a guaranteed floor rate of 4% per annum until March 31, 2025.

Any leftover savings in the Special Accounts will be transferred to the Ordinary Account, where members can access their funds at an interest rate of 2.5% per annum. However, to maintain eligibility for the higher interest rate of 4%, members have the option to shift these Ordinary Account savings to their Retirement Account, although the transfer is permanent.

Changes to the Enhanced Retirement Sum

Additionally, the Enhanced Retirement Sum, which supports members wishing to boost their monthly payouts in retirement, has been raised to S$426,000 this year. Members turning 55 in 2025 can look forward to CPF LIFE monthly payouts of up to S$3,300 at the age of 65, provided they contribute to the Enhanced Retirement Sum this year. The addition of this year-on-year increase allows members to make top-ups to further enhance their payouts over time.

Enhanced Matched Retirement Savings Scheme

For those looking to bolster their retirement savings, Singapore has also improved the Matched Retirement Savings Scheme. Since its inception in 2021, the government has matched every dollar of cash top-ups made to the retirement accounts of eligible members from ages 55 to 70. As of January 1, 2025, the age cap has been removed, and the matching grant has surged to S$2,000 per year, with a lifetime cap of S$20,000 per eligible member. This year alone, over 740,000 members can benefit from this scheme, doubling the figure from 2024.

Members wishing to know their eligibility for this scheme can easily check through the CPF platform. Notifications for qualified individuals will be sent out between February and March.

Conclusion

These significant updates to the CPF system are designed to provide better security and enhanced financial stability for Singapore's senior citizens. With the increasing complexity of retirement planning, these changes offer both opportunities and challenges, prompting members to better engage with their CPF accounts to secure their financial future.

Stay informed and smart with your retirement planning—every detail counts!