As you approach retirement, managing your CPF funds efficiently is crucial for ensuring financial security during your golden years. With the closure of the CPF Special Account (SA), it’s important to understand how this change affects your retirement planning.
This guide will explore the various ways retirees and pre-retirees can optimise their CPF funds, taking into account their evolving financial goals and needs. From investment options to asset allocation strategies, we’ll break down everything you need to know to make the best informed decision for your retirement.
If you’re looking to grow your retirement savings with a low-risk, stable return, Syfe’s Cash+ Flexi SGD and Income+ portfolios are great options to consider. These portfolios combine both growth and stability, ensuring that your funds work hard for you, even in retirement.
What Does the SA Closure Mean for You?
When one reaches the age of 55, their CPF Special Account will be closed as they transition to the Retirement Account (RA), up to the Full Retirement Sum (FRS). This means that the funds in the Special Account will be automatically transferred to the RA, where they will continue to earn interest (the rate as of 2025 is 4%), and eventually support one in retirement. For individuals aged 55 and above, this marks a significant shift in how their CPF funds are managed.
No More SA Shielding
SA shielding was a “hack” used by some CPF members aged 55 and above to maximise the interest earned on their CPF savings. Since the interest rate on SA funds is higher than that on OA funds, many opt to keep more money in their SA. They would temporarily invest their SA funds to ensure that the RA was filled primarily with OA funds. Essentially, SA shielding protected your SA balance and allowed it to continue earning higher interest rates.
With the closure of the SA at age 55, these funds will no longer be shielded, and individuals will have to carefully consider how to utilise their SA funds moving forward. Some may choose to top up their RA or invest their CPF savings, depending on their financial goals and retirement plans.
Deciding What to Do with Your CPF Funds After 55
The closure of the SA requires individuals to make important decisions about how to manage their CPF funds in the RA.
You will need to figure out whether to top up your RA to the FRS, or even consider exploring CPF Investment Scheme (CPFIS) options for higher returns on your funds. Understanding the new system of Basic Retirement Sum (BRS), Full Retirement Sum (FRS), and Enhanced Retirement Sum (ERS) is crucial in making an informed decision.
The new system caters to different retirement goals, each linked to a specific sum of money that should be set aside for retirement. The BRS, FRS, and ERS define the minimum amounts of CPF savings required to ensure a steady income in retirement. The key difference between these three sums is the amount needed to receive different monthly payouts, with ERS providing the highest payouts.
BRS, FRS, and ERS Explained
Here’s a quick breakdown of the BRS, FRS, and ERS for 2025, and what they each mean for your retirement planning:
| Retirement Sum | What It’s For | Amount |
| Basic Retirement Sum (BRS) | Aimed at providing a basic monthly payout to support your retirement, with the option to pledge your home to meet this sum. | 2025 : S$106,500 2026: S$110,200 2027: S$114,100 |
| Full Retirement Sum (FRS) | Provides a higher monthly payout without the need to pledge any property. This is the target for those who wish to achieve a comfortable retirement. | 2025: S$213,000 2026: S$220,400 2027: S$228,200 |
| Enhanced Retirement Sum (ERS) | Provides the highest monthly payouts, designed for those who want a more substantial income in retirement. | 2025: S$426,000 2026: S$440,800 2027: S$456,400 |
Each of these sums is calculated to ensure that individuals have enough to cover their basic living expenses during retirement. The higher the amount in your RA, the larger the monthly payout you will receive, allowing you to better manage your financial needs in your retirement years.
For more information on how to manage your CPF funds, including the BRS, FRS, and ERS, you may visit the CPF Retirement Planning Page.
Understanding these changes and planning for your retirement needs will give you greater control over your financial future.
So, What Are Some Ways to Grow Your CPF Funds After 55?
Once you reach the age of 55, your CPF SA savings will be transferred to your RA, and you may have up to 10 years to optimise and grow your funds before you begin withdrawing them at age 65. During this period, there are several options available for growing your CPF funds, each with its own set of benefits and considerations.
Below are some effective strategies you can pursue to maximise the growth of your CPF savings.
Option #1: Top Up Retirement Account Up To Enhanced Retirement Sum
One of the most effective ways to grow your CPF funds after 55 is to top up your RA to the ERS, which currently stands at S$426,000. The ERS offers a higher payout at age 65, and any funds in the RA will earn an attractive interest rate of 4% per year. This is a good way to make your CPF savings work harder for you, especially as the 4% return is relatively high compared to other investment options available to you within CPF.
Additionally, topping up to ERS can help you secure a higher monthly CPF Life payout in retirement.
Option #2: Leave Funds in Ordinary Account
If you prefer to have more flexibility and liquidity, leaving your savings in the OA is an option. Funds in your OA earn an interest rate of 2.5% annually, which is lower than the ERS or RA interest rate, but still guaranteed. This option offers flexibility, as you can withdraw from your OA balance at any time if necessary, provided the funds are not allocated for other specific uses (such as housing or education). While the return is not as high as the ERS option, it may suit individuals who need access to their funds for specific purposes before the age of 65.
Option #3: Withdraw Funds and Invest Them Yourself
For those who are comfortable taking on more risk and want the potential for higher returns, withdrawing your CPF funds and investing them outside of the CPF system is an option. By doing so, you get to have more control over your funds and potentially reap more than what the OA offers, given that you are savvy enough to balance your portfolio on your own.
(Note: While this option offers potentially higher returns, it also comes with comparatively higher risks. Returns will be subject to market movements.)
Weighing The Growth Options For Your CPF Funds After 55
| Option | Pros | Cons |
| Top up RA to ERS to earn 4% | – Decent returns (4% per year)- Ensures higher monthly payouts- Guaranteed by CPF | – Funds are locked in until retirement- Limited liquidity before age 65 |
| Leave funds in OA | – Flexible and accessible- Lower risk- Relatively simple to manage | – Lower returns (2.5% per year)- Funds may not grow quickly enough and could devalue due to inflation. |
| Withdraw and Invest | – Potential for higher returns- Portfolio diversification- Passive income flow- More control over your funds | – Potentially higher risk due to market fluctuations- Returns are not guaranteed |
How Investment Returns Can Impact Your Retirement Savings
To illustrate the potential growth for each option above, let’s assume an individual has S$100,000 in CPF savings in excess of the FRS at the age of 55. Below is an illustration of the growth of their savings over 10 years, considering the returns for each option.
The chart above demonstrates how your investment decisions can yield vastly different returns.
As seen from the chart above, leaving your CPF funds in your OA will yield the lowest returns (S$128K), given that the OA only offers an interest rate of 2.5%. In comparison, topping up your RA to the ERS will yield a slightly higher return (S$148K), as its annualised return is 4%.
And if you choose to take matters into your own hands and invest your CPF SA funds with Syfe, you have several viable options. With Syfe’s Cash+ Flexi (SGD), assuming an annualised return of 3.0%, you stand to reap S$134K. And with Syfe’s Income+ portfolio, assuming an annualised return of 5%, a S$100,000 investment will grow to S$163K at the end of 10 years.
And if you diversify your portfolio slightly, with a suggested allocation of 60% of your funds in Syfe’s Income+ and 40% in the Core Equity100, assuming an annualised return of 7%, you stand to earn S$197K by the time you turn 65. Diversifying your retirement portfolio typically allows you to grow your wealth faster and yield greater rewards.
Note: These projections are based on the assumption that the funds are left to grow without withdrawals, and are compounded annually. Rates for Cash+ Flexi (SGD), Income+ and Core Equity100 are not guaranteed and subject to market changes. Past performance is not indicative of future results, and investments are subject to risks, including the potential loss of capital.
Explore Syfe’s Portfolios
Syfe Cash+ Flexi SGD
Syfe Cash+ Flexi (SGD) is designed to make your money work harder for you. Compared to leaving your CPF funds in OA, Cash+ Flexi (SGD) offers potentially higher returns with the added benefit of no lock-in period.
- Net Projected Return: 3.3% p.a.
- Minimum Sum: None
- Composition: Cash+ Flexi (SGD) invests in low-risk options like short-term deposits and high-quality debt, aiming to grow your savings at a rate that outperforms current market interest rates.
- Liquidity: Very high (there is no lock-in period and you can withdraw your funds any time)
- Why it is suitable: Suitable for investors with a very low risk appetite or those looking for a place to park their cash for short-term needs and goals.
Syfe Income+
Syfe’s Income+ is designed to generate consistent passive income for investors. It focuses on a diversified mix of fixed income assets, targeting a yield of around 5-6% annually. The portfolio is suitable for retirees or pre-retirees who prioritise stable income generation over high growth.
- Monthly Payout: 5.0-6.0% p.a.
- Minimum Sum: S$5,000
- Composition: A diversified portfolio of fixed income, spreading across different maturities and credit sectors. The portfolio is constructed using PIMCO’s best-in-class active funds.
- Liquidity: High (there is no lock-in period and you can withdraw your funds any time)
- Why it is suitable: Ideal for individuals approaching retirement, seeking consistent income with moderate risk
Syfe Core Equity100
Syfe’s Core Equity100 focuses on growth through 100% equity investments, primarily in equity stocks. This portfolio is designed for those with a higher risk tolerance and a longer investment horizon.
- Returns: 10.56% annualised returns (8 years)
- Minimum Sum: None
- Composition: 100% in global equities. The portfolio is constructed using equity exchange traded funds (ETFs) or index funds that collectively invest in over 5,800 stocks from the world’s top companies.
- Liquidity: High (there is no lock-in period and you can withdraw your funds any time)
- Why Suitable: Ideal for individuals who are comfortable with market volatility and seeking long-term growth
The Core Equity 100 is well-suited for individuals who are comfortable with market fluctuations and are looking for significant capital appreciation. Balancing this alongside a fixed income portfolio can help boost portfolio growth while tempering volatility.
*Data is valid as of January 31, 2025. Returns are in SGD. Past performance is not indicative of future returns.
Take Control of Your Retirement Journey Today
Understanding how to optimise your CPF funds as you near retirement can provide peace of mind and a more secure post-retirement future. The SA closure doesn’t entail a difficult transition if you plan ahead and make smart investment decisions. The closure of your CPF SA and the transfer of funds to the RA is automatic, so you won’t need to take any action. But planning ahead and knowing what to expect from the closure will help ensure that your retirement savings continue to work for you in the long run.
By leveraging the CPF system effectively and exploring additional investment strategies, you can ensure that your retirement funds will grow and last. If you’re looking for a simple, low-risk solution to grow your savings, consider Syfe’s Income+ — designed to help retirees and pre-retirees optimise and grow their CPF funds with steady, reliable returns.
Consider Expert Guidance With Professional Investment Advisory
While it’s possible to manage your investments on your own, seeking advice from a financial advisor can be an invaluable step toward achieving your retirement goals. Financial experts can assess your current situation, evaluate your risk tolerance, and help you create a tailored investment strategy that aligns with your objectives.
For those transitioning into retirement, Syfe’s team of experts offers personalised portfolio management services that can help you make informed decisions. With their guidance, you can select the best investment options for your financial needs, ensuring that your funds grow efficiently while keeping risk at an acceptable level.
By exploring these strategies, you can enhance your retirement savings and ensure your funds continue to grow beyond the CPF, setting you up for a financially secure future.
Start investing with Syfe today and take control of your retirement savings.
Read More:
Top SRS Investment Options to Grow Your Retirement Savings
Guide to Supplementary Retirement Scheme (SRS) in Singapore: What It Is and How to Maximise It
5 Things Singaporeans In Their 50s Should Be Doing For A More Secure Retirement
CPF vs SRS Top-Ups: Which to Choose and What’s the Difference?
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