Singapore Budget: CPF Special Account closure at age 55 removes overlap, stops 'shielding' hack that maximises interest earnings, say experts
Christopher Gee, senior research fellow and deputy director at the Institute of Policy Studies , said that since the Special Account and Retirement Account are both meant for retirement savings, there are some overlaps. Unlike the Ordinary Account, which can be used for housing purposes, members would not be able to withdraw money from the Special Account until they reach 55, or if there are other special reasons such as death, illness or permanent emigration.
This meant that most members would not have any money in their Special Account after their Retirement Account is created. This is because these members would have CPF savings beyond the Full or Enhanced Retirement Sum that they wish to retain in the higher interest-earning Special Account, rather than have them transferred to the lower-earning Ordinary Account as soon as they reach 55.
In response to a parliamentary question in 2022, Minister for Manpower Tan See Leng said about 2 per cent of CPF members in 2021 had invested their Special Account savings six months before turning the age of 55 and liquidated their investment six months after that.