My thoughts on the NEW CPF changes: No more CPF SA Shielding

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Budget 2024: CPF specific
1. Contribution rates for age 55-65 increased by +1.5% in 2025 (good)
2. Maximum Retirement Account increased to 4x Basic retirement Sum of $426,000 (good)
3. CPF Special account will be closed: SA will be transferred to RA up to FRS. Remaining SA goes to OA
What is the real impact?
Assuming you have $300,000 net in SA at age 55 in year 2025
$40,000 is reserved and will be transferred to RA
Net $260,000 was planned to be shielded
Before: 4% * 260,000 = $10,400 per year
After: 2.5% * 260,000 = $6,500 per year
Difference of 1.5% = $3,900 per year
Multiplied by your remaining years of life
e.g. 30 years till age 85 = 30 * 3,900 = $117,000 impact
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