Retirement Account (RA)
Definition
A CPF account created at age 55 by combining OA and SA savings to fund lifetime payouts under CPF LIFE.
Key Takeaways
- The Retirement Account is created automatically at age 55 from Special and Ordinary Account balances.
- Earns a guaranteed baseline interest rate of 4.00% per annum, with extra interest on initial balances.
- Provides the core capital used to fund CPF LIFE monthly retirement payouts starting at age 65.
- The size of the RA is determined by BRS, FRS, or ERS targets selected by the member.
Detailed Explanation
The Retirement Account (RA) is a CPF account created automatically for Singapore Citizens and Permanent Residents when they turn 55. The RA is formed by merging the savings from the member's Special Account (SA) and Ordinary Account (OA) up to a statutory limit, which is set to establish their retirement payouts under CPF LIFE.
The amount transferred into the RA is capped by three retirement sums: the Basic Retirement Sum (BRS), the Full Retirement Sum (FRS), and the Enhanced Retirement Sum (ERS). RA funds earn a high guaranteed interest rate of 4.00% per annum, plus extra interest on the first S$60,000. These funds are locked until age 65, when they are converted into monthly retirement payouts for life.