Loo Cheng Chuan -- the founder of 1M65, the movement that teaches couples how to save S$1 million in their CPF accounts by the age of 65 -- has dropped a new video.

Loo's video touches on the impending closure of Special Accounts for CPF members from the age of 55, which has been covered by other finance influencers over the past week.

But Loo's content is slightly different: He shows how, if you're a 55-year-old CPF member in 2025, you can work with the policy change to get a monthly CPF Life payout of S$4,420 until the day you pass away.

All without the need to exploit a policy loophole.

Make use of the raised Enhanced Retirement Sum

Once your Special Account is closed, Loo's advice is to transfer your Ordinary Account savings into your Retirement Account up to the Enhanced Retirement Sum which has been raised to S$426,000 starting next year.

In other words, you max out the amount you can store in your Retirement Account when you hit 55 and let your money compound over 15 years.

When you hit the age of 70, you can withdraw S$4,420 per month for life under the Standard CPF Life plan.

The CPF Board said that it raised the Enhanced Retirement Sum for such a purpose, "to provide members an option to voluntarily top up more to their RA in order to receive even higher monthly payouts in retirement".

But what if I want to receive payouts from age 65?

The CPF Board actually answered that question on its website.

The monthly payout will be about S$3,330:

"The ERS in 2025 will be S$426,000. A member turning 55 years old in 2025 can receive about S$3,330 per month of CPF LIFE payouts at age 65, if he chooses to top up to the raised ERS, up from about S$2,530 today."

Caveats

In his video, Loo made a couple of caveats.

For example, this plan only works for CPF members who can afford to park their money in their Retirement Account, which is irreversible.

Or, in Loo's words, "You will not see it again."

A CPF member might need to keep their savings in their Ordinary Accounts so that they can withdraw it for urgent expenses. This plan would not work for these members.

This plan is also open to what Loo calls "policy risk".

As a national savings scheme, the CPF system is subject to policy changes (the closure of Special Accounts is an apt example) that might affect your own retirement timeline.

Initial confusion over policy change

Loo, who is also known as the "CPF millionaire", told Mothership that when the policy change was announced at Budget 2024, he as well as the 30,000-strong 1M65 community were shocked.

"There were a lot of confusion and poor understanding of the impact of the changes initially," he said, noting that the CPF Board also announced provisions that help to cushion the impact, which he covers in his videos online.

The closure of the Special Account for members from age 55 effectively cuts them off from higher interest rates that are also guaranteed.

Loo said this reduction of risk-free interest rates would have "some financial impact" on his own retirement years.

However, he can mitigate the impact with other commercial investments.

The same is also true for CPF members who are financially savvy.

"My concern would be the older CPF members who cannot accept investment risk and are less well-versed with other options out there. We have to step up our efforts to help them handle this change."

You can watch Loo's video in full below where he explains the plan in detail:

Top image credits: CPF Board, Canva Pro