What are some considerations before transferring my CPF OA to SA?

Some considerations before you transfer from your CPF OA to SA include:

• The higher interest rate in SA (4%) as compared to OA (2.5%). Power of compounding is stark for a 1.5% interest difference over 30 years. $20,000 in SA and OA respectively will end up to be $41,951 in SA and $64,686 - a $22,735 difference in interests earned.
• Take full advantage of the extra 1% interest. The first $60,000 in your combined RA (if applicable), OA, SA and MA accounts earn extra 1% interest. If you are below age 55, the extra 1% is in your combined OA, SA and MA accounts for the first $60,000 in that order. It is limited to $20,000 from your OA and there is potentially lesser interest earned if combined SA and MA are less than $40,000.
• OA to SA transfers are irreversible. Once you transferred, you cannot transfer it back.
• No tax relief is gained from OA to SA transfers.
• More restrictive usage of SA funds. SA funds are only for pure retirement purpose and cannot be used for a housing loan and education loan.
• More restrictive in investment products investible with SA versus OA funds. Gold products, gold ETFs, Corporate bonds, Property funds, Shares, Fund Management Accounts, Higher risk (ETFs, ILPs, UTs) are not investible with SA funds.
• At age 55, you can withdraw any excess monies after you have set aside Full Retirement Sum (FRS) or Basic Retirement Sum (BRS) with property pledge in your CPF Retirement Account (RA). OA to SA transfer does not change the amount withdrawable.
  The move will include pros and cons and is advisable to assess all of the above carefully before you make your decision.

Once you transfer CPF OA monies to SA, it is irreversible. Your funds will not be able to be used for housing or paying for children's education. The investment options for SA are lesser as well, most strikingly, you cannot use SA to invest in equity. However, you will benefit from higher interest in SA, which, when combined with compounding, can really grow your retirement funds.

If you ever intend to transfer OA to SA, I would encourage you to do so early in your career, and then let compounding do the rest. Rebuild your OA so that in case you wish to get a property in future, funds will be available to let you do so.