cpf chalkboard
The easiest (and safest) way to be a millionaire.

As a Certified Financial Planner, whenever I even mention the word “investment”, people are way too eager to ask about “stocks/equities”, “bonds”, and “funds/unit trusts”, thinking that these are the best, sure-fire ways to financial security and financial freedom. But they are always surprised when I instead mentioned CPF. Although most people think CPF is a retirement tool, I’d like to think of CPF as an investment tool. What other investment is low-risk (or virtually no-risk) and has a guaranteed return of 2.5% up to 6%? What other investment is inflation-adjusted, commission-free, out of reach by creditors, and has an annuity payout that you cannot outlive? To learn more about CPF, please visit the CPF website.

Here’s an infographic showing you that an average Singaporean (monthly wage of $4000, assuming no wage increase) can be a CPF Millionaire in their mid-50s by just using one simple trick to maximise CPF. It also summarises 3 other common scenarios (even one with $0 wages) and the length of time it takes for all of them to be millionaires:



  • Average monthly wage of $4000 for all profiles except the last one.
  • No wage increases, no bonuses.
  • Does not account for the additional 1% on the first $60,000 or the additional 1% for those age 55 and above.
  • CPF interest rates remain at 2.5% to 4% throughout all years.




In each graph, the 31st year is demarcated. I used 31 years as a baseline for comparisons since in the first scenario, it is possible to obtain $1 million in 31 years. All the graphs stop once the total CPF amount crosses the $1 million mark. In the last scenario, there are no contributions; this graph just shows you the “magic” of compounding at 4%. If in all of these scenarios, year 0 begins at age 25, then all of these people would be able to retire anywhere between 56 and 73 years of age with at least $1 million dollars in their CPF account. How cool is that?!?!?!?


Tips on How to Maximise CPF and get >$1M in Less Time

1. Move funds to the SA (Special Account). The MA (Medisave) and SA both get a minimum of 4% interest per year. You can elect to move funds from the OA (Ordinary Account), which earns 2.5%, to SA. Please note that this election is irreversible and has consequences. Basically, you are trading flexibility, as OA is commonly used for housing payments, for an additional 1.5% increase in interest. If you are considering this and are not sure about the consequences, please consult CPF if you have any questions.

2. Leave your MA funds alone. I just had a day procedure done at one of the restructured hospitals and it cost over $1000, but I paid cash. Why? Because my MA earns 4% and my cash doesn’t.

3. Make use of the extra 2%. The highest interest rate for CPF is 6%. Currently, there is an additional 1% earned for the first $60,000 of combined CPF balances. This means if you have that $60,000 in SA (and nothing else), you’re getting 5% but if you have that same $60,000 in OA, you’re getting just 3.5%. CPF members aged 55 and above also earn an additional 1% extra interest on the first $30,000.

4. Top up your CPF. Under the Retirement Sum Topping-Up Scheme (RSTU), you can make cash contributions to build your own CPF SA (for members below age 55) or RA (for members age 55 and above) or the SAs/RAs of your family members/dependents. These top-ups are tax-deductible.

5. Make a Voluntary Contribution. You can make a non-tax-deductible Voluntary Contribution to your CPF account up to the Annual Limit ($37,740 for 2016), which is the maximum amount of mandatory and voluntary contributions to the total of all 3 CPF accounts in a given calendar year.

6. Don’t use funds in the OA to invest in the CPF Investment Scheme. According to a Straits Times article, most people are better off leaving their money in CPF rather than investing it through a CPFIS because most people through self-directed investing cannot beat the returns CPF guarantees.  

3 Comments on How Anyone Can Be A CPF Millionaire

  1. I don’t agree with #2 (“Leave your MA funds alone”) as a generalization, and let me explain why. If you are paying income tax (are in an income tax bracket above zero), if you are not already maxing out your tax reliefs, and if you are not hitting the CPF Annual Limit of $37,740, then you can make voluntary contributions to your CPF Medisave Account, with tax relief, as long as your voluntary MA contributions fit within the CPF Annual Limit. And that’s the smarter play.

    Let’s suppose you’re in the 7% tax bracket (typical of the median employee in Singapore), you are eligible to make a voluntary MA top-up with tax relief, and you have a $1,000 Medisave eligible medical expense. If you use MA to pay the bill then quickly make a $1,000 voluntary top up to replenish your MA, you save $70 on your income tax bill (7% of $1,000). You lose a month or two of interest depending on how quickly you replenish funds since CPF interest is computed monthly based on the minimum balance, but that’s only $7 (rounded up, and worst case). Maybe if you use a rebate credit card (and pay it in full) you can get a percentage or two back if you pay your medical bill that way, but the income tax savings is so big that undoubtedly using MA funds then quickly replenishing them is the smarter play.

    If you and your spouse/partner are in different tax brackets, then the spouse in the higher tax bracket is usually the one who should pay the medical bill (with Medisave) and then quickly replenish MA funds for tax relief. However, if one spouse is hitting the CPF Annual Limit but the other is not, then the spouse who is *not* hitting the CPF Annual Limit (but who is still paying income tax) should be the one to execute this maneuver. This maneuver only works if there’s some room below the CPF Annual Limit. The bigger the medical bill, the less likely it will fit within the CPF Annual Limit.

    This maneuver also works for MediShield Life and Integrated Shield base plan premium deductions from MA. Determine which spouse is eligible for the better MA tax relief, and that spouse should assume all the hospitalization insurance premiums…then swoop in with a MA top-up quickly after those premiums are deducted. (Set a calendar reminder.) In a few cases you might want to split MediShield Life/Integrated Shield premium deductions if both spouses are close to the CPF Annual Limit.

    Some people really cannot predict well whether they’ll hit the CPF Annual Limit or not, so this maneuver would be difficult for them.

    • Hi Timothy, Thank you for your comment. Yes, this was exactly the scenario mentioned in this article https://frugalinsingapore.com/cpf-top-ups-earn-risk-free-interest-and-tax-relief/. For those who only have enough money to either pay medical expenses in cash OR top-up their MA, then your strategy works. But it’s even better if one has excess money to do both – leave the funds in MA alone (earning interest at 4%) AND also make a voluntary contribution (earning the tax relief). I made this generalization because I took into account that most people who spend their MA funds, don’t do voluntary top-ups to their MA. Which is why I mentioned voluntary contributions in #4.

  2. So far i see quite a few websites talking about being able to achieve $1M in mid 50s. But these are all projected scenarios. How many average Singaporeans in real life are able to achieve this $1M CPF thingie in their 50s? (My emphasis is on average Joe or Jane, and not those high flyers earnings super income)

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