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$1m in CPF by age 65? What about $1.2m?

Monday, August 15, 2016

An article in the newspapers on one person's goal to have $1m in his CPF account by age 65 generated quite a bit of interest. 

I commented on my FB wall that not everyone has the financial ability to do what the person does but it shouldn't stop us from trying. 

Even if we should just do a fraction of what he does, I am sure we will be financially more secure in future.

After reading the article, I decided to estimate what I might have in my CPF account by age 65.

The estimate will ignore the effect of the extra 1% interest on first $60K of our CPF savings as well as the additional 1% interest on the first $30K once we reach 55 years of age. 

Of course, I am also ignoring the possibility that interest rates for our savings in the CPF could change in future.

My CPF accounts at the end of 2015:

OA: $418K

SA: $200K
MA: $50K

Assuming that I stop contributing to my CPF account from 2016, I should have at age 65:

OA: $652K
SA/RA: $438K

MA: $109K

Total by age 65: 


Although I will no longer have mandatory contributions to my CPF, I intend to max out the CPF annual contribution cap for members by doing voluntary contributions annually, in the process maintaining a meaningful percentage of investment grade sovereign bonds in my investment portfolio. 

So, I would probably end up with more than $1.2m in my CPF accounts by age 65, all else remaining equal.

I am making good use of the CPF to form a cornerstone in my retirement funding strategy. 

This safety net gives me peace of mind.

If AK can do it, so can you!

Related posts:
1. Use CPF savings or cash to pay?

2. How to upsize $100K to $225K?
3. A cornerstone in retirement funding.
Read newspaper article: here.


Singapore Man of Leisure said...


I think this post would serve more than your intended the CPF thing...

It provides greater clarity to the context and perspective to your cash positions. Those who like to shadow your positions better know how to adjust their position sizes in accordance to their situation.

As you have already shared the range how much you made per month before your "retirement", people can do the math where the bulk of your CPF contributions came from ;)

The smarter ones can make an educated guess which asset class that is.

For a person with a penchant to wear a mask, you reveal a lot!

AK71 said...

From my FB wall,

Alvin Tan:
"Why would one want to put $1.2m in your CPF when you cant take out the money anytime you require...How much does the CPF give back to you monthly when you are 65?"

Assi AK:
"If our CPF savings exceed the FRS by age 55, we can withdraw the excess. The balance goes into an annuity that will pay us for life from age 65.
"If we do not believe in having risk free and volatility free investment grade bonds in our portfolio and if we do not believe in having an annuity in retirement, then, we won't believe in the CPF."

AK71 said...


If you think about it a bit more, it is really because I wear a mask that I dare to reveal more in my blog. ;)

When I sold my previous home, I refunded to my CPF-OA whatever I borrowed plus the accrued interest. That is why my OA has so much money: How did AK amass so much money in his CPF-OA?"

All of us have different circumstances and we have to be careful not to bite off more than we can chew. :)

Unknown said...

Hi AK,

It's the first time I am commenting on your blog. Thanks for sharing your insights, especially on how to manage CPF funds better.

There was a comment above "For a person with a penchant to wear a mask, you reveal a lot!" I gotta agree with it. For instance, you have revealed above that your age currently is 45 :)

Best wishes.

AK71 said...

Hi Vikas,

Alamak. Suddenly feeling naked!

I think I must go into hiding now. -.-"

Singapore Man of Leisure said...



I think I will give you a new nickname:


AK71 said...


"Masked nudist". More accurate.

If people hide their faces, they would probably feel less fearful about being naked.

Maybe, I was inspired by the headless models on the packaging of male underwear. ;p

K said...

Hi AK,

Is there a special account amount cap? Say you do a voluntary contribution of $10k now, will 30% still go into the special account?


Singapore Man of Leisure said...


As you command, me lord!

"Masked nudist" it shall be :)

It's opportune time to update the nick names I dish out.

Lots of new bleeding hearts popping up. Even I get confused who is who now?


Kevin said...

Hi AK,

May I know how do I find out the maximum amount to max out the CPF annual contribution cap for members(employees and self-employed) under the voluntary contributions category?

Is it based on the CPF Annual Limit which is $37,740 as of year 2016?

AK71 said...

Hi Kevin,

Yup. The yearly mandatory and voluntary contributions together cannot exceed the annual limit. :)

AK71 said...

Hi K,

Voluntary contribution? The allocation would depend on our age.

I shared the table here:
Did CPF top ups but denied payment.

foolish chameleon said...


the recent article of Mr Wong in ST.
he mention that he will achieve 1mil by 55years old..
currently he has only <100k in cpf.
he intend to max out his SA to 161k (transfer all his OA) and restart his contribute to OA mthly (also max contribution yearly)
he has only 23years left to hit 55 (32 yrs old now)

from my rough calculation his OA + SA compounded, cant really hit 1mil by 55..
if he had > 30years to go, maybe possible..

or, did i assume something wrongly?

AK71 said...

Hi fc,

I think he is trying for $1m by age 65 or did I remember it wrongly?

Bigcatblue said...

Hello AK, I learned a very interesting perspective on how to use SA/AO account to get better than a 10 years Singapore bond return and withdraw that amount when I am 55. Thank you. This is a good article, as usual.

AK71 said...


I am glad you enjoyed my self talking session. ;p

AK71 said...

From my FB wall:

Jeremy Yeo:
Hi AK, first of all i would really appreciate if you will be able to clarify the below:

1) understand that if you have done MC, VC and MS Top Up before age 55 and hit the FRS, then whatever is exceeding the FRS can be withdrawn as a lump sum.

2) If above is true, but also we do hear that differed withdrawal is good and provided we are still employable after age 55. In this case, are we still able to withdraw the lump sum (excluding the FRS/ERS) either in 60 or 65 yrs old?

3) Based on another post you have regarding a reader's dad did MS Top up after 55 yrs old, he is not eligible to withdraw the lump sum as by age 55 yrs old, his dad had not yet reached the FRS amount for excess withdrawal? Is this correct?

Assi AK:
1) Yes
2) Yes
3) Yes

Kiki said...


Would like to know whether my understanding is correct. I am aged 36 and have tsf all my oa to sa. If I contribute monthly 500 to oa then do a tsf to sa to enjoy higher interest, does this considered cash top up and go straight into ra? My intention is to get a higher payout at 55. Thanks

AK71 said...

Hi Kiki,

Voluntary contributions (i.e. that goes to OA, SA and MA) will not get income tax relief like MS Top Up. OA to SA transfer will also not get income tax relief like MS Top Up.

Your method will not get income tax relief but your funds will not be automatically earmarked for your CPF-RA at age 55 either.

Kiki said...

Thanks a lot for your explanation. I miss out on that of tax relief. Thanks for alerting me. So is either tax relief or higher payout. Cannot both at the same time.

Ms Long said...

hi, been reading your articles. on this topic of CPF OA/SA - thought i'd just add my 2 (mini) cents of view. Not sure if it has been shared before (by you or your readers. If it has, please excuse me for repeating and for not combing through your blog thoroughly :p

In this current LOW interest rate environment, i think it does make sense to try to max out the SA thus the multiplying effect of time etc. (and for some, the tax relief)

However, readers (i think u r exempted since you are financially very secure ;)) need to bear in mind that this current interest rate environment may not stay this way.

Some 15-20 years ago, i remember my first home mortgage interest rate was in the region of 5+%. While it is hard to imagine interest rates going back to this level, never say never. At that time, who would have thought that interest rates will be this low and stay low for a prolonged period of time?

Anyway, back to what i want to say. in terms of transferring from OA to SA, i would stop to think about the situation i am in. as an eg, If I intend to buy a property some time in the future or am servicing my mortgage now, i would choose to leave a certain amount of $ in my OA which can cover X months (i am conservative, and would look at covering 24-36 months; some may prefer shorter period) of loan payment instead of transferring all to the SA. I treat it like an emergency -- in case, lose job, at least don't have to worry about mortgage. or if interest rates suddenly spike, CPF can cover the increase if cashflow is tight.

then whatever is left, i may transfer to SA given the current interest rate environment.

i hope your readers assess their financial situation carefully before making any transfers, cos the transfer is irreversible :)

AK71 said...

Hi Ms. Long,

It is always good to have thoughtful reminders like yours even though we have discussed the topic before:
4 ideas related to housing loans.

Yes, I remember when I paid off my home loan many years ago, I was paying 5.1% in interest:
Don't think and grow rich.

The only constant in life is change. ;)

Ms Long said...

hi AK, i knew it! must have been discussed before .... just that i missed it. your memory is very solid leh .... can just dig out the old articles so quickly :)


AK71 said...

Hi Ms. Long,

Nah. My memory is not that good.

I just use my blog's secret weapon, the "Search" box! ;p

The "Search" box at the top of my blog is not only for readers. It is for me too. ;p

Kevin said...

Hi AK and Ms Long,

What was the interest rate for CPF OA and SA some 15-20 years ago? -.-"

AK71 said...

Hi Kevin,

20 years ago, interest rates were higher.

The base interest rates we see today started from 2H 1999.

See: CPF Interest Rates History.

AK71 said...

The Special Account was introduced in July 1977.

The Medisave Account was introduced in April 1984.

The Retirement Account was introduced in January 1987.

From 1 Oct 2001, the Medisave, Special and Retirement Accounts earned additional interest of 1.5% points above the CPF interest rate paid for Ordinary Account.

From 1 January 2008, an extra 1% interest is paid on the first $60,000 of a member's combined balances, of which up to $20,000 comes from Ordinary Account.

From 1 January 2016, for CPF members aged 55 and above, an additional extra 1% interest is paid on the first $30,000 of a member's combined balances, of which up to $20,000 comes from Ordinary Account.

Breakfive said...

I am an avid CPF fan and calculator as well.

Since we both share the same hobby ie CPF , i thought i will sadly let you know that your CPF MA will not grow to 109k as predicted due to the max ceiling cap so the interest on interest earned on MA will earn a lesser interest of 2.5% as this interest earned will be transferred to OA.

If i got it right, your CPF at 65 will be like this (assume cap holds)
OA - 761 k
SA - 438 k
MA - 49.8k

Good news is you still hit S$1.2 m in CPF !

foolish chameleon said...

hi breakfive,

what is the ceiling on the MA?
and the interest , before and after the ceiling is achieved?

AK71 said...

Hi Breakfive,

Wah! You good!

What if they raise the ceiling for the MA at a faster clip yearly? Unfair question, I know. Bad AK! Bad AK!

However, it is a fair assumption and I hope it happens too. ;p

Breakfive said...

Hi AK,

we are CPF hobbyist lah... Anyway, some more nibblers on CPF..

Not many people know this but the CPF minimum sum is going to grow over the next few years.
CPF Board has stated basic retirement sum is going to rise from 80.5k in 2016 to 90.5k in 2020. Approx S$2.5 k per year which works out around 3% pa. Dunno where i read it but it is stated before.

So if we assume that gov do change their mind about MA ceiling (also known as basic healthcare sum).... (separate rant : why do politicians keeps changing the terms ????)....
it may follow this 3% guideline. Dont think it will have any big jumps. They said this will be reviewed in Jan so i am expecting some news in Q4 16 / Q1 17.. will see..

I do think they should really review this ceiling in view of the IP premiums, and health care cost.. but oh well. it may be a really unpopular policy for some esp with the slowing economy, but i will appreciate it. I know many that still think CPF is a ponzi scheme and personally, i feel you and i are the minority in believing it. But that another story....

AK71 said...

Hi Breakfive,

I see we share the same belief that the ceiling for the MA should be raised. Of course, it could be an unpopular move. Medicine might not taste good but we should take it if it is good for us. ;p

The 3% yearly increase in the MS for the next few years is a fact and I would remind any disgruntled CPF member that it is a very reasonable number. It is only tracking inflation.

Whenever I talk to my friends in HK regarding our CPF and their Mandatory Provident Fund (Chinese: 強制性公積金), they would say that we are lucky to have the CPF and I feel the same way. :)

AK71 said...

A message from a reader:

"Hello! I chanced upon your blog and found the post on oa to sa highly interesting.

"Just some queries, does it mean leaving $55k in SA now will result in 171k at 55 years old, and 253k at 65 years old?

"This 171k (which was accumulated due to interest and principal sum) at 55 years old (assuming minimum sum is 161k then which is not possible but yupps just assuming haha)..... still meets the required sum? So with this scenario one can withdraw 10k out then?

"Seems good to be true, that the govt interest can end up being so much more than what was invested."

Investminds said...

AK, have been following your inspiring blog. I have made the move to transfer spare $ from OA to SA. Hope to have more during passive income during retirement years.

AK71 said...

Hi Investminds,

CPF Life is the best annuity there is in Singapore. If we believe in having a steady income for life in retirement (from age 65), there is no better choice. :)

AK71 said...

Alvin Chong said...
Is there any drawbacks to contribute the full Annual Limit of $37,740 from age 22 onwards till age 55?

AK said...
Saving as much as possible and as early as possible can only be a good thing especially with compound interest in the mix.

AK71 said...

Reader says...
U now 40s? Say u not top up any in your CPF from now on. By the time u can withdraw from CPF. Roughly how much can get per year? I m v curious...

AK says...
Assuming that I stop contributing to my CPF account from 2016...

AK71 said...

Sau Yee Fong:
Just keep in mind that you won't be able to touch your CPF savings for retirement until age 55.

And that is how it should be. :)

AK71 said...

I have explained before that I treat my CPF money as the investment grade sovereign bond component of my portfolio. I am only human and I frequently make mistakes. Having a risk free and volatility free component in my portfolio gives me peace of mind. Even for experienced investors, CPF can be used as a tool which reduces overall portfolio volatility.

Prasad Rnv:
Correct approach AK, but I do not put in extra Into CPF notwithstanding tax benefits as money can be earned tax free in other instruments.

I continue to voluntarily contribute to my CPF as I also want the bond component to remain a more meaningful proportion of my portfolio which is equity heavy.

We all do what gives us peace of mind.

It is never my way or the high way. :)

AK71 said...

Jackson Yang says...
I just made the quick projection for mine one include scenario of yearly cash top up into SA and no pay increment for the rest of my working life.
I estimate myself to have 800k in cpf too by the time i reach age 55.

HnGDreams said...

Does it make sense to top up parents CPF who are already retired and >70, they don't have much $200/month on the annuity drawn currently. If top up this amount will increase slightly i guess?

AK71 said...

Hi HnGDreams,

You will be topping up their CPF-RA which is used to help fund retirement.

It will definitely help them and at the same time you will enjoy income tax relief. :)

AK71 said...

Boost parents' CPF-RA or CPF-MA?

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