How Much CPF Savings Do I Have?

When I first started working in my late teens earning S$6 an hour, it irked me tremendously that I only took home S$4.80 for each hour I toiled at the retail store as a salesperson. Teenaged me did not like the idea of locking up 20% of my income at all and certainly couldn’t see the relevance of CPF. That was half a lifetime ago and these days, logging in to my CPF account just to admire at my accumulated savings over the years is actually something I do from time to time.

Well, as much as there is to admire anyway. I may be in my mid-thirties now, but I’ve been predominantly self-employed for most of my adult life and only started paying myself a salary around 2019. As a result, my CPF contributions span only about five to six years so I probably don’t have as much in my CPF accounts as my peers, but let’s take a look at how much I have and my overall strategies and thoughts about my CPF savings.

CPF MediSave Account

Let’s start with my largest account, the CPF MediSave. In my early twenties starting life as a self-employed insurance agent back then, contributing to MediSave was mandatory for license renewal. Over the years, my MediSave account has grown to S$51,533. For something that I haven’t been actively monitoring, it is quite impressive how a tidy sum has been amassed through regular contributions and compounding interest.

It’s still some way to go to reach Basic Healthcare Sum (BHS), which is currently set at S$71,500. The good news is that being below this amount means I can voluntarily top up to the account for tax relief, which I did so last year for the first time.

MediSave funds can be utilised for two things only: healthcare expenses and insurance premiums. On the insurance side of things, MediShield Life is compulsory, and as everyone should, I’ve supplemented my coverage with a private integrated Shield plan. I was previously on a plan that provided for up to private hospitalisation coverage but I have since downgraded to one that just provides for A Ward coverage. Some have asked me about my considerations surrounding this decision and I will discuss more on the pros and cons of this in an upcoming piece so stay subscribed for that.

Another insurance coverage you could upgrade is CareShield, and that is also another thing on its own so stay tuned for updates.

CPF Ordinary Account

In my recent past, I started a tuition business and paid myself a salary around 2018, thus beginning official contributions to my other accounts.

In my Ordinary Account (OA), I have S$32,697 of savings here after utilising S$68,597 for my residential property. This includes S$35,000 which partially paid for my downpayment and S$33,597.68 which was used to make loan repayments to my bank. There is an accrued interest of S$6,070.24. I’m not in a hurry to repay these amounts withdrawn because I’m quite comfortable with the idea of accrued interest as I’ve discussed before in a previous piece.

I have not been using my CPF OA to make payments to my monthly mortgage obligations for almost two years now which some may find a curious decision. With options to get 4 to 5% p.a. returns, cash on hand is currently king and it doesn’t really make sense to leave money in the CPF OA.

However, I prefer to leave some money in my CPF OA as a rainy day fund purely to pay for mortgage. One could of course ring-fence cash for this purpose, but I think the opportunity cost of leaving a bit of money in CPF OA for this is pretty small. I did overshoot my intended amount quite a bit, so I’d be resuming mortgage payments via CPF soon, and also putting the excess above S$20,000 to CPF-IS investments.

CPF Special Account

Finally, my Special Account (SA) has some S$37,044. It is a modest figure which is due to the relatively short time I’ve been making CPF contributions and the fact that I haven’t been actively topping up this account beyond my mandatory contributions. In my opinion, younger individuals should not be putting too much funds into something like SA since they have the benefit of having decades ahead of them to go into investments that can yield them higher returns in the long run.

I personally subscribe to the Rule of 120 which is a modified version of the Rule of 100. In the Rule of 100, one subtracts their age from 100 to derive their investment asset allocation. A person who is 25 should have 75% (100 – 25) in riskier investments and 35% in safer instruments. My take is that the number should be higher at 120 which means the 25-year-old should have 95% (120 – 25) in riskier investments and the remaining 5% in safer tools like CPF.

This is also why I have just started to make my first voluntary top-up to my SA last year after quite a few years of deciding against it. Firstly, I think I’m of the age where I should start increasing the proportion of safer assets in my overall portfolio (according to Rule of 120, 16% should be in safer assets). Secondly, topping up to SA is a quick and easy way to reduce my tax obligation.

As a result of the Rule of 120 and tax savings, I think it makes a lot of sense to only top up your CPF when you are slightly older when you not only have a shorter time horizon left, but also have a higher earning ability to enjoy more tax savings. Don’t forget that you are only able to top up to the prevailing Full Retirement Sum (FRS) so if you max out your top-ups too early you may not be able to count on this as a means of tax relief in future when you are older and earning more.

Conclusion

While my younger self detested CPF, over the years I’ve really grown to like the concept. With regular contributions and compounding interest, it is really quite amazing how money can accumulate quite significantly over time. I now have over S$120,000 across 3 accounts without even really thinking about it.

It’s definitely not enough for one’s retirement, however, and financial inflorescence is a topic I intend to talk about more this year. Already, I have done a piece on estimating your CPF Life payout, and will continue to explore the topic of retirement in the near future so stay subscribed if you are keen on such topics.

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