BBCWatcher's Relatively Simple Guide to CPF
Updated January 25, 2026
Here's my simple, general advice on getting the most out of CPF. Exceptions sometimes apply, but this advice is how I would optimize CPF over a lifetime in the majority of cases.
Now
1.
Make a CPF nomination. Update your nomination if/as needed.
Early Working Career
2.
Make top ups to your own MediSave Account if you qualify for tax relief. MA voluntary contributions must fit within the Basic Healthcare Sum. Up to $8,000 per year is
eligible for tax relief.
When You Have a Medical Expense
3. If your MA has reached the Basic Healthcare Sum, if you have a MA payable medical expense, and if you can make a MA top up with tax relief, try paying the medical bill with MA then top up MA within the same calendar month as the deduction and before your payroll cycle MA contribution and any insurance repayment. Otherwise, consider paying in cash so you can collect a credit card rebate (for example) and also avoid losing any MA interest. (Then insurance may reimburse you.)
Early and/or Mid Working Career
4. In late January every year make a $8,000 (total) Voluntary Contribution/top up to your own MediSave Account and/or
Special Account if you qualify for tax relief. Your Voluntary Contribution to MA must fit within the Basic Healthcare Sum. Your top up to your Special Account must fit within the Full Retirement Sum.
5. In late January every year, make another $8,000 (total) Voluntary Contribution/top up to a qualified family member's (such as a nonworking spouse's or elder's) MediSave Account and/or Special Account (or Retirement Account if the recipient is age 55+) if you qualify for tax relief. The same MA and SA limits apply. RA top ups below the Full Retirement Sum qualify for tax relief.
6. If you have at least some Ordinary Account dollars piling up that you won't need specifically for housing,
transfer them to your Special Account in every month you have an excess. All such transfers must fit within the Full Retirement Sum and are only possible before your 55th birthday. (However, when market interest rates are exceptionally high you might instead buy some
Singapore Government Securities to enjoy even higher interest rates.)
7. If you have Ordinary Account dollars still piling up, and if your Special Account has reached the Full Retirement Sum, consider participating in the
CPF Investment Scheme (OA) using the lowest cost CPF Investment Account provider and a prudent, low cost investment choice. Don't choose too many separate investment vehicles since each one incurs fees.
8. Don't forget your spouse or partner! For example, if your spouse hasn't yet qualified for maximum CPF bonus interest, try to help him/her out.
Just Before You Take a HDB Loan
9. Consider transferring your (and your spouse's) OA dollars above $20,000 to your Special Account(s) if you wish to avoid the "HDB sweep."
If You're Self-Employed in Singapore
10. You're obligated to make MediSave Account contributions, but consider making
"all three account" Voluntary Contributions since they're eligible for tax relief, too.
In Your 55th Birthday Month
11. Consider topping up your new Retirement Account with cash and/or transfers (including transfers of OA dollars from your spouse, for example).
In Your Golden Years
12. If you have spare cash and would like to boost your retirement income for life, consider top ups to your Retirement Account at least every time the Enhanced Retirement Sum is raised.
13. If you'd like an attractive place to park some funds (at least when market interest rates are low), consider making an "all three" Voluntary Contribution into your OA/RA/MA. If your MA has reached the Basic Healthcare Sum then that portion of your contribution will spill over into your RA (if you haven't met the Full Retirement Sum yet) or OA (if you have). If you've met the FRS then the RA portion should spill into OA, too. This contribution must fit within the CPF Annual Limit.
14. Unless you're in poor health and/or in financial distress, start your
CPF LIFE payouts at age 70 on the Escalating Plan.
15. Don't make your loved ones wait for a bequest that might never come if you merely live past a certain age. With your foundational standard of living assured with ERS-level CPF LIFE (age 70 payout start, Escalating Plan), be generous to your loved ones right away, while you're still around for shared enjoyment. If they'd like to invest your gifts into prudent long-term investments, sometimes including CPF, that's a great way to build truly dynastic wealth. And/or education, a down payment on a house, starting a new business, etc.
When You're a New Singapore Permanent Resident
16. The above advice applies, but (if able, and if market interest rates are low) you should consider slamming lots of dollars into CPF especially during the first couple years when you're subject to reduced compulsory contributions and have more room below applicable limits. As soon as your get your NRIC number assigned you should be able to make CPF contributions. To some degree you can control when your NRIC number is issued, so try to get that done as quickly as possible after your In Principle Approval (IPA) letter.
If You're a U.S. Person (or Become One)
17. CPF is still attractive, but you should be very careful with the CPF Investment Scheme due to
PFIC complications. Most CPFIS options are "PFIC toxic." You'll need to report your employer's share of CPF contributions as earned, non-excludable income — which is helpful to qualify for U.S. Roth IRA contributions. All interest credited across all CPF subaccounts should be reported every year and is U.S. taxable. Thus there is no U.S. tax on lump sum CPF withdrawals (except for the final bit of interest) since all the income and interest is reported and taxed as/when it flows. CPF LIFE annuity payouts will be subject to the IRS's after-tax annuity rules, so the tax rate on those payouts should be low. Your CPF account should be reported annually on
FinCEN Form 114 ("FBAR") and
IRS Form 8938 ("FATCA"), as applicable.
If You Become a Tax Resident of Another Country
18. Singapore has very few tax treaties with other countries. In most cases CPF (and your other assets and income) will fall under the tax system of your country of residence without any special considerations or favors. Report and pay taxes according to the tax laws and tax rules in your country of residence.
Note that inheritance tax may apply if your CPF nominee falls within another country's inheritance tax system. For example, most residents of Japan (and many past residents if they've lived in Japan within the past 10 years) are subject to Japanese inheritance tax.
If You Have an Elder with Limited Retirement Savings
19. Deposit some dollars (cash and/or OA) into his/her Retirement Account to boost his/her retirement income.
Matching dollars from the government and/or tax relief may be available for cash deposits. Any residual will be paid to his/her CPF nominee(s).
