CPF: From riches to rags

The story below has been submitted by Reggie Ong, 34.


Once, a hardworking man took pride in working hard to provide for his loved ones.  Somewhere along the happy family life, the man bought a flat with some of his CPF money and built a cosy home. When he was ill, he used a little of MediSave for healthcare and when his children went to school, he used some more funds for their education.

Years passed, and the man celebrated his 55th birthday.

A letter from the CPF arrived in his mailbox.  The letter tells him he can now withdraw the amount in excess of the minimum sum.  A little annoyed, the man thought to himself, “Surely money in the pocket is better than money tied up in CPF?”

He draws the maximum that he can, leaving just the minimum sum and was happy for a while.

A few years passed. Then a few years more. In less than five years, the money is gone.

Why?  Reports from here and abroad show that retirees tend to spend the most in the earlier years of retirement.  With the ‘financial freedom’, they indulge in big ticket items, traveling and other more lavish purchases.

So now, where does that leave them? In a very poor position, if you ask me.  If they have left their jobs, it will be harder to find employment at an older age.  Even if they have stayed in their jobs, having spent the money too early simply means they now have to work longer in order to save enough for the future.

Did you think that was fiction?

Let me share with you another story of a close friend whose father withdrew his CPF when he turned 55 (some years ago).  Her father was a civil servant and income was not too bad compared to his peers, so he was able to draw a several hundred thousand when he turned 55 years.

He lost all the money in about three years.

To him, the CPF amount had seemed to him like a windfall that could last forever.  And really, everyone, including himself, thought he should have known better.  But nope, he blew it all on booze, not-so-wise investments and yes, on a woman too.  He was drinking with friends every night and picking up every tab. If his friends knew that he was not going to go the following day, they would even make him order and pay first so that they could have a good time the next day.  At his expense.

I am not sure how her father was able to secure credit, but he got himself tangled up in a bank loan when he lost money on stocks.  But it only took two months before he found himself  struggling to keep up with the monthly repayment and interest payment.

I’ll cut the story short: my friend ended up taking over the monthly repayment for her father and is now working hard to ensure that the family has a steady flow of income.  The responsibility is all upon her shoulders now since the parents have practically no money now.

For now, my friend is just feeling grateful her father is fast approaching the drawdown age and that will trigger the start of monthly pay-outs.

So you want your CPF back? And you think surely you can manage your own finances?

If you think the stories above involved weak-minded or even stupid people, may I remind you that when those people received their CPF, they too believed that the money would last.  They too believed that they were smarter than that.  I shudder to think what may happen if current rules are changed to allow people to draw all their CPF too early.


Don’t think it can happen to you?  Think again, we’re all just human.







  1. Thanks for writing this story.

    I would suggest that the government allow people the option to choose whether they want their CPF money back on condition that they carry a different IC which will not entitle to benefit of CPF contributors example no loan from CPF for buying house, no welfare support once they finished all their money.

    Those want their CPF return tie to GIC must prepare to accept a cut if GIC loss money since they always say GIC loss money.

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