S’poreans can invest their CPF savings under a new scheme with simplified, low-cost & diversified lifecycle products, launching 1st half of 2028

As someone approaching their 40s, also known as an “OG Millennial”, I’m at that delicate age where you don’t really want to reveal it to strangers, but you can look at your CPF accounts and go “whoa, that’s pretty impressive.”

But retirement age is not as distant as it once seemed, and while that pile of money looks good now, what will it look like in the future? Would it really be enough to sustain my retirement needs?

As something of a casual investor, which means I’m signed up to a plan where I put in some money every month but otherwise don’t think about it, I have been looking for ways to diversify my investment options.

The answer may lie in examining all your options, including an investment stream you may not have first considered - your CPF savings.

Why consider investing your CPF savings?

Even if you don’t actively invest, your CPF savings do not sit idle.

Every year, they grow steadily with risk-free interest rates. The Ordinary Account (OA) earns 2.5 per cent per annum, while the Special, MediSave and Retirement Accounts earn four per cent per annum.

If you are below 55 years old, you could earn up to five per cent per annum on the first S$60,000 of combined CPF balances, capped at S$20,000 for the OA.

For those aged 55 and above, they can earn up to six per cent on the first S$30,000, and up to five per cent per annum on the next $30,000 of combined CPF balances (capped at S$20,000 for the OA).

What this means is that CPF already gives you a strong “base return” that is stable, guaranteed, and works quietly in the background, even when markets move up and down.

From there, the next consideration for some is not replacing this foundation but building on it.

If they are willing to take some risk, this could include exploring additional ways to grow their CPF savings that may potentially exceed CPF interest rates over the long term, and ultimately gain greater financial security in retirement.

What is the CPF Investment Scheme (CPFIS)?

Under the CPFIS, Singaporeans have the opportunity to invest their CPF savings in various instruments such as bonds, unit trusts, exchange-traded funds, gold, insurance products, and shares.

This option may be worth exploring if you are someone who is willing to take on some risk for potentially higher returns, have the financial expertise to evaluate and select investment products, and prefer to actively manage your own portfolio.

One must meet certain eligibility requirements before they can participate.

But what if you don’t fit the above description?

Of course, some of us may either not have that expertise or might not be so keen to dip their toes into the waters of financial investments.

And even if some of us are open to the idea of investing, we may not have the time to keep up with how our investments are doing, or the confidence to navigate the range of products available.

That’s where the new investment scheme comes in.

In his Budget 2026 speech, Prime Minister Lawrence Wong announced that the CPF Board will introduce it in 2028.

This new scheme caters to those who are prepared to invest for the long term, but may have less expertise in navigating investment products, or who prefer not to actively manage their investments. As with CPFIS, participation will be voluntary.

What would the new scheme look like?

The new scheme will incorporate three key features to help manage risk and simplify the investment experience:

1. Automatic age-based rebalancing of investment portfolio mix, with phased liquidation.

Simply put, your portfolio follows a glidepath, automatically shifting from higher-risk assets (like equities) to lower-risk assets (like bonds) as you age, before being liquidated in phases by a target date.

This calibrates the level of investment risk you are exposed to at different stages of life, and helps mitigate the risk of a market downturn at the point of exit.

Upon phased liquidation, investment sale proceeds will be transferred to the member’s CPF accounts

The funds in the Retirement Account can then be used to boost a member’s CPF LIFE monthly payout anytime they decide to start their monthly payouts from age 65.

2. Simplified choice

To simplify decision-making, the CPF Board will select two or three reputable product providers for investors to choose from. These selected providers are expected to be announced in the first half of 2027.

3. Low fees

All-in fees will be capped to minimise costs and allow investors to retain and benefit from more of their investment returns.

Which is the right approach to growing your CPF savings?

So to sum it up, you will soon have an additional option when it comes to growing your CPF savings:

1. Keep savings in CPF

CPF members who don’t want to take any risk with their CPF savings can let it earn risk–free interest. They may also consider making cash top-ups to their CPF accounts, or transferring OA savings to their Special Account to help boost their CPF LIFE monthly payouts in retirement.

2. New investment scheme

Singaporeans who want to invest over the long term but are not sure how to go about it, or prefer not to actively manage their investments. The new scheme will provide simplified, low-cost and diversified investment options.

3. CPFIS

Singaporeans who are financially savvy and confident in managing their own portfolio can choose their own investments within the existing CPFIS.

Do note that the CPF Board specifically does not endorse any product providers or investment products included under the CPFIS or the new scheme.

So, should you invest?

Although some may wish to start investing, others may be very risk-averse and prefer not to do anything that might jeopardise the safety of their retirement nest egg.

That’s why it’s important to make these considerations before deciding to invest:

• Investment objectives – Why are you investing? What financial goals do you want your investment to achieve?
• Risk tolerance – All investments are subject to risk, i.e. the possibility of losing part or even all your investments due to financial market changes. How much risk are you comfortable with and can afford to take?
• Investment time horizon – How long will your assets be invested? Does it have enough runway to ride out market fluctuations?
• Your overall financial situation – How much money can you set aside for investment over your investment time horizon, after factoring in your financial commitments (such as housing mortgage) and lifestyle expenditure?

At the end of the day, investing is not a one-size-fits-all endeavour.

It all depends on one’s individual circumstances, and priorities. For instance, as someone without a family to support, I can afford to take a little more risk and invest more to hopefully maximise my returns for my retirement years.

I don’t plan on buying a car, but I do value a good holiday overseas. Knowing what you can afford and what you can’t live without will set you in good stead to make a retirement plan that works best for you.

While the prospect of growing your savings sounds attractive in this era of rising costs, it is important to approach investment decisions with a sound understanding of your own financial situation, knowing what you are investing in and your appetite to take risks.

With the right understanding and preparation, investing your CPF savings can be a suitable strategy for some of us.

While the monies remaining in your CPF account continue to earn risk-free interest – growing them further could bring you closer to the financial security and freedom you are working towards.

This branded article is brought to you by the CPF Board.