Why CPF Became The Empress Of My Portfolio

When I was younger, I never viewed Central Provident Fund (CPF) very positively.  Like many Singaporeans and PRs, I saw it mainly as restricted money.  It was money deducted every month from salary, locked away for decades, and inaccessible during the years when financial pressure felt the heaviest.  At that stage of life, CPF did not feel empowering.  It felt limiting.  

However somewhere in my late 30s and early 40s, my thinking about money changed quite significantly.  I stopped viewing investing mainly through the lens of maximizing returns.  Instead, I started thinking much more about stability, future vulnerability and long-term survival, basically, managing an entire portfolio as a whole.  Aging changes financial psychology very deeply.  Once parents grow older, healthcare risks become more visible, and retirement starts feeling real rather than theoretical, stability suddenly becomes extremely valuable.  That was when I slowly started appreciating CPF differently.

Today, in my earlier post exemplified by the imperial harem hierarchy of my portfolio, CPF sits firmly at the very top as the 皇后 - the Empress.  Not because it produces explosive returns, and certainly not because it is glamorous.  It occupies that position because it became the most dependable, stable and structurally protected component of my entire financial foundation.  Other investments may rise faster during bull markets, but CPF is the one that continues compounding quietly regardless of whether markets are euphoric or collapsing.

The Beauty of CPF

As I grow older, I increasingly appreciate how powerful guaranteed compounding actually is.  The Special Account (SA) earning around 4% annually in Singapore dollars is honestly an extraordinary system when viewed objectively.  Modern investing culture tends to glorify speed, disruption and aggressive growth.  Social media constantly pushes investors towards chasing the next Nvidia, the next AI winner, or the next multi-bagger stock, but after experiencing enough market volatility and economic uncertainty, I started realizing that stable compounding itself is a luxury.

The beauty of CPF is not excitement, it lies in consistency.  There is no need to monitor quarterly earnings anxiously, there is no fear of dividend cuts, there is no concern about management scandals, valuation bubbles or market crashes.  The money simply compounds quietly in the background year after year.  That psychological stability became increasingly attractive to me.

This was also why starting this year, I stopped using CPF Ordinary Account (OA) to service my mortgage loan.  In the past, using CPF for housing felt financially logical because it reduced immediate cashflow pressure. Like many, I naturally used available CPF funds because the system encouraged it and because monthly expenses always mattered more during younger years.  But over time, I started seeing the opportunity cost differently.  Every dollar removed from CPF loses decades of protected compounding.  The earlier the withdrawal, the greater the long-term impact becomes.  Once I truly internalized this, my approach slowly changed.  Instead of using CPF aggressively for housing, I increasingly preferred preserving and accumulating the funds inside the system, especially within the Special Account.  The objective became very straightforward - let compounding work quietly for as long as possible.

At younger ages, many people dismiss 4% as unimpressive because they compare it against stock market returns during strong bull markets.  But after 40, the psychology changes completely.  A stable and government-backed 4% foundation starts looking incredibly powerful, especially when viewed over twenty years or more.  At that point, investing is no longer only about maximizing upside.  It also becomes about minimizing catastrophic downside.

This is why CPF eventually overtook many of my dividend stocks psychologically.  I still value dividend investing greatly and still believe in owning strong cash-generating businesses.  But dividends can fluctuate, markets can panic, and entire industries can become disrupted by technological changes.  CPF, however, simply continues functioning steadily in the background regardless of external conditions.  That consistency is exactly why it became the Empress of my portfolio.  The Empress is not necessarily the flashiest figure in the palace, but she is the stabilizing core that protects the entire structure during periods of uncertainty.

How CPF Works Differently For Me As A Malaysian

At the same time, I am also realistic about my long-term future.  As a Malaysian holding Singapore PR status, I increasingly think there is a meaningful possibility that I may eventually retire in Malaysia after achieving FIRE.  Places like Johor simply offer gentler retirement mathematics compared to Singapore.  Daily living expenses, healthcare costs and even long-term elderly care become significantly more manageable once spending shifts into Malaysia Ringgit rather than Singapore Dollars.

However, retiring permanently in Malaysia also means confronting another practical reality. Singapore Permanent Resident (PR) status is not truly permanent in the emotional sense many people assume. Under Singapore regulations, PRs require valid Re-Entry Permits to maintain PR status while overseas, and renewal depends partly on demonstrating continued commitment and contribution to Singapore.  Singapore’s Immigration and Checkpoints Authority (ICA) has repeatedly emphasized this principle in REP renewal policies.

Realistically, if I eventually retire permanently in Malaysia and stop economically contributing to Singapore, there is a meaningful possibility that one day I may no longer retain PR status.  Honestly, I have already mentally accepted that outcome.  In many ways, it is simply part of the natural transition from working life in Singapore back towards retirement life in Malaysia.

Ironically, this possibility made CPF even more strategically interesting to me.  Under CPF withdrawal rules, former PRs who leave Singapore permanently and lose or renounce PR status may withdraw their CPF balances in full, subject to the necessary documentation and verification requirements.  This means CPF eventually transforms from a Singapore retirement fortress into a portable retirement capital pool for me.

That realization significantly shaped my long-term planning.  If I eventually lose PR status after permanently relocating to Malaysia, I will likely gradually redirect a meaningful portion of withdrawn CPF funds into Malaysia’s Employees Provident Fund (EPF) system.  Both systems have their own strengths and weaknesses depending on where a person intends to retire, spend and receive healthcare.  CPF offers stronger currency strength and tighter structural safeguards, while EPF offers greater withdrawal flexibility and becomes naturally more practical if future retirement expenses are mainly in Malaysia.

As I age, I increasingly realize that retirement planning is not mainly about luxury.  It is about vulnerability management.  Healthcare costs, long-term medical treatment, nursing home expenses, mobility decline and dependency risks eventually become far more important than chasing maximum portfolio returns.  This is why I increasingly view EPF not primarily as a growth engine, but as a future healthcare reserve system that can help absorb future medical costs and potential elderly care expenses within Malaysia.

Final Thoughts

Aging changes financial priorities very profoundly.  When younger, investing is often driven by ambition and growth.  After 40, investing increasingly becomes about resilience, stability and preserving dignity during old age.  The central question slowly changes from “How rich can I become?” to “How secure and sustainable can my future become?”

That mindset shift was ultimately what elevated CPF into the position of Empress within my portfolio hierarchy.  Not because it is exciting, but because it quietly protects the entire kingdom (my portfolio) when the outside world becomes uncertain.  Barista FIRE, here I come...!