Balancing Family Finances and Retirement Planning with PLAN and CPF in Singapore

Each month, Ms Tan Hui Jie’s paycheck feels like it has a million different destinations. She divides it three ways: an allowance for her retired parents, pre-school fees for her 15-month-old son, and daily household expenses. Whatever’s left, she tries to squirrel away for retirement.

“My son is attending a government pre-school and I receive subsidies as a working mum, which helps ease some costs,” shares the 38-year-old healthcare manager. “Still, between my parents’ allowance, childcare, and household needs, my husband and I have to be very mindful about how we manage our expenses and save what we can for the future.”

Sound familiar? It’s a story many Singaporeans in their 30s to 50s can relate to. Retirement planning often takes a back seat when you’re caught in the middle—supporting both aging parents and raising kids. The daily pressures feel super urgent, but here’s the thing: making small moves towards your retirement nest egg now can ease the financial load down the road, not just for you, but for the generations to come.

And the good news? It’s easier than ever to get started, thanks to digital tools that bring clarity and convenience to retirement planning. Enter PLAN (Plan Life Ahead, Now!) with CPF, a new one-stop platform launched this July to help Singaporeans take charge of their financial health—whether you’re just starting your career, buying a home, or prepping for retirement.

Meet Calvin: A Dad Juggling It All

Take Calvin Chew, a 53-year-old father of two teenagers. Most of his income flows into daily expenses and education fees, while his CPF savings cover the family’s mortgage and insurance premiums. “That leaves me with very little liquid cash,” he admits candidly. “I’ve realised that I’ll need to lean heavily on my CPF savings in my retirement years.”

Just like Calvin, many sandwiched-generation Singaporeans see CPF as their main retirement fund. However, how you use your CPF savings today—whether for housing, healthcare, or insurance—will affect how much you have left for later in life.

Balancing Today and Tomorrow

For example, using the Ordinary Account (OA) funds to buy your home is a smart move—you’re securing a valuable asset. Similarly, tapping on MediSave to pay for an Integrated Shield Plan gives peace of mind when medical bills come knocking. But here’s the catch: the more you spend in these areas, the less you have tucked away to grow for your retirement.

The secret is to strike a balance. Make your CPF work hard for both your current needs and your future self. This means being mindful about where your money goes and putting aside more for long-term savings when you can.

How PLAN with CPF Can Help

PLAN with CPF offers practical, straightforward tools like the Retirement Payout Planner to help you see what your payouts might look like from age 65. You can also simulate topping up your accounts or transferring funds and watch how those decisions impact your retirement pot over time. Plus, you can review your plan regularly and tweak it as your circumstances change.

For Ms Tan’s parents, CPF payouts are a crucial safety net. Both are over 65, with monthly payouts. Since Ms Tan’s mother is chronically ill, she’s able to use MediSave savings for her medical bills. Inspired by their preparedness, Ms Tan and her husband now make time to discuss their finances and do an end-of-year review to keep their retirement goals on track.

The Power of Compound Interest

Building a solid retirement nest egg isn’t just about saving regularly—it’s also about growing those savings smartly. Unlike investments that can jump up or down with the market, CPF savings earn risk-free interest, offering a reliable foundation for your golden years.

• Money in the Ordinary Account earns a steady 2.5% per year.
• Funds in the Special Account and MediSave Account earn an even higher 4% per year.
• The government gives an extra 1% interest on the first $60,000 of combined CPF balances (capped at $20,000 in the OA) for members aged 55 and below, making the total interest up to 5%.

Plus, CPF interest is compounded, meaning your money earns interest on top of interest, helping savings snowball faster. To put it in perspective, a member with $200,000 saved by age 55 could receive about $1,600 monthly for life starting at age 65 through CPF LIFE. Without compounded interest, they’d have to start retirement with a whopping $300,000 to get a similar payout—a big difference!

Lessons Learned and Next Steps

Seeing the impact of top-ups and payouts was an eye-opener for Mr Chew. “In the past, I mostly focused on making sure my CPF was enough for my mortgage and insurance,” he says. “But when I realised how much the payouts could grow with just a few top-ups, it hit me that I wasn’t saving enough for retirement.”

His advice to his younger self? “Start planning early, even with small amounts—they really can add up. But it’s never too late to start. My next steps are to review my Special Account top-ups, re-assess insurance costs, and maybe look at my home loan repayments.”

Retirement Planning Beyond CPF

Remember, retirement planning isn’t only about CPF. It’s about improving your overall financial health—managing your income, controlling expenses, growing your savings, and making smart investments. The PLAN with CPF platform even includes a “Financial fitness beyond CPF” quiz developed alongside MoneySense, Singapore’s national financial education program. This handy quiz gives you a quick snapshot of your financial health and offers practical tips on budgeting, saving, and investing.

Members like Ms Tan and Mr Chew can identify gaps in their financial strategy and chart a path toward meeting both their retirement goals and daily financial needs. It’s all about taking control, one small step at a time.

Wrap Up

Retirement might feel far away, but trust me, time flies. You don’t need an overwhelming game plan to get started. Little by little, the choices you make today can build a less stressful, more secure future for you and your family.

So why wait? Log in to the PLAN with CPF dashboard today, explore the resources, run through the planners, and start building a stronger financial foundation. Your future self will thank you!