Singapore's Secret Retirement Weapon: Why CPF Makes Everyone a Millionaire

There's a line in a letter that's been making the rounds in Singapore this week that I can't stop thinking about.

It's from a piece titled "Welcome Home," written by a Singaporean man who was evacuated from Riyadh in March aboard a Republic of Singapore Air Force aircraft, along with his family and 218 other Singaporeans and their dependants. They had been living in the Middle East when the Iran war escalated sharply and commercial travel options dried up. The SAF came for them.

When they boarded, an RSAF serviceman greeted each family as they stepped onto the aircraft.

"Welcome home."

Two words. They hadn't even taken off yet. But something shifted in the cabin – passengers looked around quietly, some smiled, some wiped their eyes. One family was already home before the wheels left the ground.

When the aircraft finally lifted off from Riyadh, applause broke out. Then someone started singing.

The national anthem. "Majulah Singapura." Onwards, Singapore.

It was entirely spontaneous, according to Nisar – the man who wrote the letter. He hadn't planned it. Nobody had. One voice started, and others joined, slowly, across the cabin, rising from people who had just spent weeks living through missile alerts and the sounds of a war at closer range than most Singaporeans will ever experience.

For most Singaporeans, the national anthem has a very specific texture.

You sing it every weekday morning for a good ten to twelve years of your life – primary school, secondary school, pre-university. Every single morning, standing in a school hall or on a parade ground, hand over heart, same words, same melody, same ritual.

And if we're being completely honest, most of us just went through the motions. The words were long since memorised; the singing was muscle memory. You were probably thinking about breakfast, or the test you hadn't studied for, or whether today’s the day you will muster up the courage to talk to your crush.

The anthem was background. A daily obligation. A known quantity.

And then imagine you're in an aircraft lifting out of a war zone, your family beside you, and that anthem starts – and suddenly it is not background at all. It is the sound of everything the word "home" means, compressed into a melody you've been singing since you were seven years old without ever quite understanding why.

You don't need to have been on that plane to understand what those people felt. You just need to have sung that anthem, more mornings than you can count, without really meaning it. Because that's when you understand that something was forming in you during all those half-hearted mornings that you didn't notice at the time.

This was the letter that Prime Minister Lawrence Wong read from at this year's Labour Day rally. It's gone viral by Singapore standards – and he was visibly moved by it, more than once.

The point he was making is not complicated, but it's also not small. That national pride – patriotism, belonging, whatever you want to call it – isn't something that's simply declared or legislated into existence. It forms slowly, in rituals and routines and obligations, over years. And you often don't know it's there until the moment you need it.

The singing on that aircraft was, in the PM's framing, the proof of something. That the investment in a shared identity – the morning assemblies, the National Service, the multiracial classrooms, the deliberate construction of a national narrative – had built something real. Something that showed up spontaneously, at altitude, over the Persian Gulf, in people who had no particular reason to perform for anyone.

He called it a "Majulah Singapura moment." And it was.

I also spent time this week watching a live stream by Mr Loo Cheng Chuan, founder of Singapore's 1M65 movement – a community built around the insight that an ordinary Singaporean, by maximising their CPF and letting compounding do its work, can retire with more than S$1 million in their retirement account.

He was demonstrating a new calculator he'd built – one that projects retirement outcomes from a household's current CPF balances, combined with continued contributions and basic, low-cost index investing. He ran it live, with real numbers from his viewers.

The results were, to put it mildly, not what anyone in the audience expected.

A 45-year-old with S$250,000 in CPF, no additional investments, just continuing to contribute and work: S$1 million at 65. A couple with combined CPF and SRS balances: S$2.3 million. Add disciplined SRS investing at 6% annual return: S$3.5 million. Several participants ended up with projections north of S$3 million. One couple came out at S$5.8 million.

Loo himself had audited the spreadsheet multiple times, enlisted community experts to check it, and kept reducing the assumed investment return to conservative levels precisely because the numbers looked so improbably large. They survived all the scrutiny.

His conclusion is the same one Einstein allegedly reached about compound interest: it is the eighth wonder of the world. Those who understand it earn it; those who don't, pay it.

What struck me most was his framing of the CPF as a great equaliser. No matter how much you earn, contributions are capped – meaning the gap between a modest income and a high one closes significantly once you zoom out to a 20-year retirement horizon. The system was designed with enough compulsion and structure that people who would never voluntarily save enough end up with enough anyway. That's not accidental. That's architecture.

A national anthem sung spontaneously over the Persian Gulf. A retirement calculator that nobody quite believed until it was audited many times over.

Both are about the same thing: what a well-designed system quietly builds for you, before you know you need it.

You didn't feel patriotic during those 3,000 school assemblies. You weren't thinking about compounding during those years of mandatory CPF contributions. You were just showing up, going through the motions, occasionally grumbling about it.

And then one day, at altitude, or at 65, you discover that something remarkable happened in the background.

I am, genuinely, proud to be Singaporean this week. Not in the flag-waving, chest-beating sense. In the quieter sense of recognising that the country I grew up in built things – institutions, systems, habits – that work in my favour even when I'm not paying attention to them.

That's not nothing. In a world where most things seem to be breaking down, it's actually quite a lot.

Majulah Singapura.

👉 Hit reply and share your thoughts – I’d love to hear what’s resonating with you.

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Passive vs. Active – Which Style Suits You?

We’ve just explored the power of Systematic Investing – putting your investment plan on autopilot. Now, let’s dive into two popular investment styles that often go hand-in-hand with systematic approaches: Passive Investing and Active Investing. Choosing between them is a key decision for any L-Plate Retiree.

Passive Investing is all about humility. Instead of trying to beat the market, the goal is simply to match its performance. This is typically achieved by investing in low-cost index funds or Exchange-Traded Funds (ETFs) that track a specific market index, like the S&P 500 or a global bond index. The philosophy behind passive investing is rooted in the Efficient Market Hypothesis, which suggests that all available information is already reflected in asset prices, making it incredibly difficult for anyone to consistently outperform the market over the long term. Passive funds are characterized by:

• Low Fees: Since there’s no active management, costs are minimal.

• Low Turnover: Investments are bought and held, reducing trading costs and potential capital gains taxes.

• Broad Diversification: You get exposure to a wide range of assets, aligning with our Global Diversification Principles.

For most L-Plate Retirees, passive investing is a powerful, low-stress, and highly effective strategy for long-term wealth building.

Active Investing, on the other hand, is the opposite. It’s about trying to beat the market. This involves a fund manager (or you, if you’re feeling brave!) actively researching, selecting, and managing investments with the explicit goal of generating returns that are higher than a specific benchmark. This can involve strategies like stock picking, market timing, or sector rotation. While the idea of outperforming the market is appealing, active investing comes with significant drawbacks:

• Higher Fees: Active managers charge more for their expertise and research.

• Higher Turnover: More frequent trading leads to higher transaction costs and potentially more taxes.

• Inconsistent Performance: Historical data consistently shows that the vast majority of active managers fail to beat their benchmarks after fees, especially over extended periods.

For L-Plate Retirees, the evidence strongly favors a predominantly passive approach. It’s disciplined, cost-effective, and aligns perfectly with a long-term investment horizon, allowing you to focus on your Personal Financial Assessment and enjoy your retirement.

L-Plate Takeaways:

• Passive = Market Matcher: Invest in low-cost index funds or ETFs to simply match market performance.

• Active = Market Beater: Involves trying to outperform the market, often with higher fees and less consistent results.

• Fees are Crucial: Passive funds have significantly lower fees, which compound into greater returns over time.

• Evidence Favors Passive: Most active funds fail to beat their benchmarks after fees.

• Simplicity Wins: For L-Plate Retirees, a passive, systematic approach is generally the most effective and stress-free way to invest, building on the Foundations of Investing.