Loo Cheng Chuan Says $1 Million In CPF Savings By Age 65 For Couples Guarantees Worry-Free Retirement

This festive season, CPF’s golden boy is back to bring you tidings of good cheer.

Mr Loo Cheng Chuan, a self-made CPF Millionaire, preaches his ‘1M65’ ($1 million by age 65) strategy in an intimate 7-min interview with DollarsandSense posted this Wednesday (29 Nov) on Facebook.

He believes every Singaporean couple can have $1 million of combined assets by age 65. His secret weapon? The CPF Special Account (SA), which will apparently ensure a worry-free retirement nest egg of $1 million.

You can check out the enlightening video here. We’ve summarised the key points of his sermon after the jump.

Follow The 1M65 Way

Ideally, Mr Loo recommends that a young couple should top up their SA in CPF as early as possible.

With just a starting capital of $130,000 in two SA accounts, the power of compound interest means the couple will have an impressive combined amount of $1 million by their retirement age of 65.

So what age should couples start? Mr Loo recommends the age of “late 20s to early 30s” as a great time to begin.

Although saving early may be difficult, Mr Loo says that investing more into SA will reap eventual benefits, given the minimum 4% risk-free interest.

Once the minimum amount is raised, all that’s left to do is to “just let it run, and don’t touch” the money inside the SA.

Anyone who follows this method will thus “become rich very easily”.

Does Mr Loo’s math check out?

Thankfully, DollarsandSense has already done the math for us based on this scenario of a Singaporean couple starting work at 25 years old, getting married at 30.

Assuming the following:

  • The couple earns a median salary of $3,222/month each.
  • There is zero inflation, because it is compensated by zero wage increments and no bonus.
  • They buy a 4-room BTO flat in non-mature estate for $238,000 (without grants)
  • They pay monthly home mortgage using only CPF OAs
  • The extra 1% interest CPF provides for first $60,000 is ignored.

They will complete paying off their home loan at $650/month after 25 years through their CPF OAs.

Using the 1M65 method, the combined assets of the couple at age 55 will then be:

  1. A fully paid for HDB flat: $238,000 (zero price appreciation)
  2. CPF Full Retirement Sum: $322,000 ($161,000 per person)
  3. Medisave Account: $97,000 ($48,500 per person)
  4. Cash from CPF: $597,000

This comes up to a grand total of $1,254,000. Impressive.

Unfortunately, this estimation is based on a couples’ net asset worth. Now, let’s talk cash.

Will the $1 million be in cash?

As CPF millionaires, how much can the couple withdraw in cash by age 55? CPF’s policy is that they have to hit the compulsory minimum retirement sum first.

So what is the minimum sum for most couples?

Turns out, it depends on which year they’re born in, based on this table from CPF’s website:


Evidently, this minimum sum seems to increase the later they are born.

The CPF Board previously explained that it’s because long-term inflation and rising standards of living have to be taken into account.

For couples who are younger than Mr Loo, the minimum sum they have to hit looks set to be $181,000 or higher.

Currently, if the minimum sum is not fulfilled, only $5,000 cash may be withdrawn at age 55.

At age 65, the couple will be able to access their entire retirement sum in monthly payouts of $600-$750.

Although becoming CPF millionaires sounds enticing, they probably can’t cash their million fully at age 55. Dang.

CPF-anboy For Life

Despite the drawbacks to his 1M65 method, Mr Loo’s undying loyalty to CPF piqued our interest.

We did a little digging and uncovered that Mr Loo is no stranger to advocating for CPF investment, since Straits Times’ 2016 coverage of his ‘1M65’ ($1 million by age 65) strategy.

He even had a stint as part of CPF Board’s AreYouReadySG campaign back in 2015.

Perhaps there’s more vested interest here than meets the eye too.

Take a leap of faith with CPF

Mr Loo paints an idyllic picture of accumulating retirement savings based on CPF investment.

However, like many Singaporeans, we still can’t help but wonder what’s the point of being CPF millionaires if we’re unable to spend it.

Since most of us probably can’t save as much as Mr Loo anyway, his strategy may sound a lot better in theory than in practice.

In Mr Loo’s defense, he did mention that his method may not be for everyone.

But if you sensed a calling from his message today, you too can take the leap of faith with CPF today.

Featured image from DollarsandSense.