Weekly Blog for a family man in Singapore: What is the Minimum Income Needed for hitting 1 million dollars in CPF

What is the Minimum Income Needed?

The minimum income required to reach $1 million in CPF by retirement depends on several factors, including your contribution rate, voluntary contributions, and investment strategies. Let’s break down the income levels and their path to $1 million.

Employee CPF Contribution: Employees in Singapore contribute a portion of their salary to CPF, and employers also contribute. For those below 55 years old, the combined CPF contribution rate is 37%, where the employer contributes 17% and the employee contributes 20% (subject to wage ceilings).
Interest Rates: CPF accounts earn 2.5% in the Ordinary Account (OA), 4% in the Special Account (SA), and higher rates in the Retirement Account (RA) once you turn 55.

To calculate how to reach $1 million, let’s assume that you start saving and investing in CPF from age 18 and plan to retire at age 65. The steps below outline a strategy based on various income levels.

1. Setting the Foundation: Start Early

The earlier you start contributing to CPF, the better the chances of your balance growing significantly. Compounding interest has a major impact when you start young, as your contributions can grow exponentially.

For someone starting at age 18, here’s what you should focus on initially:

Step 1: Contribute Regularly to CPF

You’ll automatically contribute to CPF once you begin full-time employment, starting at a basic salary level. The total contribution consists of both employer and employee portions. Even if your salary is low at the start, consistency in contributions will set the foundation.

Example:

If you earn $2,000 per month at the start of your career, your total CPF contribution will be around $740 per month, of which $400 will come from the employer’s contribution, and $340 from your own.

Step 2: Take Advantage of the 4% Interest Rate in the Special Account (SA)

If you want your CPF to grow faster, focus on contributing to the Special Account (SA), which earns 4% interest (as of 2025). This is much higher than the 2.5% interest offered in the Ordinary Account (OA).

Starting at age 18, you should top up your SA using any extra savings you have, as much as the law allows. For individuals below 55, you can contribute up to $200,000 to your SA. The higher the amount in the SA, the more it compounds over time.

Step 3: Leverage the CPF Investment Scheme (CPFIS)

You can also choose to invest your Ordinary Account (OA) and Special Account (SA) balance through CPFIS. If you’re comfortable with investment risks, investing in bonds, stocks, and unit trusts through CPFIS may offer higher returns than the standard CPF interest rates.

2. How Much Income is Needed to Reach $1 Million?

To hit $1 million in CPF by age 65, you’ll need to set a goal and strategize based on your income level.

Scenario 1: Minimum Income – $2,000–$3,000 per Month

If you are earning around $2,000–$3,000 a month, hitting $1 million might seem challenging, but it’s still possible with disciplined saving and voluntary top-ups. Here’s the strategy:

Monthly Contributions

At $2,500 monthly income, the combined CPF contribution from employee and employer will be around $925 per month. This will go into your OA, SA, and MA accounts.
Top up your SA as much as possible. The more you can contribute voluntarily, the better. For example, contributing an extra $200 to your SA every month can drastically increase your compounded growth.

Investing Your CPF Funds

Use the CPF Investment Scheme (CPFIS) for the funds in your OA to earn more than the standard interest rates. For example, by investing in higher-return assets, your total CPF returns can grow beyond the basic 2.5% interest rate.

Scenario 2: Mid-Level Income – $5,000–$7,000 per Month

For those earning between $5,000–$7,000, you’re in a better position to reach $1 million in CPF. Here’s how:

Higher Contributions

For a salary of $6,000, your combined contribution would be around $2,220 per month. You’ll contribute $1,200 from your salary, and your employer will add another $1,020.
In this case, you should focus on contributing additional voluntary funds into your SA to take full advantage of the 4% interest rate.

Aggressive Investment Strategy

With a higher income, you can afford to invest in higher-risk assets through CPFIS. If your investments yield 6-8% per year, you could see significant returns, and your CPF balance will grow faster.

Scenario 3: Higher Income – $10,000–$15,000 per Month

At this income level, hitting $1 million in CPF becomes easier:

Maximized Contributions

If you earn $10,000 per month, the combined contribution (employer + employee) can exceed $3,700 per month, even though CPF contributions are capped at $8,000 in total per month from year 2026.
Focus on top-ups to your SA and RA (Retirement Account) to maximize growth.

Use of CPFIS

As a high earner, consider aggressive investments with your OA funds. The goal is to compound your CPF wealth using higher-returns investment options.

3. How Long Will It Take to Reach $1 Million?

Given the power of compounding, here's an estimated timeline based on your monthly contribution:

At $2,000–$3,000 Income: Reaching $1 million could take 40+ years, but with top-ups and investment growth, this could be shortened.
At $5,000–$7,000 Income: With consistent contributions and investment, you could reach $1 million by your late 50s.
At $10,000–$15,000 Income: If you’re diligent with contributions and investments, reaching $1 million by age 50 becomes a realistic goal.

4. Key Factors for Success

To reach $1 million in CPF by retirement, you need to focus on:

Starting Early: The earlier you start contributing, the more time your money has to compound.
Maximizing CPF Contributions: Contribute as much as you can, both mandatory and voluntary.
Investment Strategy: Consider using CPFIS to invest and earn higher returns.
Discipline: Stay committed to your contributions and monitor your investments regularly.

Conclusion

Reaching $1 million in CPF from age 18 is not only possible but achievable for anyone willing to make disciplined contributions and investments. With a starting income of $2,000 or more, you can take advantage of CPF’s high interest rates and voluntary top-ups to accelerate your savings. By using smart investment strategies, consistent contributions, and long-term planning, you can hit the $1 million mark and ensure a comfortable retirement. The sooner you start, the easier it will be!

What is the Minimum Income Needed for hitting 1 million dollars in CPF