What's the best hack to Using CPF Life yet Self-employed if would like FIRE at 45?

I'm a self-employed individual. Age 29. With no CPF Contribution, but doing ETF investing with cagr of 30% for the last 8 months (Just started in Jan).

My goal is to retire in 15 years time with 1.2m and 4% withdrawal rate.
THat will be 44 yrs old for me.

But i know CPF Life is a very attractive option, but i know that i'm not sure if i should go the Voluntary contribution for CPF since i'm averaging 30% CAGR in my own cash investment.

Any thoughts?

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Duane Cheng

31 Aug 2020

Financial Consultant at Prudential Assurance Company Singapore

Hi there,

The biggest difference between your 30% IRR and CPF-Life is the word, guaranteed.

CPF-Life will give you a guaranteed stream of income starting from your statutory retirement age, up till the point of death. Any balance amount not used, will be handed down to your estate or beneficiaries.

If you have been investing for 8 months, CAGR might not be an accurate representation, as it has not taken into account annual performance, as you are currently basing it on your YTD performance.

Do note based on your 1.2m and 4% withdrawal rate, your portfolio might run dry by age 70. Some of your options could be to do CPF-Life in tandem with your investments, firstly to ensure continuity in your lifestyle. Secondly there will be tax reliefs for yearly RSTU.

At the end of the day, you will need to best determine your path to retirement. You are fortunate that you are exploring your options at 29, but in Singapore, even for people with regular CPF contribution find it difficult to retire comfortably at 65.