If CPF only allows us to withdraw and get payout after age 55, won't we lose opportunity cost by putting our money to work in other asset classes that can give more than 5% returns?

Hi anon,

You can invest your CPF, but should you lose your money, will you have other sources to turn to?

CPF is your final safety net. There really isn't anything out there that gives 4% guaranteed, and so CPF SA is heavily restricted in what you can invest in. CPF OA may have more options, but you should really look at deploying cash first, especially if you are unsure whether you will need your CPF monies for a house later on.

Sometimes, having something grow at 2.5% p.a. and not looking at it may be better than trying to beat 2.5% by taking on risk. This is especially true for people who may not have time or knowledge to seek out investments with potential returns higher than 2.5%

The primary purpose of CPF is to have a some form of money during retirement. Not everyone can, or have the need, or have the knowledge to get higher returns.

https://www.straitstimes.com/singapore/government-to-review-cpf-investment-scheme

the shocking fact from then-DPM: Over the past 10 years, more than 80 per cent of the CPF members who put their savings into an investment product via the CPFIS would have been better off just leaving their money in the Ordinary Account, which earns a guaranteed 2.5 per cent each year, Mr Tharman noted.

of course, i also blame the unsound advises from agents.​​​