Why is everyone putting monies into CPF SA instead of investing everything into ETFs like the S&P500 and leave it there till 65 which is also almost guaranteed return but at a much higher rate?

Hi anon,

S&P 500 has no guaranteed returns. Historically it has returned a very decent amount over a long period of time, but this is by no means an indication of how it will continue to grow in the coming decades. To strike a balance between risk and return in a portfolio, one also needs to have safer instruments that are not exposed to the ups and the downs of the markets. Thus, the role of CPF SA in being the 'bond-like' component of one's portfolio, especially when you are near or in retirement and need a little more certainity in your portfolio.

Hello there. S&P 500 ETF comprises of stocks which is generally riskier than CPF SA. Some may not be comfortable putting their money into an equity market and would prefer a risk free instrument like a CPF account.