I recently read an article published in The Business Times on 23 May 2026 titled “The retirement advice that worries me the most” by Christopher Tan. The article struck a nerve because it highlighted a growing issue in Singapore’s financial advisory landscape: the dangerous oversimplification of CPF retirement planning.

As someone deeply interested in personal finance and retirement adequacy, I found myself reflecting on how many Singaporeans may unknowingly make costly CPF investing mistakes that only surface decades later. The consequences are serious because retirement mistakes are rarely reversible.

The article discussed how some advisers encourage Singaporeans to set aside only the Basic Retirement Sum (BRS) instead of the Full Retirement Sum (FRS), while diverting the remaining CPF funds into investment-linked policies (ILPs). On paper, the projections often look attractive. Higher returns, larger monthly payouts, and bigger “bequests” are used as selling points.

But beneath those polished slides and optimistic charts lies a much deeper issue: many people misunderstand what CPF Life is actually designed to do.

After reading the article, I started thinking about the biggest CPF investing mistakes Singaporeans should avoid. These are not small errors. Some could permanently affect retirement security, especially during old age when there is little room to recover financially.

Here are the costly CPF investing mistakes I believe Singaporeans should never make.

Mistake #1: Treating CPF Life Like a Normal Investment

One of the biggest misconceptions I see is people comparing CPF Life directly against stock market investments or ILPs purely based on projected returns.

This comparison is fundamentally flawed.

CPF Life is not designed to maximise returns like an equity portfolio. It is designed to provide guaranteed income for life. That distinction matters immensely.

When I hear someone say, “This ILP can generate 8 per cent or 10 per cent returns, so it’s better than CPF Life,” I immediately think they are comparing apples to oranges.

CPF Life protects retirees against two major risks:

• longevity risk,
• and sequence-of-returns risk.

An investment portfolio can grow significantly during good market periods, but markets do not move in straight lines. If a retiree experiences poor market returns during the early years of retirement while simultaneously making withdrawals, their portfolio may deteriorate much faster than expected.

CPF Life removes that uncertainty because payouts continue for as long as the member lives.

That guarantee is extremely valuable, especially for retirees who may live into their 90s or beyond.

Mistake #2: Believing Historical Returns Will Continue Forever

Another costly CPF investing mistake is assuming past investment performance guarantees future results.

This was one of the strongest points raised in Christopher Tan’s article.

Many retirement projections use historical fund returns from exceptionally strong market decades. A fund may have delivered annualised returns of 10 per cent or more over the past decade, but projecting those same numbers indefinitely into the future can create unrealistic expectations.

Markets go through cycles.

There are periods of:

• strong bull markets,
• recessions,
• inflation shocks,
• financial crises,
• and prolonged stagnation.

Retirement planning should never depend on best-case scenarios.

When advisers present high projected payouts based on historical returns, many investors naturally focus on the upside while underestimating the downside risks. That is dangerous because retirement portfolios need stability, not just growth potential.

I personally believe conservative assumptions are far more responsible when planning for retirement. It is better to underestimate future returns and be pleasantly surprised later than to overestimate returns and run out of money in old age.

Mistake #3: Underestimating Longevity Risk

Most people underestimate how long retirement can last.

A Singaporean retiring at age 65 today could easily live another 25 to 30 years. Some may live even longer.

That means retirement is not a short-term financial phase. It is potentially a three-decade income challenge.

This is where CPF Life becomes extremely important.

Unlike investment portfolios that can be depleted, CPF Life payouts continue indefinitely. The entire structure is built around pooling longevity risk across the population.

Unfortunately, many Singaporeans focus heavily on leaving behind a large inheritance while neglecting the possibility that they themselves may outlive their savings.

I understand the emotional appeal of preserving capital for children or beneficiaries. However, retirement planning should first prioritise ensuring one’s own financial independence during old age.

Running out of money at age 85 is far more financially devastating than leaving behind a smaller inheritance.

Mistake #4: Chasing Higher Returns Without Understanding Fees

One issue many investors overlook is how significantly fees affect long-term retirement outcomes.

ILPs often contain multiple layers of fees, including:

• fund management fees,
• insurance charges,
• platform fees,
• administrative charges,
• and commissions.

Over decades, these fees compound against investors.

A seemingly small 2 per cent annual fee can reduce retirement wealth dramatically over a 20- or 30-year period.

This is why I always believe investors should fully understand:

• what they are paying,
• how advisers are compensated,
• and whether the product structure is truly necessary.

Many Singaporeans unfortunately do not read the fine print carefully. They focus on projected returns while ignoring the cost structure underneath.

The problem is that fees are certain, while projected returns are not.

Mistake #5: Using CPF Funds for Investments Without Fully Understanding the Risks

CPF monies form the backbone of retirement security for many Singaporeans.

That is why investing CPF funds should never be treated casually.

I notice that some people become overly aggressive once they hear stories of higher investment returns. They start viewing CPF as “idle money” that should be fully invested for maximum gains.

But CPF is different from ordinary investment capital.

The Ordinary Account, Special Account, and Retirement Account all play critical roles in long-term financial stability. Once losses occur within CPF investments, rebuilding those balances may become difficult, especially for older workers nearing retirement.

I personally think CPF investing should be approached with much greater caution than cash investing.

Before investing CPF funds, investors should ask themselves:

• Can I tolerate market volatility?
• Do I fully understand the investment product?
• What happens if returns disappoint?
• Will this affect my retirement adequacy?

Far too many investors focus only on upside potential.

Mistake #6: Assuming “Guaranteed” Means Fully Guaranteed

One of the most concerning issues highlighted in the article was the use of terms like “capital guaranteed.”

Many retail investors hear the word “guaranteed” and naturally assume certainty.

But in reality, guarantees within ILPs can be highly conditional or limited.

For example:

• some policies only guarantee premiums paid,
• some guarantee the higher of account value or a minimum percentage,
• some guarantees apply only upon death,
• while others depend on policy conditions being met.

Projected future values are not the same as guaranteed future values.

This distinction is incredibly important.

I think financial products should always be explained using plain language that ordinary consumers can easily understand. Retirement planning is too important for ambiguous terminology or overly optimistic marketing presentations.

Mistake #7: Ignoring Inflation During Retirement Planning

Another CPF investing mistake many Singaporeans make is underestimating inflation.

A retirement payout that seems comfortable today may feel insufficient 20 years later.

Healthcare costs, food prices, insurance premiums, and daily living expenses tend to rise over time.

This is why retirement planning should balance:

• guaranteed income,
• inflation protection,
• and long-term growth.

CPF Life provides stability, but investors may still require some exposure to growth assets to combat inflation over multi-decade retirements.

The key is balance.

The mistake occurs when people swing too far in either direction:

• becoming excessively conservative,
• or becoming dangerously aggressive.

Mistake #8: Believing There Is One Perfect Retirement Strategy

One thing I appreciated while reflecting on the article is that retirement planning is deeply personal.

Not everyone requires the exact same CPF strategy.

Some Singaporeans may have:

• rental income,
• business ownership,
• dividend portfolios,
• family support,
• or substantial non-CPF assets.

In those cases, different approaches may be appropriate.

However, the foundation of retirement planning should still be built around security and sustainability, not speculative projections.

I believe the real danger arises when aggressive strategies are marketed as universally superior without properly disclosing risks.

There is no perfect retirement formula.

But there are certainly reckless retirement decisions.

Mistake #9: Prioritising Sales Narratives Over Financial Education

Christopher Tan’s article ultimately raised an ethical concern that I think deserves serious attention.

Many Singaporeans lack deep financial knowledge. As a result, they naturally place trust in financial advisers and insurance agents.

That trust carries enormous responsibility.

If retirement strategies are presented primarily through:

• emotionally persuasive narratives,
• optimistic projections,
• or incomplete comparisons,
  clients may make decisions they do not fully understand.

I believe Singaporeans should spend more time improving financial literacy before committing to long-term retirement products.

People do not need to become investment experts, but they should at least understand:

• risk,
• fees,
• guarantees,
• and the difference between investing and insurance.

That basic knowledge alone can prevent many costly CPF investing mistakes.

My Personal Reflection After Reading the Article

After reading the 23 May 2026 Business Times article, I found myself agreeing with its core message.

Retirement planning should prioritise stability before optimisation.

Too many people focus on:

• maximising returns,
• increasing projected payouts,
• or leaving behind large bequests,
  without first securing lifelong income for essential expenses.

In my opinion, CPF Life remains one of the strongest retirement foundations available to Singaporeans because it addresses a problem that investments alone cannot fully solve: the risk of living too long.

That does not mean people should never invest or diversify beyond CPF. Investments absolutely have a role in wealth building and inflation protection.

But replacing guaranteed retirement foundations with optimistic market projections can become extremely dangerous if things go wrong.

Retirement planning is not just about achieving the highest possible numbers on paper.

It is about ensuring dignity, independence, and financial stability during the later stages of life.

And sometimes, the most costly CPF investing mistakes are the ones that initially look the most attractive.