CPF, explained the way I wish someone had explained it to me

For years, I treated CPF like background noise. Money came in. Money sat there. Sometimes I used a bit for the home loan. That was about the depth of my understanding.

It was only when I started looking after my own finances seriously that I realised how much I'd been missing. CPF isn't just forced savings. It's actually one of the most useful tools we have in Singapore, if you understand how it works.

Here's the version I wish I'd been given at 30.

You have three main accounts. OA, SA, MA.

OA, the Ordinary Account, is for housing, education, and some investments. This is the one most of us interact with because of the HDB or bank loan.

SA, the Special Account, is for retirement. It grows at a higher interest rate than OA, and it's harder to touch, which is the point.

MA, the MediSave Account, is for healthcare. Hospital bills, insurance premiums under MediShield Life and Integrated Shield, certain outpatient bills.

Interest rates are higher than what most banks pay. There's an additional 1 percent on the first $60,000 combined across your accounts. If you're 55 and above, there's another 1 percent on top of that. The exact rates shift, so check the CPF site for the current numbers.

Three things most people get wrong:

A. They think CPF is "their money locked away." It is their money. And it earns more reliably than most low risk options outside.
B. They forget that using OA for housing has a cost. When you sell the property, you refund what you used plus the interest it would have earned. This is the accrued interest people overlook.
C. They assume CPF Life payouts are small. The payout is structured to provide monthly income for life from the age you choose, and the higher your Retirement Account sum at 55, the higher your payout.

I'm not saying CPF solves everything. It doesn't. But understanding it changes what you do with the rest of your money.

If you've been ignoring it, just log in to the CPF site once. Look at the projections. You'll likely be surprised, sometimes in a good way, sometimes in an "I should have started earlier" way. Either way, you'll know.