Why CPF is useful for the self-employed: Learnings from a seasoned freelancer


Lin You Fa
Former radio DJ, veteran host, singer and actor

“No matter what, save. And if you can’t, save it in CPF.”

Many freelancers might consider CPF schemes less appealing since they don’t benefit from the employer’s share of CPF contribution. Plus, they can often opt for other financial products that are more flexible. Veteran freelance host, Lin You Fa has a different opinion on this after almost 2 decades of learning to manage his own finances. Read on to find out why.




Risk-free attractive interest rates on CPF accounts can provide stability to your financial portfolio.

1. CPF diversifies your financial portfolio

Being your own boss and paying your own
salary makes the self-employed more aware of their financial health. That’s why many have their own ways of saving up, to be prepared for rainy days. As You Fa shared, “It never crossed my mind to place my money into CPF though. I had the mindset to invest in property because property appreciates in value.”

In fact, it was only through hosting the CPF retirement planning roadshows back in 2015 that You Fa became better acquainted with CPF schemes. He realised that he could have diversified his financial portfolio safely with his CPF savings. And the advantages that drew his attention? High interest rates and how his CPF monies “cannot be touched” until his retirement. This was something that would have been helpful for him especially since he was more of a spender in his younger years.

Even for the thrifty, it is also beneficial to contribute extra savings to CPF since it provides attractive and risk-free interest rates.


2. MediSave provides for future medical needs


Unlike employees who enjoy basic healthcare benefits such as paid medical leave or subsidised medical care, the self-employed have to pay their own medical bills and bear the loss of income in times of sickness. That’s probably why compulsory contributions to MediSave might be seen as a bane for freelancers. Being unable to tap on one’s MediSave account savings can be frustrating when you need the cash.

But in hindsight, You Fa is glad he has been making these MediSave contributions over the past 18 years. “Together with a retirement fund, the MediSave money can cover my medical needs while letting me live my days comfortably,” he said with a smile.

However, that doesn’t mean the chirpy host is looking to become a full-time retiree anytime soon. While he used to look forward to retiring at 40 when he was younger,
his life experiences have changed his mind, “I feel that in Singapore, you can rest, in the sense of slowing down your pace, but not stop entirely.”


3. Voluntary contributions enhance your financial stability


“When you don’t have CPF, it’s tough trying to fork out money to pay your monthly home loan repayments,” said You Fa, who keenly felt the impact of not having regular employer CPF contributions when he quit his job to become a freelancer.

When you have a fluctuating income, it is beneficial to seek stability in your financial planning through voluntary CPF contributions. If you have to sustain significant regular payments such as monthly housing loans, CPF savings can be a life saver in times when one has limited income.

Any self-employed individual who makes voluntary CPF contributions to all 3 CPF accounts or to their MediSave Account, can also enjoy tax relief of up to 37% of their net trade income or up to the CPF Annual Limit of $37,740, whichever is lower. This is definitely an option to consider when one can afford to do so.

With attractive CPF interest rates of up to 5%, self-employed individuals should not exclude setting aside more savings in their CPF as part of their financial portfolio. Despite feeling the burden of CPF contributions in his younger years, You Fa is thankful now for both his MediSave savings and a retirement fund that will support him well into in his later years. Now that he considers himself in semi-retirement, You Fa takes jobs as they come without pushing himself too hard because he knows he is financially secure. If you’re just starting out as a freelancer, take his advice: “No matter what, save. And if you can’t, save it in CPF.”



If you are a self-employed person and would like to find out more information, register for our ‘Key Essentials for Self-Employed Persons’ talk to get started in your planning. Alternatively, subscribe to our CPF Email Alerts for the latest updates and events! Simply log into mycpf with your SingPass > Select ‘My Notifications’ > Select ‘Subscribe to Email Alerts’.