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Basic Healthcare Sum 2023

Basic Healthcare Sum

The Basic Healthcare Sum (BHS) will increased from S$66,000 in 2022 to S$68,500 in 2023. This means that I have to prepare S$2,500 in cash to top up my MediSave Account (MA) in January 2023.

If you do not know what is Basic Healthcare Sum, in short, it is the estimated savings you need in your MediSave Account for your basic subsidised healthcare needs in old age.

If you are below the age of 65 in 2023, the Basic Healthcare Sum will continue to be adjusted annually to keep pace with the expected growth in MediSave use by the elderly. This ensures that the Basic Healthcare Sum will stay relevant for each cohort when they arrive at retirement age.

If you reach age 65 in 2023, the Basic Healthcare Sum will be fixed for the rest of your life.

Why Top Up Your MediSave?

I think this question has been asked many times. If you have hit the max of your MediSave Account (MA) at S$68,500 in 2023, your subsequent monthly CPF contribution from your monthly salary and employer gets overflown over to your Special Account (SA) and Ordinary Account (OA).
At this point of writing, the Special Account (SA) earns you a higher interest of 4% per annum. Announced on CPF website, the Government will further extend the 4% floor rate for interest earned on all Special, MediSave and Retirement savings until 31 December 2023.
The interest rate for the Ordinary Account (OA) is 2.5% per annum. To help boost retirement savings, the Government also pays extra interest on the first $60,000 of your combined balances, which is capped at $20,000 for Ordinary Account (OA).
Thus the earlier you reached the Basic Healthcare Sum (BHS), the sooner CPF contribution gets overflown into the Special Account and Ordinary Account.

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