If you didn’t know yet, the basic healthcare sum (BHS) will increased from S$57,200 in 2019 to S$60,000 in 2020. This means that I have to prepare S$2,800 in cash to top up my Medisave Account (MA) in January 2020.
Based on information from the CPF website, monies in the Medisave Account (MA) and Special Account (SA) earns up up to 5% interest rate per annum. Monies in the Ordinary Account (OA) earns up to 3.5% interest per annum.
With the increase in limit for the basic healthcare sum (BHS), we can take the opportunity to top up our Medisave Account (MA) using cash.
There are several benefits of hitting the limit (S$60,000) of your Medisave Account:
- Tax rebates if you use cash to top up your Medisave Account (MA).
- When you have max out your Medisave Account (MA), your monthly CPF contribution from your salary and employer gets overflown over to your Special Account (SA). The Special Account (SA) earns you a higher interest of 5% per annum. If your Special account (SA) have met the Full Retirement Sum (FRS), the monies will overflow to your Ordinary Account (OA) which earns you a 3.5% interest rate per annum.
So for those that will be receiving your 13th month bonus or Annual Wage Supplement (AWS), do prepare to set aside S$2,800 if you are planning to top up your Medisave Account (MA).
if you currently have sufficient funds in the MA (ie S$57,200), then the annual interest of 5% should take care of the increase.
Hi Sweet Retirement,
I’ve already got my RA (Retirement Account)set up two years ago. With the BHS set to increase to 60K comes 2020, will it still best to top up my MA using CASH to max up my CPF interest earned across all the 4 accounts (OA, SA, MA and RA)?
Besides, I have some insurance premium, about $1,230 (AWL) to be withdrawn from my MA at the beginning of 2020. Meaning to say I need to set aside more than $2800 (i.e. $4,030)to hit the limit, right? When it the best time to top up, beginning of 2020 (0.1.01.2020) or end 2019 (31.12.2019)in order to beat the deadline to enjoy TAX REBATE?
I have also a SRS account….with the maximum contribution cap set at $15,300. Does it mean my cash preparation to enjoy the TAX REBATE and reap the max CPF interest will be : SRS ($11,270) and MA ($4,030)?
Hope you could highlight to me if my mathematical sum and analysis is on the right track?