Max out your Medisave account in Jan Skip to main content

Max out your Medisave account in Jan

Effective Jan 1, 2019 the Basic Healthcare Sum (BHS) has increased from S$54,500 to S$57,200. Funds in the Medisave Account (MA) and Special Account (SA) earns 4% p.a, while funds in the Ordinary Account (OA) earns 2.5% p.a.

Assuming you have hit the $54,500 limit in 2018, we can take the opportunity to top up $2700 to our Medisave Account by this month using cash to leverage on the following benefits:
  1. Tax deductions if you use cash to top up your MA. Note the $7000 annual cap on CPF deductions, so the SA top up in FY2019 will be $4300.
  2. When your MA has been maxed out, your monthly CPF contribution from your salary and employer will flow over to your SA. This account also earns you an interest of 5% p.a. Once your SA has met the met the Full Retirement Sum (FRS), the funds will flow over to your Ordinary Account, which earns you a 3.5% interest rate p.a.

In summary, whenever the government increases the Basic Healthcare Sum, quickly max out your MA in Jan, then the SA before the end of the year.
Labels:

Comments

Post a Comment

Popular posts from this blog

I increased my term + accident insurance policy with Aviva

I recently maxed out the SAF Aviva group term insurance on both term life plan for $1M and accident plans for $600k, which costs me $47.42 and $77.37 per month respectively. This is on top of my existing  whole life plans . I did this to ensure adequate insurance coverage in times of need. The only downside of this is that Aviva pays out a maximum of $20M per event, and it's prorated accordingly, so don't bet your house on this and have some other backup. Term covers up to age 65-70 (your income generating years), and whole life covers your whole life (including your retirement years). In general whole life plans are alot more expensive per $ of coverage, compared to term plans, so you have to utilize both to get adequate coverage at a reasonable cost. In Singapore where voluntary death isn't an option, it could really bankrupt a family. Some say to purchase a $1M term plan that covers you up to age 99. That means you can't live past 99, but such plans are...
Post a Comment
Read more

Trade wars and buying banks

The recent trade wars have caused the markets to be extremely volatile, one week down 5%, the next week back up 5% and we can see sector rotations playing out on the STI.  Currently am at 60/40 invested vs cash and am selling some of my small caps positions that don't have alot of price buffer, in order to rotate them into stronger blue chips like DBS, Capitaland (now Asia's largest property company after the merger with Ascendas). REIT prices have gone through the roof and investors seek safer havens in this turbulent times, which prices out any entry point. Best to wait for dips in the local banks, especially if the price to book ratio is close to crisis levels. Anyway my investment horizon is 20 years, so I'll be buying at every half integer level. The saying "Sell in May and go away" really doesn't apply for me. It's more like "Buy in May. Dips are you friends". It's funny, every year I notice that DBS offers 15% trading commission re...
Post a Comment
Read more

Be Rich, Not Famous: Living Low-profile

You are not under the watchful eyes of the public.   Famous people are being followed by paparazzi, get interviewed on TV, have their entire lives scrutinized and even made into reality shows.  Imagine you walk into a hawker center in your slippers and PJs, and people start pointing commenting and maybe some even take photos of you.  Unless the work you do is truly meaningful - i.e. Jane Goodall, and you're not a public servant (work in the government), pictures of you with fans are meaningless and fleeting. When you're dead, people will only remember the day you died, or not at all. Assuming someone famous passed away.  My typical reaction for 30sec would be "oh my, oh no, lets google it to find out more." And then I'd forget it and move on with life.  Is it worth it to live a life in constant public scrutiny, just for these 30 sec when you die?  Unless you're someone really famous like Ghandi, or Donald Trump, nobody will really care because you...
Post a Comment
Read more