Working Singaporeans and their employers make monthly contributions to the CPF which go into three accounts:
Ordinary Account - the savings can be used to buy a home, pay for CPF insurance, investment and education.
Special Account - for old age, contingency purposes and investment in retirement-related financial products.
Medisave Account - the savings can be used for hospitalisation expenses and approved medical insurance.
Today, I would like to discuss how we can maximise the use of our Medisave Account (MA).
Medisave Minimum Sum and Medisave Contribution Ceiling
The Medisave Minimum Sum (MMS) and Medisave Contribution Ceiling (MCC) need to be adjusted to ensure that Singaporeans have sufficient savings to meet their hospitalisation expenses, and have been adjusted for inflation. For this reason, from 1 July 2009,
a. The MMS will be raised to $32,000 from $29,500. Members will be able to withdraw their Medisave savings in excess of the MMS at or after 55 years old.
b. The maximum balance a member may have in his Medisave Account, known as the (MCC), is fixed at $5,000 above MMS and this would be increased correspondingly to $37,000, from $34,500.
Any Medisave contribution in excess of the prevailing MCC will be transferred to the member’s Special Account if he is below age 55 or to his Retirement Account if he is above age 55 and has a MS shortfall.
Our MA earns an interest of 4% per year, a very respectable figure compared to what you get from banks today. If you already have $34,500 in your MA, you will earn an interest of $1,380 a year. What can you do with this $1380 every year? Do remember that money in your MA can never be withdrawn in cash even when you retire.
Many of my clients have upgraded their Medishield and Eldershield plans (for people aged 40 and above ). These are private insurance plans that enhances your BASIC Medishield and Eldershield plans.
Have you upgraded yours? Have you upgraded your family's protection against hefty medical bills in the event of a long illness or a serious accident?
If you are not sure what this is all about, please give me a call and I will be most happy to share with you how all these plans work.
Take action now, most people fail because they failed to plan, not because they plan to fail. Procrastination will lead you to regret later in life, so pick up your phone and dial 9001-1082.
I look forward to meeting up with you very soon.
God bless us all with a wonderful day of love, joy and peace in our hearts!
