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Voluntary Contribution to CPF MA in 2021.

Monday, December 28, 2020

Reminder to myself:

Do voluntary contribution (VC) to my CPF MA in early January 2021.

2021's Basic Healthcare Sum (BHS) is capped at $63,000 which is an increase of $3,000 compared to 2020's BHS of $60,000.

This means that at the start of 2021, I can do a $3,000 VC to my CPF MA as any amount above 2020's BHS carried over from 2020 will go to my SA then.

For me, this would refer to the interest earned by my CPF MA in 2020.

However, since my SA has already exceeded the prevailing Full Retirement Sum (FRS), the interest earned by my MA in 2020 will flow to my OA instead. 

Source: CPFB.

Savings in the CPF MA is paid an interest rate of 4% per annum.

So, I am going to take full advantage of this like I did in the past few years.

CPF members who have earned income will also enjoy income tax relief for VC to CPF MA.

This, unfortunately or, perhaps, fortunately, does not apply to me.

If you don't know or cannot remember how to do a VC, you can refer to the related posts hyperlinked at the end of this blog.

Till the next blog, stay safe.

Related posts:

1. Online contribution to MA.
2. VC to CPF MA in 2020.

Read also:
Voluntary Contribution to CPF MA in 2021 (Part 2.)


Siew Mun said...

Yes, I will top up for my wife and myself. Additionally, I will top up my wife's SA to the prevailing FRS for 2021 and MY RA to the prevailing ERS for 2021

AK71 said...

Hi Siew Mun,

You are a good example on how we can have a financially secure retirement.

All married men should consider topping up their wives' CPF accounts too. :)

Good men top up their wives' CPF accounts.

CupcakedCrusader said...

Hi Ak,

After reading and rereading all your cpf posts, I have decided to contribute to the full amount of 7k in SA yearly. Hopefully it pays off in the many years to come :) Continue to talk to yourself more and giving us insights on how to be a wealthy peasant.


AK71 said...

Hi KO,

Charlie Munger says we should always be saving some money, put it in a tax deferred account and it will amount to something over time.

If it doesn't work out, blame Charlie hor. ;p

On a serious note, doing regular retirement sum top up (RSTU), formerly minimum sum top up (MSTU), will help all CPF members achieve a basic level of retirement funding adequacy in their old age.

Gambatte! :)

1. We don't have to be smart to be rich.
2. How to grow our CPF savings?

Unknown said...

Hi AK,

The amount in MA can only be drawn down for medical expense right? So essentially locking up 60k+ to earn the interest which will be credited to SA or RA? Is my understanding correct?


AK71 said...

Hi Jo,

The money in CPF MA can also be used to pay for our H&S insurance.

If our CPF MA has already hit the prevailing BHS, interest earned this year in the MA will go to our SA or RA in the new year.

If our SA or RA is already maxed out, the interest earned will go to our OA and I used my case as an example in reference #2 below.

1. Free medical insurance in Singapore?
2. AK is showing off his CPF OA and MA.

dungiveittou said...

Hi AK,

What is the benefit to top up MA over SA since both of the accounts provide the same 4% interest rate?

Unknown said...


AK71 said...

Hi dungiveittou,

We cannot top up the MA, we can only do voluntary contribution to MA and the MA cannot exceed the prevailing BHS.

We can top up the SA and the first $7K of top up each year is eligible for income tax relief.

Contributions (voluntary + mandatory) cannot exceed the CPF annual contribution limit.

Top Ups to SA are allowed on top of the CPF annual contribution limit but only until the SA hits the prevailing Full Retirement Sum.

Those who are willing and able to do both contributions and top ups will get the maximum benefit.

You might want to read this blog for a clearer picture:
Know how to grow our CPF savings?

laurence said...

AK laughing all the way to the bank .................... and the CPFB, as always. 0;)

AK71 said...

Hi Laurence,

No way I am laughing all the way to the bank with the pathetic interest rates they are offering on my savings. ;p

Laughing on my way from the bank to the CPFB as I move some money from the former to the latter, yes. :D

darry said...

Hi AK71 and Friends,

Yes, VCMA 3K to BHS 2021 (63K) is a good move as it can reduce income tax (which can save you $450 if you are on the 15% Tax Bracket)

However, for those who do not incur income tax (such as AK71, homemakers and retirees), then isn't topping up VC3AC become a better option? Why so? Take for example AK71 who is currently 49.

1) 3K VCMA, and then $34740 to 3AC (this gives OA - $27229 , SA - $7511 , MA - $3000) . SA + MA = $10511 can earn 4% interest.

2) $37740 to 3AC, and this gives OA - $26580 , SA $8160 and MA - $3000). In this option, SA + MA = $11160 can earn 4% interest

Hence option 2 for AK71 will have additional $649 in SA, which can earn additional $10 interest ($649 x 0.015% as this is the difference between SA and OA interest rate). And for the rest of the people paying income tax, then option 1 will be preferred.

Does it make sense to gain an extra $10 for non-income tax personnel? Please note the compound effect in the later years, which means for every additional years, you will still get the additional $10 from the original $649 which remain in SA.

Cay_Jay said...


My SA has also been maxed, and I followed the steps to top up the MA account in Jan 2020 earlier this year. However, all of my top-ups ended up being refunded in late Jan. What did I do differently or wrong? Please advise.

Ms J

Cay_Jay said...


I also followed the steps to voluntarily contribute to MA as my SA account is maxed. I did that earlier in Jan 2020, but the total amount of top-ups was refunded in late Jan.

What did I do wrong? Did I top up too early before they revise the MA limit upwards? Please advise. Thanks!

Ms J

AK71 said...

Hi Darry,

I decided to publish my reply to your comment as a blog so that more will know about this.

Thank you very much. :)

Voluntary Contribution to CPF MA in 2021 (Part 2.)

AK71 said...

Hi Ms J,

The new BHS goes into effect on the first day of the new year.

So, I don't know why your VC to MA made in early Jan was refunded in late Jan.

You might want to check with CPFB on this.

hynyosan said...

Hi AK,
Ms J case, I believed that the refund is for the previous year VC to MA. That's because her earning is high and had reached the cap of the yearly CPF contribution.

AK71 said...

Hi hynyosan,

If our mandatory contribution hits the Annual Contribution Limit, no voluntary contribution is allowed.

So, what you suggest is plausible.

It could also be that her BHS is already capped out at age 65.


Bad AK! Bad AK!

I jest. ;p

I don't know Ms J's age or her circumstances.

Asking her to check with CPFB seems like the best idea.

Cay_Jay said...

Hi Hynyosan and AK

Yes, I believe it's due to the annual CPF cap, hence I also cannot use the voluntary contribution to MA. Same for Jan2021 as well.

Anyway, I just realised that through the simple compounding effect of the max SA amount (current FRS amount) and with continued mandatory contributions to it (while I am working), it will almost reach the ERS amount by the time i reach 55. Woohoo!

Aa said...

Maybe because her Dec contribution with bonus despoited to her CPF before she contributED to her SA.If her salary plus bonus portion to ma is more than 3k then her contribution is rejected.

AK71 said...

Hi Ms J,

Ah, mystery is solved. :D

The magic of compounding interest for the win! :D

How to turn $60K into $332K?

AK71 said...

Hi Aa,

Yes, for high income earners, they are not able to do any voluntary contribution as their mandatory contribution would already hit the annual contribution limit.

They can still consider topping up their CPF SA, however, if they have not hit the prevailing Full Retirement Sum.

1. Know how to grow our CPF savings.
2. Should he do VC or Top Ups?
3. Retirement adequacy for late bloomers.

Winnie said...

My annual contribution in 2020 is 31k, less than the CPF Annual limit of 37,740. I have already reached the FRS amount.
Am I still able to top up the 3k today? I tried in the myCPF app but it does not allow me to do so. Under the ‘Top up to SA/RA’ section, the amount is 0. I am not able to top up any amount more that 0

Winnie said...

Also just to add, in my dashboard the MA amount is still only 60k, after 2020 interest earned in MA flowed to OA.

Happy new year!

AK71 said...

Hi Winnie,

Once you have hit the prevailing FRS in your SA, you are not allowed to do any top up to the SA anymore.

As for the MA, yes, at the start of the new year, the MA should only hold the BHS of the year before which was $60,000.

This means you can do a voluntary contribution of $3K to your MA which will also enjoy income tax relief.

Happy new year! :D

Winnie said...

Thanks AK. Realise I can’t top up MA via the myCPF app, can only be done via e-services on cod’s mobile desktop website. Got it sorted now! Thanks for the reminder!

AK71 said...

Hi Winnie,

That is good news!

AK is an IT idiot and has always made contributions using the CPF website with his laptop.

Phone app? Simi lai eh? Can eat or not?

I know.

Bad AK! Bad AK! ;p

Unknown said...

Hi AK, thanks for the article. enjoyed reading it. I have a question:

Is VCMA contribution (eg $3K from $60K to $63K) considered as part of the VC3A $37740 limit ? or independent?


AK71 said...

Hi SC,

VC to MA is a VC and so it is part of the CPF Annual Contribution Limit (VC + MC) of $37,740.

I blogged about how I did VC to MA and VC3A last year in this blog:
VC to CPF in January 2020.

Happy VCing! :D

Cay_Jay said...

I realise you can just sum up all the transaction entries (contribution) in your 2020 statement and determine if you still have any more room to top up, capped at $37,740, if you are considering the voluntary MA contribution. Cheers!

Ms J

AK71 said...

Hi Ms J,

Assuming that our Mandatory Contributions in 2021 will be the same as 2020, it should work.

If we should over contribute, the money will be returned to us without interest.

Easy. :D

The CPF is a national PONZI scheme.

Cay_Jay said...

Oh, so you are saying when I topped up in early Jan 2020 (last year), and saw the refund made in late Jan and Feb 2020, those are pertaining to the top ups I did in Jan 2019?

AK71 said...

Hi Ms J,

The refunds I received from the CPFB in the past were always for excess contributions made in the preceding year.

Here is another blog about me over contributing again:
THe CPF is really a national PONZI scheme!

That was refund received in 2016 for excess VC made in 2015. ;p

Cay_Jay said...

Just to clarify, the refunds I got in Jan/Feb 2020 pertained to the MA contributions I made in Jan 2019 (a year ago) based on the new MA limits. So I had forfeited 1 year of interest of this amount as I had exceeded the annual contribution limits in 2019. :P

AK71 said...

Hi Ms J,

Sounds like you have a "first world problem" which is a good thing. LOL. ;p

Reminds me of this blog:
Earn $350K a year and on track to financial freedom.

Gong xi gong xi! :D

Pete said...

Hi AK,

Quick question. If we do VC to the 3 accounts in Jan (like now), and hit the Annual Contribution Limit ($37k).

How will that affect our normal CPF contribution for the rest of the year? Our employers then don't have to pay us CPF?

I ask this because my understanding is that the maximum contribution is the Annual Contribution Limit. So if I max it out in Jan, then will I still receive employer and employee CPF?


AK71 said...

Hi Pete,

Mandatory Contributions are mandatory. ;)

However, Mandatory Contributions (MC) + Voluntary Contributions (VC) cannot exceed the Annual Contribution Limit of $37,740.

So, excess VC you have made this year will be refunded to you next year without interest.

You might want to use your MC from last year as a guide to estimate how much VC you might be able to make this year.

Pete said...

Hi AK,

Thanks for the reply! Wanna say a big thank you to you for influencing my SA. I topped it up during my earlier years and now I have hit the $183k already. Gam Xia!

On another topic, regarding investing the CPF OA. While SA is too good to invest elsewhere, I was thinking if we invest our CPF OA in the indexes like the SP500 for the long run, it should overtake our 2.5% by CPF.

Any thoughts? I know thats your warchest that you will deploy during crisis mode too. :)

AK71 said...

Hi Pete,

Always nice to hear CPF savings success stories like yours. :D

I would not invest with my CPF savings unless all my other war chests are depleted and that is even during a crisis.

I know that it is tempting but when I think of my CPF as the AAA bond component of my portfolio, it falls in place nicely because all good investment portfolios should have a high quality bond component.

You might want to read these blogs if you don't remember:
1. Why have bonds in our portfolio and which ones?
2. CPF is all we need unless we are very rich.

Peace of mind is priceless. :)

Claire said...

hi AK,

thanks so much for the insight, it inspired my CPF journey.

Can i please check, if FRS and BHS have both reached already, and the mandatory contribution is less than annual limit, should i top up to the 3 CPF accounts voluntarily despite not having any tax relief from it?

Is there anything else I should be looking at/ thinking of to maximise my nest egg? It seems that in your situation where FRS and BHS are reached, you are just topping up the MA account every year in Jan?

Thanks so much!

AK71 said...

H Claire,

I think that all CPF members should max out the CPF Annual Contribution Limit if they can.

If there is some room left after Mandatory Contributions have been made, they should consider Voluntary Contributions.

In my retirement, this is what I am still doing.

I used to do VC to MA to hit the BHS in early Jan each year before doing VC3A.

See this blog for example:
Voluntary Contributions to CPF in January 2020.

This year, I am just doing VC3A to hit the annual limit of $37,740.

I blogged about it recently:
1M50 CPF millionaire in 2021.

Gambatte! :D

WongKen said...

AK71 said...

Hi coffeeplusmilo,

Thanks for sharing the update. :)

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