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This blog is more of a personal reminder to do a voluntary contribution to my CPF MA in early January 2020.
Remember that interest earned this year in our MA will go to our SA if our MA is at maximum (i.e. 2019's Basic Healthcare Sum or BHS which is $57,200).
If our SA is at maximum or is in excess of the FRS, the interest earned this year in our MA will go to our OA.
So, at the start of 2020, we can do a voluntary contribution to our MA to hit 2020's BHS which is $60,000.
How much to contribute exactly?
2020's BHS $60,000
minus
2019's BHS $57,200
= $2,800
For those who are gainfully employed and paying income tax, remember that voluntary contributions to our MA will enjoy tax relief as well.
For me, being retired, I will not get any tax relief but I will enjoy more interest income like anyone else from my MA with this move.
How much interest will $2,800 earn in a year?
At 4%, that is $112 a year.
I like this.
Be inspired by Mr. Clarence Heng's life experience and his CPF story.
Of course, for most of us, money is a limited resource.
We can choose to save more or spend more.
I choose to save more and, in this case, to have free H&S insurance too.
Watch the video and learn more about Medishield Life which provides us with basic healthcare insurance for life.
Underestimating the power of compound interest is one of the biggest mistakes anyone can make.
Of course, if you are very rich and not like the most of us, please ignore this blog.
So, how does the power of compound interest grow our savings?
AK is lazy to explain lah.
Watch the video.
Make full use of our CPF membership and we are taking a big step towards a financially secure retirement.
Believe it!
If AK can do it, so can you!
Believe in yourself!
Believe that you can do it too!
Related posts:
1. Voluntary contribution to CPF MA in 2019.
2. How to do online contribution to CPF?
3. How to get free medical insurance in SG?
Is there a maximum amount I can save in my Medisave Account?
"You can save up to the prevailing Basic Healthcare Sum (BHS) in your MediSave Account if you have not turned age 65.
"The BHS from 1 January 2020 is $60,000 for all CPF members aged 65 years old and below in 2020.
"The BHS applicable to you will be adjusted yearly to account for increasing life expectancy and healthcare costs until the year you turn age 65.
"For instance, if you are aged 65 in 2020, the BHS that is applicable to you will be $60,000 for the rest of your life."
Source:
CPF Board.
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