Sorry. NO CPF-MA interest overflow into OA

Interest earned from Medisave account

Medisave BHS @2024 = $71,500

assume @4% p.a. interest = $71,500 × 0.04 = $2,860 p.a. earned


Premiums deducted from my Medisave:

*1:My Enhanced Incomeshield+ As-Charged rider premium is already S$5.6k for next year.

Cash premium = $4,046 p.a.

** Medisave deducted = $1,639 p.a.

*2: Medishieldlife for my next year @age 61~65 premium = $1,131 p.a. (= 1131/2860 × 100% = 40% deducted)

*3: CareShieldLife premium of $898 p.a. (for 10 years period)

Total premium deduction from my Medisave = $1,639 + $1,131 + $898 = $3,668 p.a. (expenses)

~~~

Takeaway #1:

Net interest earned = $2,860 - $3,668 = -$808 p.a.

In summary, my MA balance was reduced by $808 p.a.

~~~

Takeaway #2:

Instead of feeling sad, I am cautiously glad that I topup with cash $3,668 p.a. to max BHS again. This topup reduces my personal earned income tax.

Takeaway #3:

Don't ever think that annual interest earned from MA can overflow into your OA for OA Withdrawal. Unknowingly, you actually incur deduction in MA balance due to premiums payments.

Takeaway #4:

When one retires, your MA balance will not grow by 4% annually. Every year, even without medical bill payment, your OA Balance will be eaten up or reduced due to annual premiums payment; (but necessary medical protection).

Query

Wonder if you are aware that, by topup up your Medisave account to restore your Medisave to BHS, you can get some deductible income relief ?

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