It has been called so many names. Some people still refer to it as CPF Medisave Limit or Medisave Cap Limit. A short history lesson : In its previous iteration, the official name was Medisave Contribution Ceiling (MCC) but on 1st January 2016, MCC has been renamed as Basic Healthcare Sum. So, what is it?
The Basic Healthcare Sum (BHS) is the estimated savings required for basic subsidised healthcare needs in old age. The BHS is adjusted yearly for members below age 65 to keep pace with the growth in MediSave withdrawals. Once members reach age 65, their BHS will be fixed for the rest of their lives.
Word-for-word from CPF website :
For members below 65 years old, BHS will be $60,000. For members who turn 65 years old in 2020, BHS will be $60,000 and will not change for the rest of their lives.
Year when cohort turned age 65 vs BHS :
- 2020 – $60,000 (+$2,800)
- 2019 – $57,200 (+$2,700)
- 2018 – $54,500 (+$2,500)
- 2017 – $52,000 (+$2,200)
- 2016 – $49,800 (+$1,300)
- 2015 – $48,500 (+$3,000)
- 2014 – $45,500 (+$2,000)
- 2013 – $43,500 (+$2,500)
- 2012 – $41,000 (+$1,500)
- 2011 – $39,500
Medisave Minimum Sum (MMS) is the minimum amount needed in one’s Medisave account before he is able to withdraw other Central Provident Fund monies from age 55. It was removed in January 2016.
Medisave Contribution Ceiling (MCC) is the maximum balance a member may have in his Medisave Account. It was renamed the Basic Healthcare Sum (BHS) in January 2016.
For 2020, the BHS amount has increased by 4.9% from $57,200 to $60,000. My earlier estimation of $59,500 was off by $500 but as always, it is simply an guide and I’m already expecting a number around that range to be released in November.
It might come as a surprise to you, but one of the consistently most-viewed post on this blog is the one on CPF BHS 2019 I posted last year. Is CPF information really that hard to find and understand?
A lot of people love the shock-and-awe tactic for bigger impact. Wow, let’s extrapolate the numbers for 20 or 30 years into the future and see what we come up with! Nothing wrong with that. I just prefer to take it one year at a time, and see how much beyond the annual increase I was able to achieve and shave off my target.
Aiyah, this guy sure never use CPF-OA for housing is it? How about my HDB loan? Well, I have enough to pay it off but choose not to.
Anyway, I have digressed. For me, this year is a vastly different situation compared to previous years. Having reached BHS ($57,200) in mid-2019, CPF-MA was able to maximize the interest earned, and the interest earned alone was able to fulfill a large portion of this $2,800 increase. The situation will be even better in 2020, since most of my contributions for the year 2020 can now be diverted from CPF-MA to CPF-SA. This is especially helpful because I’m helping out my parents for their chronic illness medications.
For some unknown reasons, people like to read about CPF posts. I’ll be doing an update after all the transactions are registered for 2020 to see how far beyond the target I have managed to hit for the year. From having nothing in CPF in 2007 .. to meeting BHS and FRS in 2019, it has been a worthwhile journey. For the curious, my updated CPF status report is available here 🙂
Since you’re still reading, you might be interested in some other CPF stuff like Making Sense Of CPF Retirement Sum Scheme and Using MediSave For My Dad’s Medication. I subsequently transferred $40,000 from my CPF-OA account into my mum’s CPF-RA account on the 8th January 2020 so that she would be able to withdraw $300 for life, from CPF.