Looking to grow your emergency cash funds, short-term savings or Supplementary Retirement Scheme (SRS) funds but prefer an alternative that has minimal risks and is highly accessible? Cash management accounts in Singapore may be the ideal solution for you since they are high in liquidity, low risk and do not impose lock-in periods. If you are new to cash management.
April 15, 2021
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If you’re living in Singapore, the planning of your finances and your retirement cannot exclude your CPF. From the day you start working, you’ll be contributing to your CPF Ordinary Account (OA), CPF Special Account (SA) and your MediSave Account (MA).
With all that money set aside over the years, you’ll have to start making plans to capitalise on your CPF savings when retirement comes knocking.
But in this article, let’s zoom in on one plan-making in particular – a retirement ‘cheat code’, if you will – CPF SA Shielding. It is a term originally coined from this article back in 2019, highlighting how one can maximise your CPF accounts for retirement.
Benefits of MediSave Account top up
If you have not yet hit the BHS, doing a voluntary cash top up to your MediSave Account provides two benefits:
Benefit 1: Enjoy a risk-free 4 per cent p.a. interest rate on your MA savings
Benefit 2: Income tax relief at your marginal tax rate (see below table)
Do note that for the income tax relief, your chargeable income is reduced by the amount you topped up. For instance, if you earned $60K a year and you topped up $5K, your tax savings will be equal $5K x 7 per cent.
Maximum limit for MediSave Account top up