Den of The Lion Investor

The current CPF minimum sum of $99,600 will go up to $106,000 from 1st July this year. This is the amount of CPF monies that you have to set aside before you can withdraw the rest. Upon reaching 55, the minimum sum will be moved to your retirement account, and you will start getting a monthly payout of about $960 from age 64 for the next 20 years.

The Medisave minimum sum will also go up from $28,500 to $29,500 while the cap on the Medisave contribution ceiling will go up from $33,500 to $34,500.

There is also a phasing out of the 50% withdrawal rule for those who are unable to meet the CPF minimum sum. From 1st January 2013, CPF members must meet the CPF and Medisave Minimum Sums first before they can withdraw their remaining Ordinary Account and Special Account balances at age 55.

The complete press release with details of the changes can be found on this page of the CPF website.

Going ahead, you can expect the minimum sum amounts to be revised upwards every year to factor in inflation.

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According to Health Minister Khaw Boon Wan, the Medishield insurance scheme currently pays only about 55 per cent of big bills in the subsidised B2 and C class wards. As he wants the patient’s share to be lower at about 20 per cent, therefore he is increasing some of the payouts under the scheme.

However, this also means that the premiums for everyone under the Medishield scheme will have to go up.

• If you are 60 and younger, your yearly premiums will increase by up to $60 from the existing $30-60.
• If you are 61-80, your yearly premiums will increase by up to $120 from the existing $225-510.
• If you are 81-85, your yearly premiums will increase by up to $480 from the existing $600-705. This is a more than 50% increase.

The people under the age group of 81-85 are the worst hit as their deductible amount will also rise to $3000 for B2 wards and $2000 for C wards. Those under 80 have a deductible of $1500 for B2 and $1000 for C.

(The deductible is the amount of money which you have to pay yourself before the Medishield insurance comes in. You will not be able to claim anything for bills that are below below the deductible amount.)

The reason given for the massive increase in premiums for the 81-85 group is that there is only a small pool of people (less than 6000) in that group, so it is difficult to keep costs down. With life expectency of Singaporeans increasing, perhaps there will be more people in that group in the future.

For myself, I have already ditched my Medishield plan long time ago to take up an alternative plan offered by one of the private insurers.

References:

ST article about the changes

Video by Minister Khaw Boon Wan on the premium increase