Make a list of everything your MediSave pays each year and compare it with what goes in.
MediSave pays for several things at once. It covers your own insurance premiums, some regular medical bills, and often part of a family member's costs. Money goes in from contributions while you work and from interest each year. If the payments are recorded in one place and the money going in is recorded in another, it is hard to tell whether your balance is rising or falling, or when that will change. One sheet that lists both sides shows you both, and it takes about twenty minutes to make.
Before you start, gather these: last year's CPF transaction history, the renewal notices from your insurers, your notes from lessons 5.2 and 5.3, and the current Basic Healthcare Sum and current MediSave interest rate from cpf.gov.sg.
Outflow is every premium and bill paid from your MediSave, including the ones you pay for family members. Start with one row for each premium paid from your MediSave. Common ones are MediShield Life, the MediSave portion of an Integrated Shield plan, CareShield Life and ElderShield. Take each amount from last year's transaction history, where it shows as a deduction.
Below the premiums, add rows for regular bills you expect, such as managing a chronic condition, screenings or regular outpatient treatment. If you rarely see a doctor, enter only a small allowance. Hospital stays are not regular, so they get no yearly figure. Note them separately on the sheet as a risk and leave the yearly column empty for them.
Then add family. Each premium or bill you pay from your MediSave for someone else counts as outflow and gets its own row. Use the estimates you made in lesson 5.3, "Using MediSave for family members". When all the rows are in, total the outflow column.
MediSave has two inflows: contributions and interest. Write down your yearly contributions from the transaction history or from the worksheet in lesson 1.4. To estimate interest, multiply your balance by the current MediSave rate.
Compare the two totals and write one word under them for today's position. Your balance is growing if inflow is higher than outflow and the balance is still below the Basic Healthcare Sum. It is shrinking if outflow is higher than inflow. It is overflowing if the surplus would take the balance above the Basic Healthcare Sum. Any inflow beyond what keeps the balance at that level goes to the Special Account.
Linda is a CPF member (an invented example, with invented figures throughout). From the earlier lessons, Linda could already name every premium MediSave paid, the share of the mother's costs Linda had agreed to carry, and the withdrawal limits that left some costs to be paid in cash. What Linda did not yet know was whether the MediSave balance was growing or shrinking, and when that would change.
Linda's own premiums are S$560 a year for MediShield Life, S$700 a year for the MediSave part of an Integrated Shield plan premium, and S$300 a year for CareShield Life. Linda's own expected bills are close to nil. Linda pays S$1,200 a year of the mother's premiums and expects the mother's bills to come to about S$1,000 a year. Total outflow is S$560 + S$700 + S$300 + S$1,200 + S$1,000 = S$3,760 a year.
On the inflow side, contributions are S$4,800 a year. The balance is S$68,000, and at an interest rate of 5% (an example rate, not the current one) interest is S$68,000 x 5% = about S$3,400 a year. Inflow is S$4,800 + S$3,400 = S$8,200. The surplus is S$8,200 - S$3,760 = S$4,440. That would push the balance above the Basic Healthcare Sum, so the excess overflows to the Special Account. Linda writes "overflowing" under the totals.
The sheet is most useful once you look ahead. Premiums rise with age, and contributions stop when you stop working. While you work, contributions cover any gap between outflow and interest, so you don't see it. After you stop working, interest is the only inflow, and any outflow above the interest comes out of your balance.
Use each insurer's premium table to find each premium at the age you expect to stop work and again ten years after that. For each family member, decide whether their costs will rise or end. Then find the year in which outflow first exceeds interest alone, and write it on the sheet. Mark which figures came from insurers' tables and which are your own guesses, so that when you update the sheet you know what to check first.
Linda plans to stop work at 65 and checks age 70. At today's prices from the insurers' tables, Linda's own MediSave-paid premiums at 70 come to about S$2,600 a year. Linda assumes family costs still being paid at 70 of around S$800 a year, giving outflow of S$2,600 + S$800 = S$3,400. If the balance is still around S$68,000, interest at the example rate is about S$3,400, the same as the outflow. Linda's last line on the sheet reads: overflowing now, roughly break-even around 70 if nothing else changes, shrinking after that.
If you can see early that your balance will shrink, you have time to do something about it. You can rethink your riders, review the family costs you carry, or make a voluntary contribution, which lesson 3.3 explains.
Your finished list shows every premium and expected bill paid from your MediSave, including family, with a yearly total. It also shows your yearly contributions and interest, one word for today's position, and the age at which outflow may overtake inflow. Complete it with your own premiums, family costs, contributions and interest. Then write down whether your balance is growing or shrinking and when that might change.
Finish your yearly MediSave list. Write down whether your balance is growing or shrinking, and when that might change.
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