Is it a good idea to top up my CPF Medisave? And why are so many people against topping up MA or SA? - Seedly

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Asked by Anonymous

Asked on 14 Aug 2018

Is it a good idea to top up my CPF Medisave? And why are so many people against topping up MA or SA?

The basic sum for Medisave increases every year, does it mean I will never be able to max it out? And why are so many people against topping up MA or SA? Please help


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Dawn Fiona
Dawn Fiona
Level 5. Genius
Answered on 14 Aug 2018

I personally think it's a great idea and I do CPF cash top ups every year. Not entirely true, it moves every year but so does your amount inside, due to compound interest! Those who are against it are often cos they don't like the idea of locked up monies and prefer liquidity. You've to see what you prioritise and value more to decide if this move is good for you :)


Jay Liu
Jay Liu, Diploma in Accountancy at KHEA
Level 6. Master
Answered on 15 Sep 2018

It's illiquid. Only able to withdraw at the later stage in life. If you die earlier than the withdrawal age and have no dependants.


HC Tang
HC Tang, Financial Enthusiast, Budgeting at The Society
Level 8. Wizard
Answered on 15 Sep 2018

it's a good Because of guaranteed 4% interest compounded yearly. 2nd questions: Not entirely true, it moves every year but so does your amount inside, due to compound interest.

Some people are against top up are Because the $ is only available after retirement and you have no control over it now. Consider it as a risk free guaranteed 4% force savings and as part of your investment portfolio with tax rate incentives, then why not ?


  • Money that goes in is “one way”. When it comes to drawing out and using it there are many TnCs so you have to be aware of when you need to use that CPF money and on which area(medical,housing etc)
  • Topping up CPF is good for two main reasons. Tax relieve and to get compounding interest

FRS May be a moving target, so is our retirement age however the compoundOng interest also increases yearly.

Your money in CPF is ultimately yours and there are situations that you can apply for exceptions to draw out that money.


Luke Ho
Luke Ho, Venture Capitalist at CFX
Level 6. Master
Answered on 31 Aug 2018

Hi, thought I'd help you out here.

Firstly, it is a GOOD idea to top up your medisave. The issue its whether or not its the best, most optimal idea for the asset allocation of your money.

As I advised someone else recently, if you're young and you have a lot of cash flow compared to someone who knocks out 20% of their salary on a compulsory get go and then has like a ton of responsiblities and expenses, with a mentality saving for Retirement, you can afford to go a lot more aggressively and make a lot, a lot more for your retirement than a CPF SA could even dream of.

I invest a minimum of $2500 every month into expensive but high yielding, inefficient market funds no matter what happens and am on track to hit at least $500,000 in less than 10 years. Likely a lot more. At the same time, I focus on what I'm good at and increasing my income. I encourage clients with objective-saving to do something similar, because whatever cash you have left over as you get older - is completely yours.

You can also pay for your downpayment (house) with a portion of that money and still have a ton rolling left over. Across 25, 30 years...the volatility of a 10% per annum fund isnt that historically different from 5% one (though obviously SA is risk free, but...)

I only dump money in CPF whenever I want to have subsidized taxes, which will also have a bit more into my retirement in the event of future volatility. Of course, a good financial retirement plan would account for this and have you move out of equities as you hit your 40s and 50s.

Of course, you MUST get insurance first.

Coming back to the second part of your question, some of the general population is generally against CPF because of its lack of flexibility till you hit 65. Furthermore, its predicted that this age (65) will get higher and higher. If it were run by anyone else, it'd seem like a complete scam. But its in the governments best interest to keep people working hard and unhappy for a little while being able to afford everything, rather than happy for a while and then screaming bloody murder for 30 years or longer later after having no money.

If you're a conservative type who wants to do things by the book - retire at 65, save money at no risk etc etc, my investment advice doesnt apply to you and max out your CPF with significant peace of mind.

I'm a Financial Adviser. Investing is my specialty, but you can also drop me a message if you'd like my help on this.