The Magic Numbers of CPF Balances You Need to Know

Why $20,000 is the Magic Number for Your OA

If you have an OA above $20,000, you can invest the excess funds. If your OA is less than $20,000, you cannot invest. The CPF offers a bonus interest of an additional one percent on balances on the CPF OA, capped at $20,000. Thus, if your OA is above $20,000, you will not be eligible for bonus interest.

The Next Magic Number: $60,000 for Your SA or MA

The CPF pays an additional one percent bonus interest on your first $60,000 of CPF balances. This can be in your OA, SA, or MA. However, there is a cap of $20,000 for your OA, which means you will need a minimum of $40,000 in your SA or MA to get the maximum possible bonus interest. Your entire CPF balances of $60,000 can be in either your MA or SA, and you will still get the full one percent additional bonus.

The Full Retirement Sum (FRS)

The FRS is the amount needed for retirement at age 55 and changes every year. For 2022, the FRS is $192,000. Once you have reached the FRS in your Special Account (SA), you can no longer top-up your SA for tax relief. The cap for the Retirement Sum Top-up Scheme is $8,000 per year. However, your normal employment contributions will still go into the SA, so it can go above the FRS.

The Basic Healthcare Sum (BHS)

The BHS is the maximum cap for your Medisave account, and for 2022, it is $66,000. You can do voluntary contributions to your Medisave account up to the BHS, but only $8,000 will be eligible for tax relief every year. When your Medisave account has reached the BHS, your normal Medisave contributions will flow into the SA if you have not reached the FRS in SA yet.

Why CPF Is a Supercharged SA When You Reach BHS

The normal Medisave contribution for employees is 8%. If you add that to your Special Account contribution of 6%, you get a total of 14% contribution. This is why it is a supercharged SA when you have reached the BHS. If you have reached the FRS in your SA, your Medisave 8% will supercharge your OA since the OA contribution is 23%.