Do you know...
How does the CPF scheme work?
This is a very important question, considering that people of my age group have mostly started working. Every month during payday, part of our pay goes into our CPF account. Though it seems that we're getting less-than-supposed-pay, the money still belongs to us. Only that it belongs to a category of assets that are not-so-liquid.
The money that goes to our CPF is divided and placed into 3 different accounts: Ordinary Account, Special Account, and Medisave. The portion of the funds in Medisave is much less liquid because it is only usable for payment of medical bills, and cannot be withdrawn even after retirement.
In a way, the money is left untouched in that account unless you have some medical bills to pay. Or, you can choose to use it to pay for medical insurance (such as Medishield). The catch that most insurances have is that there's a cap (limit) to how much of the medical fees it covers.
Take a look here as an example. On the first page of the PDF file from the link, under the column "Medishield", it shows a column of figures stating the maximum coverage the plan offers for various types of medical bills. If the bill exceeds the amount, the difference will have to be forked out from your pocket.
If you were to scroll down to the third page of the PDF file, there's a column named "Aviva MyShield Plan 1" where the figures are mostly replaced by the phrase "as charged". In other words, you'll never have to worry about forking out anything from your own pocket in the event of paying medical bills. Furthermore, it provides coverages not offered by plans from other companies.
It is no coincidence either, that this plan has the highest premium of all - $142 - displayed in the PDF file. Sounds like a substantial amout, but let's do some maths first. A typical Engineering fresh grad earn a pay of about $2500 per month. The amount that goes into Medisave would thus be 6% of the monthly pay (check here if you don't understand where the figures come from), which in this case would be $150. Most of us (Engineering fresh grads) are able to afford this premium.
Considering that the portion of the pay which cannot be touched, safe for medical bills, can be used to cover potential fees completely. No worrying about having to top up excesses from your bank account. I personally find this a pretty good deal, and intend to swtich to this plan after securing a job.
A news report on this issue can also be found in The Straits Times, 6th July Wednesday, page H22. Do take a look. Managing finances is quite important at this stage of life. Of course, it'll be more prudent to consult a professional first before doing anything.
Disclaimer: I'm not working as a financial advisor.
This is a very important question, considering that people of my age group have mostly started working. Every month during payday, part of our pay goes into our CPF account. Though it seems that we're getting less-than-supposed-pay, the money still belongs to us. Only that it belongs to a category of assets that are not-so-liquid.
The money that goes to our CPF is divided and placed into 3 different accounts: Ordinary Account, Special Account, and Medisave. The portion of the funds in Medisave is much less liquid because it is only usable for payment of medical bills, and cannot be withdrawn even after retirement.
In a way, the money is left untouched in that account unless you have some medical bills to pay. Or, you can choose to use it to pay for medical insurance (such as Medishield). The catch that most insurances have is that there's a cap (limit) to how much of the medical fees it covers.
Take a look here as an example. On the first page of the PDF file from the link, under the column "Medishield", it shows a column of figures stating the maximum coverage the plan offers for various types of medical bills. If the bill exceeds the amount, the difference will have to be forked out from your pocket.
If you were to scroll down to the third page of the PDF file, there's a column named "Aviva MyShield Plan 1" where the figures are mostly replaced by the phrase "as charged". In other words, you'll never have to worry about forking out anything from your own pocket in the event of paying medical bills. Furthermore, it provides coverages not offered by plans from other companies.
It is no coincidence either, that this plan has the highest premium of all - $142 - displayed in the PDF file. Sounds like a substantial amout, but let's do some maths first. A typical Engineering fresh grad earn a pay of about $2500 per month. The amount that goes into Medisave would thus be 6% of the monthly pay (check here if you don't understand where the figures come from), which in this case would be $150. Most of us (Engineering fresh grads) are able to afford this premium.
Considering that the portion of the pay which cannot be touched, safe for medical bills, can be used to cover potential fees completely. No worrying about having to top up excesses from your bank account. I personally find this a pretty good deal, and intend to swtich to this plan after securing a job.
A news report on this issue can also be found in The Straits Times, 6th July Wednesday, page H22. Do take a look. Managing finances is quite important at this stage of life. Of course, it'll be more prudent to consult a professional first before doing anything.
Disclaimer: I'm not working as a financial advisor.
posted by Tengkia | 11:12 pm
|
Level of response: 0
Level of response: 0
Post a Comment