Category: SG Budget Babe

How can I cope with rising healthcare costs?

The answer isn’t as simple as “buy more insurance”. Here’s why.

Longer life expectancies. Rising healthcare costs. The sandwiched generation.

Add that together and you basically have an equation for disaster. 

Singapore officially has the world’s longest life expectancy, but most spend at least 10 or more years of that in ill health. And that’s easily one of the fastest ways to deplete your savings, especially when you’re faced with large hospital bills for medical treatment. Depending on what you’re hospitalised for and the length of your stay, essentially what took you years to save up could easily be gone with your bill in a matter of days.

The report by the Health Insurance Task Force revealed several interesting findings that were believed to contribute to the rising healthcare costs. These included

  • the choice of hospital (private hospital bills were typically 2 to 4 times higher vs public hospitals)

  • over-charging and inappropriate treatment

  • those with IP riders incurred 20% to 25% higher medical bills vs those with IPs only (insulation from medical costs resulted in little incentive for policyholders to manage their health and medical costs)

And as much as consumers believed that insurers make good profits from health insurance policies, the statistics show otherwise. In fact, most of the insurers had been making losses from underwriting integrated shield plans over the past few years.

Thus, with 
medical inflation at an unsustainable 10%, the Ministry of Health (MOH) has implemented several changes, namely 

  • implementing compulsory co-payment (patients with riders co-pay 5% and those without riders co-pay 10% of the bill, and this should help reduce the “buffet” practice)

  • introducing benchmarks for medical fees, and 

  • encouraged insurers to use a panel of preferred healthcare providers.

How can I protect myself against rising healthcare costs in Singapore?

I believe fees will continue to rise – both in terms of hospital bill sizes and our insurance premiums. The top health risk factors that influence medical cost globally are metabolic and cardiovascular risk, dietary risk and emotional or mental risk. So the answer certainly isn’t just to buy more insurance, but we need to be proactive in owning our health as well.

Here are a few ways we’re protecting ourselves against it:

1. Maintain a healthy diet.

It is easy to simply opt for fast (or processed) food these days, especially during hectic work schedules, given how cheap and convenient these foods are. However, don’t make the mistake of neglecting your diet, for a sustained unhealthy diet is one of the leading causes of illnesses and deaths in the developed world.

For instance,

       foods high in sodium and saturated fat can lead to high blood pressure

       a diet that contains high calories and sugar can cause type 2 diabetes

       you’re at a higher risk of cancer caused by immune deficiency if you do not obtain enough vitamins and nutrients in your diet

       consuming too much proteins high in animal fat increases your chances of developing coronary heart disease

Instead of feeding our bodies with excessive junk like instant noodles and potato chips, we should reduce our dietary risk by opting for healthier foods. And if healthy lunches in the CBD is depleting your monthly budget, try meal prep instead. Preparing our own meals at home not only saves us money, but also allows us to control the amount of oil / sugar / salt used.

It is worth setting aside a few hours each week (usually on weekends) to do meal prep for the rest of the week.

2. Exercise regularly.

“But I’m too busy and don’t have time to exercise!”

I know how tough it is to squeeze in exercise when you’re already running on a packed schedule (especially if you have a side hustle like me). But our busy lifestyles should not be an excuse. If you wish to be around with your loved ones longer, then we should be proactively setting aside time to exercise and keep fit.

One way to do it is to schedule in exercise either early in the morning before work, during your lunch hour (if there’s a gym near your office), or towards the end of the day.

In my case, I tried signing up for yoga classes in the past, but soon found that the exercise time plus travelling to and fro was too much for me to handle, so I’ve recently opted for home workouts by following Youtube fitness channels instead. This has allowed me to complete workouts within 30 – 40 minutes, which is a lot more easier for me to keep up with instead of having to allocate 2 – 3 hours for a fitness class outside.

3. Set aside emergency funds to complement your insurance cover.

Given how expensive hospital bills are, you can and should opt to outsource this risk to a third party. Integrated shield plans help to mitigate such bills, and you can also add on riders for a greater peace of mind.

With the new 5% or 10% co-payment scheme in place, make sure you’ve saved up sufficient emergency funds that you can tap on for medical bills as well, in the event of any unfortunate incidents. Do not simply assume that your hospital bills will be paid in full even with a rider.

4. Go for regular health checkups. 

Early diagnosis not only allows for early (and usually less aggressive) treatment, but can also help reduce healthcare costs. It also gives you a better chance of fighting and recovering from the illness.

5. Pay attention to your emotional and mental well-being.

If you’re in a high-pressure job, then you might want to think about whether the cost of your health is worth it in the long-term. One of my friends experienced this recently – after she switched her jobs, her blood pressure and cholesterol levels finally went down. So if your job is causing you too much health problems and you find yourself falling sick more frequently than before, then it might be time to do a health check and consider if your job is truly worth the sacrifice.

Nothing is more valuable than good health.

Hospital claims are more common than you think!

At the end of the day, our best bet against rising healthcare costs would be to ensure we’re adequately protected and to proactively manage our diet and lifestyle.

After all, prevention is much better than cure.

P.S. Feeling lost about why your insurance plan now has stuff like pre-approvals and panel specialists? Keep a lookout for my next article on how the changes affect us, and what to do next!

Disclosure: This post is written in collaboration with Aviva as part of their educational outreach efforts.

Bond yields have now fallen. Check out Capital Plus yielding 2.13% p.a. over 3 years instead

With all the uncertainty in the markets over COVID-19, there are fears that we may start sinking into an economic recession. When this happens, there will always be people who are inevitably worried and wish to minimize their risks. But if the rates offered by fixed deposits aren’t your cup of tea, and you’re not keen to increase your equity exposure at this point, then perhaps short-term endowment plans might be an option.
In the current environment of extremely low interest rates, short-term endowment plans have been making a comeback, especially for those who are unwilling to take any risks in the equity markets right now. If that sounds like you, then you might want to know that one of the latest products in the market to take note of would be Capital Plus by NTUC Income. Read on to find out!

Details that you need to know before deciding whether this product would be right for you:

§  a 3-year single premium endowment plan

§  provides a guaranteed yield at maturity of 2.13%^ p.a.

§  insurance coverage for death & total and permanent disability (TPD before age 70), during the policy term

If you’ve a lump sum of cash on hand and no idea where to put it, this could be a good option for the short term. Do note that as with all endowment plans, you should only put in funds that you do not need in the near term to avoid early termination penalties.

Aside from having capital guaranteed at the end of the policy term, you are also entitled to the compounded interest at a rate of 2.13^% p.a., while enjoying insurance protection throughout the duration of your policy at the same time for an extra peace of mind.

Of course, do make sure that you’ve already maximised your bank savings account limits first to claim your bonus interest with no lock-up and liquid flexibility. For anything more which you do not need in the short term (and yet you do not wish for this sum to lose out to inflation), then NTUC Income’s Capital Plus might just be your best bet right now.

With its short maturity period of 3 years, this should appeal to those who are saving up for the down-payment of your upcoming BTO, wedding or even your child’s preschool fees, especially if you’re not able to stomach the volatility in the stock market right now.

The PROS of Capital Plus

The most important point is that your capital is guaranteed, as long as you hold onto the plan for the next 3 years with no policy alterations or claims made.

No medical underwriting is required, and you can get started from as little as $5,000 for online applications.

The downside? As with every endowment policy, if you were to terminate the policy before your 3 years is up, you may receive lesser than the premium you’ve paid.

Where can I get it?

The good news is that you can now purchase it online via their Online Life insurance platform. Capital Plus is only available for a limited period based on a first-come-first-served basis, so do act fast if you want to get your hands on this, especially with the minimum premium starting from as low as just S$5,000 for online applications.

^ The guaranteed yield at maturity of 2.13% p.a. will be paid out at the end of the 3 years policy term, provided that the insured survives at the end of the policy term, with no policy alterations or claims made during the entire policy term.

Disclosure: This post is in collaboration with NTUC Income. All opinions are that of my own. The information is meant purely for informational purposes and should not be relied upon as financial advice. As my life circumstances differ from yours, you should seek advice from a licensed representative for customized advice on your financial needs.

Protected up to specified limits by SDIC.

This advertisement has not been reviewed by the Monetary Authority of Singapore.

Information is correct as at 27 March 2020

3 Moves To Make Your CPF Work Harder For You

 Did you know? More Singaporeans are making cash top-ups to their own CPF accounts and that of their loved ones, with over 1.6 billion in the first 10 months of 2019.
I’m definitely part of that statistic, as I’ve been topping up $7,000 to my CPF Special Account (SA) every year. Aside from the tax reliefs, this move was also instrumental in helping me to compound my CPF monies at a much faster rate.

If you aren’t already doing so, it might make you wonder if you’re missing out on something. But before you simply follow the herd, it is important to understand why we’re doing so, and then decide if it works for your situation too.

In my case, I started my CPF journey in 2014, after speaking to many wiser and older folks (including my dad). I got to understand the need to optimise my CPF early enough, in order to leverage on its benefits for my retirement.

One of the first moves I made was to:

Make cash top-ups to my CPF

I’ve been topping up a specific sum of $7,000 without fail each year. Why $7,000? Because that’s where I get maximum tax relief from making cash top-ups. 

For those of you who don’t know – if you are making cash top-ups for yourself, you can enjoy tax relief equivalent to the amount of cash top-ups made, up to $7,000 per calendar year (until you’ve reached the prevailing Full Retirement Sum).

If you are also making cash top-ups for your loved ones – parents, parents-in-law, grandparents, grandparents-in-law, spouse and siblings, you can enjoy additional tax relief of up to $7,000 per calendar year. You can read more about the Retirement Sum Topping-Up Scheme here.

With the first $60,000 of your combined CPF balances ($20k from your Ordinary Account) earning an additional 1% a year, that also means that the sooner you get to that $60,000 milestone, the more years you get to earn that 5% (SA) and 3.5% (OA) interest. 

The hack is to leverage on this extra 1% interest by reaching $60,000 as soon as possible, so you can leave it to compound for longer.

Cash top-ups help you to increase your CPF savings, which then allows you to (i) earn more interest and (ii) compound that sum faster. The sooner you start, the more it’ll grow.

The next move I made was to:

Transfer CPF savings from my OA to SA

If liquidity isn’t a key issue, then transferring from your Ordinary Account (OA) to Special Account (SA) makes a lot of sense because you get more interest. But if you need the funds in your OA to pay for your housing (whether now or in the future), then you can also do a calculated transfer, whereby you leave some funds in your OA just in case.

That’s what I did. When I first started on my CPF journey, I wasn’t sure how much my future house would cost me (will we be able to get a BTO? Or will we need to get resale, considering how old our parents are?). As such, I transferred a bulk of my OA funds to my SA, leaving just enough so that I have the option of using my CPF to pay for my house if we needed to.

Now that my house is settled, I’ve opted to leave enough in my OA to pay for a year of my mortgage. This serves as an emergency fund, just in case we ever run into cash liquidity issues, especially given the current economic climate. I then transferred the rest of my OA savings to my SA, to grow my pot of gold for retirement.

My dad also made a strategic move with his CPF, which was to:

Delay his starting payout age

As my dad did not have much retirement savings on his own, mainly due to an unexpected medical condition and treatments that depleted his savings, he always believed that CPF LIFE would become one of his core retirement income streams when he retires. The monthly payouts that he receives from it for the rest of his life would go a long way towards paying for his living expenses.

As he was still working and didn’t need the extra income immediately then, he chose to delay his starting payout age (at 65) so that he could receive a higher payout later on.

As for us, we are glad that he has CPF LIFE, because if not, he would be completely dependent on me for his monthly allowance in future. This would have been extremely difficult because I too, have my own bills to pay and 4 other dependants to support.


This was what my dad told me, when I asked him why he did not start his monthly payout when he was able to at age 65. Another factor was that because he delayed his CPF payouts, he was motivated to continue working for another 2 years instead of retiring when he could, and that helped him to accumulate more funds as well.


You decide what you want your CPF to be

For people like me, CPF is a fantastic safety net to ensure we have our basic retirement needs covered. But for some others, it might not be, especially if you’re a high-income earner and can get better returns outside of what CPF is offering. In that case, then it probably makes sense to channel your funds elsewhere and build up your own retirement fund.

But not everyone has that luxury. Some of us (especially if you’re the sandwiched generation stuck between supporting your children and elderly parents) struggle to have enough left to save for our own retirement.

Which is why you have to decide what works best for you. You’re in full control of what you choose to do with your CPF, and whatever you act on now will determine your returns later. For instance,

  • If you choose to wipe out your OA for your house, then you have to be prepared to have less in your retirement savings. This in turn may translate to lower monthly payouts during your retirement. 

  • If you choose to make cash top-ups and OA-to-SA transfers early, then you get to take advantage of more interest paid to you and thus grow your retirement savings significantly.

There are many ways to utilise your CPF, but just like my dad, I intend for CPF LIFE to be one of my core streams of income when I retire (together with stock and shareholder dividends). Which is why it makes sense to start accumulating more money in my SA beyond my usual salary contributions –> so that I can achieve the Full Retirement Sum earlier –> and then let the 4% base interest pay for future incremental adjustments.

What other CPF moves do you guys make?

For more tips on what you can do with your CPF, head over to their Facebook page and Instagram here.

This post is written in collaboration with CPF Board. All opinions are that of my own, showcasing my own personal journey of actions that I’ve already made prior to this.

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