The CPF board announced yesterday that the Medisave Required Amount (MRA) will be raised from the current $27,500 to $32,000 from 1 January 2012 onwards. This is a 16% increase.
Since 1 January 2004, CPF members who turn 55 and are able to meet the CPF Minimum Sum are required to set aside the MRA in their Medisave Account when they make a CPF withdrawal. If such members have less than the MRA in their Medisave Accounts, their Ordinary and/or Special Account balances in excess of the Minimum Sum has to be used to top up the MRA before they can withdraw the balance.
The requirement for members to set aside the MRA in their Medisave Account is to enable them to have enough savings to meet their healthcare needs during their old age.
The MRA is not a static figure but will be adjusted from time to time to factor for inflation.
Just this year (2011), the MRA was already increased from $22,500 to the current $27,500, a 22% increase.
At this rate we are going, I will probably need to accumulate in excess of $200,000 in my Medisave to meet the MRA when I turn 55 years old.