SRS

[radiantmum]

What do you invest for your SRS account?

[30plus]

Some ETF & Reits. Reason being - it is not that convenient for you to see the holdings & available cash in the account. So I buy something and let it rot there.

[starlight1968sg]

radiantmum:

What do you invest for your SRS account?

Some years ago when the times were good, I bought single premium plans. Now I leave it in the bank a/c to \"rot\". :roll:
You have any good lobang to recommend ?

[daddy2007]

I am using it to invest in ETFs and some Blue Chip Stocks

[Angelight]

starlight1968sg:

Some years ago when the times were good, I bought single premium plans. Now I leave it in the bank a/c to \"rot\". :roll:
You have any good lobang to recommend ?

There are single premium plans available that you can use your SRS account. Let me know if you need suggestions to get better returns more than 2% per annum.

[yupapa]

SRS can be use for Shares now (same counters as CPF). I bot shares with SRS money, better return than let it 'rot'


BTW, regret putting money in SRS a/c, when wanna withdraw early, the penalty is outrages, govt tax you the full amt, including profit that you've earn through investment, it is like capital gain tax :x

[daddy2007]

yupapa:

BTW, regret putting money in SRS a/c, when wanna withdraw early, the penalty is outrages, govt tax you the full amt, including profit that you've earn through investment, it is like capital gain tax :x

The money in your SRS is suppose for your usage after you turned 62.

One can easily saved $800 - $1000 in Income Tax if top up with full aount each yr

[yupapa]

while there is saving, but at the cost of inflexiblity, can't respond to emergency or if the govt keep raising the retirement age.

Just feel that the 'penalty' should not be so high..

daddy2007:

yupapa:

BTW, regret putting money in SRS a/c, when wanna withdraw early, the penalty is outrages, govt tax you the full amt, including profit that you've earn through investment, it is like capital gain tax :x

The money in your SRS is suppose for your usage after you turned 62.

One can easily saved $800 - $1000 in Income Tax if top up with full aount each yr

[30plus]

i would say the penalty is reasonable. being an optional retirement scheme, it does not suit everyone. it is not a saving account for your emergency money as well. so you need to make a decision before you put in money.


if your marginal tax rate is less than 8.x% bracket, you should consider not using it because the saving is small.

now assume you are in this bracket, you save 8% tax upfront. at retirement, you can spread the withdraw in 10 years and will be taxed for 50% of it. assuming you do not have income at that time and tax structure does not change, rough computation can show that you will pay pretty negligible tax.

if you need to withdraw early, then the question is why? you need to buy a house urgently? need to pay a ransom? to me, the most reasonable case is that you suddenly lost income. if this is the case, then you need to pay 5% penalty + currently tax. if you lost income, then the total penalty is not far away from the tax you have saved.

btw, once you open the SRS account, your withdraw age is fixed. further increase on retirement age does not have impact on you.

[MrsTan]

Yap, the withdrawal age is locked in the year u open the a/c, I just opened it last year and put in $1k in case they revised the retirement age this year.