Posts: 9,841
Threads: 711
Joined: Mar 2012
Reputation:
64
(20-11-2012, 11:58 PM)Muck Wrote: Yes indeed, I believe the calculations are correct for immediate tax savings. Will have to keep in mind though that withdrawals would thereafter be taxable at half the applicable rate of your tax bracket in the year of the withdrawal.
Think I'll be opening an SRS this year-end. Notwithstanding the ltd investment options, I can still invest locally on a long-term basis.
IMO, on top of tax saving, the SRS serves as good facility for force saving. Once contributed, withdrawal is restricted.
“夏则资皮，冬则资纱，旱则资船，水则资车” - 范蠡
Posts: 2
Threads: 0
Joined: Nov 2012
Reputation:
0
Now before dec30,can get $50 voucher if open Min $10K srs acct with OCBC
Bank will clawback if close acct within 1 year
Posts: 108
Threads: 4
Joined: Aug 2012
Reputation:
0
27-11-2012, 11:37 AM
(This post was last modified: 27-11-2012, 11:48 AM by snowcap.)
If you follow R. Kiyosaki's discussion on plans to be secure, comfortable and rich, SRS is an account to be comfortable. It is not a plan to be rich because if you plan to be rich, you want as much liquidity to maximise your investment opportunities and options. It is not a plan to be rich, because you can only contribute $12,750 (for Singaporeans) per year. How to be rich like that? It is also not a plan to be rich because if you are rich and post-retirement you are earning $200,000 per year, your SRS withdrawals will still be taxed.
But I still contribute to SRS because I have separate plans to be comfortable and rich. The tax savings, while small, are still better than nothing. The late Dennis Ng (RIP) also strongly advocated using SRS because if you think of it, the moment you transfer money to SRS, you get an instant guaranteed return of 7-20% with zero risk. This is the money that would otherwise have gone to the govt in taxes. Where to find 7-20% at zero risk? If you are smart and can generate further returns on the SRS funds, then the returns can potentially increase beyond 20%.
Personally I put my SRS into REITs and undervalued property shares.
SRS also is better than topup to CPF-SA for this reason:
If by some cruel circumstance you become jobless before 62 and desperately need to withdraw money (which you should not, if you had kept a rainy day fund, but say you already used up the rainy day funds...), you can withdraw the SRS with a 5% penalty. That means that if you are today in the 7% bracket, after you meet with hard luck and withdraw, you still are ahead by 2%. If you are today in the higher brackets, the penalty becomes relatively smaller.
Posts: 473
Threads: 18
Joined: Jan 2011
Reputation:
7
I opened a SRS last year with DBS. How do I top-up for this year? I cannot find any online facilities on DBS iBanking for SRS top up. Thanks !
Posts: 80
Threads: 1
Joined: May 2012
Reputation:
0
I usually drops the cheque into the cheque deposit box to contribute to my SRS. Quite effortless
Posts: 30
Threads: 3
Joined: Jul 2011
Reputation:
1
just to confirm- the tax applied on the SRS funds withdrawn should be the prevailing tax rate at the point of withdrawal right?
Posts: 3,732
Threads: 6
Joined: Oct 2012
Reputation:
95
It will be your prevailing marginal income tax rate. Hence best to be jobless when withdrawing SRS
Before you speak, listen. Before you write, think. Before you spend, earn. Before you invest, investigate. Before you criticize, wait. Before you pray, forgive. Before you quit, try. Before you retire, save. Before you die, give. –William A. Ward
Think Asset-Business-Structure (ABS)
Homepage
PR Newswire
