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(20-12-2010, 10:04 AM)aspeed Wrote: ops, you are right. Thanks for correcting.
Previously it was "They can withdraw their SRS monies over 10 years from the prevailing statutory retirement age." but in 2008 they change the wording to "that was prevailing at the time of the first contribution."
http://app.mof.gov.sg/data/cmsresource/S...202008.pdf
No prob. And this was an important revision as the pain of locking up the funds was a major bugbear for prospective account holders. The revision would alleviate this uncertainty. (esp since we may end up expiring instead of retiring if the statutory retirement age keeps going up with the current trend)
bb88 - Nice summary you have consolidated anyway. The $1 contribution is indeed a way to lock in the age, though sooner or later one will have to take sides. I think whether SRS is good, it really depends on the respective styles of money management individually. For the unitiated in financial matters, one could also do a top up to SA to enjoy the 4% automatically assuming the same constraint of funds being locked up. In such cases then probably its better not to put into SRS, esp if the effective tax reduction adds up to less than that.
Another thing that comes to my mind which I thought may be useful for those bordering on indecision. If you look at the the income tax rate from 2003 till date, it has been reducing quite stably. If this continues one would be taxed even less upon reaching withdrawal age. Of course, this is premised upon the trend continuing. It gets even more interesting if you factor in the future value of money, where a rational person should logically choose to be taxed in the future rather than now, given an exactly same tax rate on the same amount of money.
Of course, if income tax rate spikes instead, that is the unsaid risk that will inevitably have to be taken. I'm guessing, if that happens, something extraordinary may have happened to Singapore?