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I have blogged about the benefits of having an SRS account many times before and if you do not yet have an SRS account, you might want to think of starting one.
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If you are thinking of starting one before the end of the year to save on income tax payable next year, you might want to consider OCBC's offer.
First 2,000 customers to open a new OCBC SRS account with at least $8,000 will get a $30 Robinsons shopping voucher!
I love a good deal and I love sharing the news too.
Related posts:
1. SRS: A brief analysis.
2. Ways to reduce income tax.
3. Don't see money, won't spend money.
Not an advertorial.
Bloggy Award
22 comments:
The srs account needs to be opened thru a bank?
Possible to link it to dbs vickers? and use the funds to trade online as per normal?
Hi BP,
Yes, any of the three local banks: DBS, UOB or OCBC.
Also, you can have your trading account with DBS Vickers linked up to your SRS account so that you could buy stocks with your SRS money. :)
Benefits of having an SRS account !
The benefit is so little and only stupid people then put more monies or hard cash to stuck in there for this evil and greedy Regime to use to invest and they made more then 11% or more while give back just that peanuts (Goh Chok Tong wife famous remarks) lol.... :D
Hi Alan,
Remarks on politics aside, you are probably mistaken to think that contributions to SRS accounts are used by the powers that be.
We could use our money in the SRS account for investments to get higher returns. :)
Hi Capricorn,
My SRS account is with DBS. I don't remember paying any fee.
Anyway, they pay a lower interest for deposits in the SRS account, if I am not mistaken. So, that is an indirect fee. -.-"
Hi AK
What are the stock u would buy using your SRS money to generate LONG TERM dividend or return?
Ak,
Thanks for the info. I was seriously looking at opening a SRS account, the offer by OCBC does sweeten the deal.
Btw, I drop u a mail earlier today, just checking if you received it. Thanks !
Hi Kim,
Frankly, I am just allowing my SRS money to lie fallow now. It is one of my war chests for in case the stock market enters bear territory.
I think I will know what to buy if the time comes. :)
Hi Solace,
I just checked my mailbox. I didn't see an email from you.
Could you click reply to one of my emails to you earlier and copy/paste your latest email? I will be sure to receive your email then.
My email program has a very enthusiastic spam service.
Hi AK,
My views on SRS are heavily influenced by a post I saw on value buddies written by d.o.g.
Having the money locked up for such a long time is a big minus for me and unless there are reforms to the scheme, I am likely to give it a miss.
But really kind of you to inform your readers of the promotion as it might be suitable for some. Might even be the push they need to start opening an account. =)
Hi Stoical Keynes,
SRS is another tool to help us plan for retirement. Like with all tools, there are pros and cons. We will have to decide for ourselves if it makes sense. :)
AK,
It sure makes interesting reading on the comments ;)
I guess those who don't like SRS have nothing in common with these words:
Investing for the long term
Delayed gratification
Complain money rotting in the bank
I hate paying taxes
LOL!
Hi SMOL,
You always have a way with words. LOL.
There are probably many reasons why some don't like the SRS. I hope that they make sure the reasons are rational. If they are, well, then, I am willing to accept that the SRS is probably not a good tool for them. :)
AK, SMOL,
Thanks for the post on SRS. I actually resisted putting money in SRS for quite some time but this 2 years I started putting some in due to the points you just commented - one is reducing the taxes and the other is investing in the long term.
Cheers
Hi hjteo,
I am glad you see it the way we do. There are many positives about the SRS.
At the most basic, even if we do not invest, we are putting aside more money for our old age and paying less income tax in the meantime. :)
Just have a study about SRS.
The only benefit is tax saving, for those pay more than $80k, saving for the part put in SRS will be 11.5%.
No higher interest rate.
Have to lock till age 62, but 5% penalty is still lower than 11.5% tax saving. Especially, when take it as emergency fund, the worst, lose job and no need to pay for higher tax.
I think property investment is another key consideration. Because that needs huge sum of cash.
So I think people should do it after having 2nd or 3rd property. No restriction on stock investment.
The last question is, how to compare with SA? I remember we can make voluntary contribution to CPF too, higher interest rate, no early withdraw.
Hi Ah John,
With SRS, we still have the option of early withdrawal although with a penalty. With CPF-SA, early withdrawal is not allowed at all.
It is good that you are studying the various options and examining your own aspirations at the same time. The tools are out there but depending on what we are after, we have to decide if they are suitable for us. :)
Hi Ak,
Some questions and hopefully you can help shed some light on the mysterious srs.
Firstly, dividend made from using srs to buy suntecmfor example, can I confirm that the dividends go back to srs?
Subsequently , would the dividends be considered as contribution for the year or is it considered separately ?
Thirdly, if the dividends goes back into srs and when it is withdrawn at 62, are the dividends taxed ? Which does not make sense since they are already tax deducted upon paying out o us shareholders. This i assume that srs is smart enough to clearly differentiate money contributed and money generated from the stock market even though they are from the same srs account number ?
Thanks !
Hi Ernest,
Dividends for investments made using money in the SRS account will become a part of the total funds in the SRS account.
Dividends will not be counted as voluntary contributions. For example, I have dividends from my investments in my SRS account but I am still allowed to contribute the maximum of $12,750.00 each year.
When withdrawing funds from our SRS account at retirement, to my knowledge, as long as the amount withdrawn is above the non-taxable bracket, we will have to pay a tax. Even if some of the money is made up of dividends collected over the years, there is no special treatment.
Please check with the authorities and correct me if I am wrong. :)
If we think of dividends as rate of return on the srs funds invested, then there is no difference in the tax treatment between investing using srs funds or non srs funds. (subjected to changes in tax rates of course)
SRS is a tax deferral scheme. 10,000 pretax funds invested to earn a 5% dividend yield and and subsequently taxed is no different from investing it on a post tax basis. The math is multiplicative.
Dear AK,
Would you like to blog about the new SRS yearly contribution limit? I'm asking because I read your blog and your audience appears to be very wide. It will be doing your readers a service.
I just found the website here:
https://www.iras.gov.sg/irashome/Individuals/Locals/Working-Out-Your-Taxes/Special-tax-schemes/Supplementary-Retirement-Scheme--SRS-/SRS-contributions/
For your consideration, lah. :)
TS
Hi Teck,
Thanks for sharing.
I already updated my blog post on the SRS earlier this year in February. :)
SRS: A brief analysis.
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