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ASSI's Guest bloggers

Win and win again with SRS.

Saturday, February 18, 2017


I blog about the SRS pretty often and how my SRS account is a war chest. 

I also said before that I don't mind having quite a bit of money idling and waiting for opportunities. 

When opportunities come knocking, I pounce!




 Chatting with a reader in FB.

I get to save on income tax and invest for higher returns. 

It is a win win situation with both winners being me! 

Greedy AK! 


Bad AK!




SRS money cannot be withdrawn until age 62 unless we are OK with incurring a penalty. 


So, it would be good to use the money to buy into businesses which we believe will still be around when we are 62. 

This might sound amusing but it is the truth.



Of course, the businesses should pay meaningful dividends and offer sustainable yields that at least mimic CPF interest rates.

In a nutshell, invest with our SRS money when the time is right. Don't speculate with it. 




SRS money is meant to be our second retirement nest egg, after the CPF. 

Don't play play.

Being unemployed, I will not be contributing to my SRS account anymore. 


So, any growth in my SRS account will be purely organic henceforth.





Why win once when we can win twice with the SRS? 


Win and win again with SRS?

I like.


Related posts:
1. SRS, CPF and rights issues.

2. SRS: e-book and analysis.
3. How AK uses his SRS money and why?

11 comments:

pf said...

There are a few retirement income type schemes nowadays that can use SRS. Thinking of buying in.

Eye of the Storm said...

Thanks ASSI,

Wish the SRS limits could be higher...

AK71 said...

Hi pf,

Financial advisers still need to "tan jia". If the returns are guaranteed and mimic the CPF-SA, that is good enough for me. That's what I tell my bankers but none of them could find anything like that. ;p

AK71 said...

Hi EOTS,

I believe the SRS, like the CPF, is not to benefit richer folks. A higher cap in either one would benefit the richer folks more than regular folks. That's my impression, anyway. :)

pf said...

Already maxed out the cpf lo

AK71 said...

Hi pf,

Congratulations!

AK71 said...

Simeon Kong says...
AK , you got money in SRS and what is your strategy ?

AK says...
I blogged about this before.
I find the blog for you.

AK71 said...

Reader says...
For SRS, I see it as apart from cutting down income taxes, it’s also a opportunity lost:
1. No interest earn
2. Locked in till 62 yrs old, unless withdraw at 5% penalty
3. If SRS used to invest, capital gains are also taxable 50% when withdraw at 62 yrs

AK says...
SRS withdrawal is not taxable if we take out $40,000 max a year (from age 62)... over 10 years... $400,000 in total. If we have more than that, the remaining funds, we can buy an annuity for lifetime income and it is likely non-taxable. 🙂

AK71 said...

See:
https://singaporeanstocksinvestor.blogspot.sg/2015/01/tea-with-matthew-seah-lifelong-income.html

Ben said...

Hi all,

I am of view that SRS is considered as the second CPF. Hence, it is worthwhile adopting SRS as one of saving plan even though it is possible that there could be a change in the Government's policy on this aspect.

One should adopt flexible approach in accordance to the policy changes if implemented.

Ben

AK71 said...

Elvin says...
you do know your dividend income during retirement is also income, and should also be considered as part of the first S$20k p.a (for now) for the consideration of bringing to tax the SRS withdrawals right?

Keh Yi says...
i don't think this is accurate: IRAS website says only the following are taxable:

a) Dividends paid by co-operatives;

b) Foreign-sourced dividends derived by individuals through a partnership in Singapore. Conditions may apply. For more details, please refer to Tax Exemption for Foreign-Sourced Income;

c) Income distribution from Real Estate Investment Trusts (REITs) derived by individuals through a partnership in Singapore, or from the carrying on of a trade, business or profession in REITs.

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