*Official* BBCWatcher club

[DevilPlate]

It isn’t really weird. Historically speaking, polls underestimated trump and this time is the same. Americans clinches on Trump to make America great again. His marketing slogan actually works and resonates with majority of American it seems. People looks for hope and Trump gives them, whether it will make them great again doesn’t matter. Just like buying toto, it doesn’t matter you win or not, but you buy the hope anyway.

Largely because Biden admin screw up big time.
So many ongoing wars and high inflation upset alot of middle class and retirees.

 

[highsulphur]

Largely because Biden admin screw up big time.
So many ongoing wars and high inflation upset alot of middle class and retirees.

I agree. His last and biggest mistake was to seek re election

 

[CrashWire]

It isn’t really weird. Historically speaking, polls underestimated trump and this time is the same. Americans clinches on Trump to make America great again. His marketing slogan actually works and resonates with majority of American it seems. People looks for hope and Trump gives them, whether it will make them great again doesn’t matter. Just like buying toto, it doesn’t matter you win or not, but you buy the hope anyway.

I agree. His last and biggest mistake was to seek re election

I think the Democrats overestimated just how many Americans would elect a black woman.

What I found crazier was how badly Trump could screw up his rallies and campaign messaging, and still win.

 

[demoforce1]

I think the Democrats overestimated just how many Americans would elect a black woman.

What I found crazier was how badly Trump could screw up his rallies and campaign messaging, and still win.

at least he almost die
so, well deserved

 

[DevilPlate]

at least he almost die
so, well deserved

I believe it is God’s will

 

[BBCWatcher]

Channel News Asia reports on the probable Trump trade war. Here's a short paragraph from their report:

“Obviously, Asia is very dependent on global trade … Apart from China … Singapore (is) really exposed … and Malaysia and Vietnam, among others,” [Alex] Holmes[, regional director for Asia Pacific at Economist Intelligence,] told CNA’s Asia First.

Yes, I'm also concerned about the impact of a trade war on Singapore.

 

[BBCWatcher]

Reuters reports that China’s exports to the United States and Europe surged in October. Analysts believe importers and exporters are trying to “front run” a looming Trump trade war, shifting inventories across borders.

 

[Eternit]

Hi @BBCWatcher, just wanted to hear your advice on this. About 1 or 2 years ago, I took the advice you gave to everyone to start an SRS account and deposit $1, so the retirement age is locked in. I did that and kept it there without doing more. In recent times my salary has increased, and for YA2023 my personal income tax rose due to this. I am thinking of ways to reduce my income tax for next year, and one method is to top up $15.300 to my SRS account by 31 Dec 2024. Correct me if I'm wrong up to this point.

Now, I am a bit hesitant of doing it, even though I understand that I will surely get a tax reduction upon executing it. This is because. 1) I don't know where best to invest my SRS money after putting in the 15K and 2) it kinda feel like I'm locking away this sum of money for retirement, and CPF is already doing that, I just don't like this feeling (this could be more of psychological issue). I'm not so sure if doing it will be worth it for the tax benefits.

I have no immediate need of 15K. In fact, I have a healthy amount of emergency fund that can cover myself and the family for at least 3 years. I know topping up the SRS is probably the right thing to do, I am just trying to convince myself. What do you think?

 

[BBCWatcher]

About 1 or 2 years ago, I took the advice you gave to everyone to start an SRS account and deposit $1, so the retirement age is locked in.

Good move! That means you have the option to start withdrawing from your SRS account from age 62 (if you beat that particular deadline). Only an option, not an obligation.

I did that and kept it there without doing more. In recent times my salary has increased, and for YA2023 my personal income tax rose due to this. I am thinking of ways to reduce my income tax for next year, and one method is to top up $15.300 to my SRS account by 31 Dec 2024. Correct me if I'm wrong up to this point.

Any amount up to the maximum is eligible for tax relief, assuming you have taxable income still to be relieved and haven't hit the $80,000 tax relief cap for the year.

Now, I am a bit hesitant of doing it, even though I understand that I will surely get a tax reduction upon executing it. This is because. 1) I don't know where best to invest my SRS money after putting in the 15K and 2) it kinda feel like I'm locking away this sum of money for retirement, and CPF is already doing that, I just don't like this feeling (this could be more of psychological issue). I'm not so sure if doing it will be worth it for the tax benefits.

It's not much of a gamble. You can still withdraw the money if you really need it for some urgent expense, although there's a slight penalty in that event. And if disaster strikes and you were diagnosed with a terminal illness or pass away, you (or your family) can withdraw all your SRS account balance immediately, and up to $400K of it would be tax free. In that sense it's approximately like a life insurance policy with TPD.

I have no immediate need of 15K. In fact, I have a healthy amount of emergency fund that can cover myself and the family for at least 3 years. I know topping up the SRS is probably the right thing to do, I am just trying to convince myself. What do you think?

3 years of emergency reserve is amazing! I think you've kind of answered the question already. If this money would otherwise be in the 11.5% tax bracket, for example, then you're getting back $1,759.50 of it next year as cold hard cash (income tax you don't have to pay).

 

[Eternit]

Good move! That means you have the option to start withdrawing from your SRS account from age 62 (if you beat that particular deadline). Only an option, not an obligation.

Any amount up to the maximum is eligible for tax relief, assuming you have taxable income still to be relieved and haven't hit the $80,000 tax relief cap for the year.

It's not much of a gamble. You can still withdraw the money if you really need it for some urgent expense, although there's a slight penalty in that event. And if disaster strikes and you were diagnosed with a terminal illness or pass away, you (or your family) can withdraw all your SRS account balance immediately, and up to $400K of it would be tax free. In that sense it's approximately like a life insurance policy with TPD.

3 years of emergency reserve is amazing! I think you've kind of answered the question already. If this money would otherwise be in the 11.5% tax bracket, for example, then you're getting back $1,759.50 of it next year as cold hard cash (income tax you don't have to pay).

Thanks.

 

[deepblueli]

Hi @BBCWatcher, just wanted to hear your advice on this. About 1 or 2 years ago, I took the advice you gave to everyone to start an SRS account and deposit $1, so the retirement age is locked in. I did that and kept it there without doing more. In recent times my salary has increased, and for YA2023 my personal income tax rose due to this. I am thinking of ways to reduce my income tax for next year, and one method is to top up $15.300 to my SRS account by 31 Dec 2024. Correct me if I'm wrong up to this point.

Now, I am a bit hesitant of doing it, even though I understand that I will surely get a tax reduction upon executing it. This is because. 1) I don't know where best to invest my SRS money after putting in the 15K and 2) it kinda feel like I'm locking away this sum of money for retirement, and CPF is already doing that, I just don't like this feeling (this could be more of psychological issue). I'm not so sure if doing it will be worth it for the tax benefits.

I have no immediate need of 15K. In fact, I have a healthy amount of emergency fund that can cover myself and the family for at least 3 years. I know topping up the SRS is probably the right thing to do, I am just trying to convince myself. What do you think?

You can use SRS to buy stock, ETF or SSB. So at a minimum, you can earn guaranteed 2%+ in SSB using SRS. Where do you put your emergency fund in? I think you can do the same with SRS too.
You can also treat it as retirement too as you can start withdrawing from age 62 onwards and delay your CPF life withdrawal to supplement it. Not sure if solely depends on CPF is enough for you though given now Trump is elected, inflation will run high.

 

[BBCWatcher]

You can use SRS to buy stock, ETF or SSB. So at a minimum, you can earn guaranteed 2%+ in SSB using SRS.

OK, but don’t do that. SRS accounts are (generally) inherently long-term accounts. Invest those dollars in long-term vehicles. SSBs are not that.

You can also treat it as retirement too as you can start withdrawing from age 62 onwards and delay your CPF life withdrawal to supplement it.

You generally shouldn’t start withdrawing from a SRS account until the first January following the last year of taxable income. For example, if you permanently retire on September 30, 2040, then you’d probably start SRS withdrawals in January, 2041.

Not sure if solely depends on CPF is enough for you though given now Trump is elected, inflation will run high.

If President Trump hikes tariffs then he’ll certainly push prices higher in the U.S. The effect on Singapore is much more ambiguous. If exports from Singapore to the U.S. are affected (which would probably mean U.S. abrogation of the Free Trade Agreement with Singapore) then the Government of Singapore may feel forced to retaliate, hiking tariffs on U.S. imports. That would raise inflation here in Singapore on those imports from the U.S. The U.S. is a pretty big trading partner, so there are some products that’d get more expensive. I just bought a 220-240 volt small kitchen appliance made in the United States, and if that appliance had been 30% more expensive (for example) I probably wouldn’t have bought it. On the other hand, higher tariffs levied by the U.S. would reduce demand for goods manufactured in China and elsewhere. U.S. demand is so big that even a small reduction in demand could make many suppliers more desperate to sell their products elsewhere, including here in Singapore. And that would mean lower prices for us on non-U.S. produced goods. It’s also possible the government could take the higher tariffs it collects and rebate that money to households, much like the GST rebates.

There’s also the fact Trump can only serve a maximum of 4 years. While he can do significant damage even in a fraction of his term, he’s still time limited. Your retirement planning horizon is typically much longer.

 

[demoforce1]

OK, but don’t do that. SRS accounts are (generally) inherently long-term accounts. Invest those dollars in long-term vehicles. SSBs are not that.

You generally shouldn’t start withdrawing from a SRS account until the first January following the last year of taxable income. For example, if you permanently retire on September 30, 2040, then you’d probably start SRS withdrawals in January, 2041.

If President Trump hikes tariffs then he’ll certainly push prices higher in the U.S. The effect on Singapore is much more ambiguous. If exports from Singapore to the U.S. are affected (which would probably mean U.S. abrogation of the Free Trade Agreement with Singapore) then the Government of Singapore may feel forced to retaliate, hiking tariffs on U.S. imports. That would raise inflation here in Singapore on those imports from the U.S. The U.S. is a pretty big trading partner, so there are some products that’d get more expensive. I just bought a 220-240 volt small kitchen appliance made in the United States, and if that appliance had been 30% more expensive (for example) I probably wouldn’t have bought it. On the other hand, higher tariffs levied by the U.S. would reduce demand for goods manufactured in China and elsewhere. U.S. demand is so big that even a small reduction in demand could make many suppliers more desperate to sell their products elsewhere, including here in Singapore. And that would mean lower prices for us on non-U.S. produced goods. It’s also possible the government could take the higher tariffs it collects and rebate that money to households, much like the GST rebates.

There’s also the fact Trump can only serve a maximum of 4 years. While he can do significant damage even in a fraction of his term, he’s still time limited. Your retirement planning horizon is typically much longer.

sample of long-term vehicles?

 

[BBCWatcher]

sample of long-term vehicles?

In no particular order: MBH, ES3, Amundi and Lion Global (Dimensional) global stock index funds (through the lowest cost SRS compatible channels).

 

[ericcsn]

Now that Trump is (going to be) in power, what is stopping him from slapping punitive taxes or levies on ETF and US stocks that are owned by foreigners when they are withdrawn or while they are held because he sees it as a source of income to extract from non-Americans.

Or arbitrarily decides that country A vs US exchange rate is not in his country's favour, and demands your country govt take actions to support and push up US currency, lest he take targeted and impactful tariffs against you as well as ordained divestments (double the punishments).

Or not pay or pay in full maturing US treasury bills. After all he was a 6 times bankrupt previously, so he is unafraid of the consequences of bankruptcy (that he did to himself) so why not to the country too. And he has the habit of not paying in full or not all contractors who did work for him.
.
There are all kinds of bizarre possibilities because this is Trump and there is nothing crazy nor scary that bothers him........

 

[BBCWatcher]

Now that Trump is (going to be) in power, what is stopping him from slapping punitive taxes or levies on ETF and US stocks that are owned by foreigners when they are withdrawn or while they are held because he sees it as a source of income to extract from non-Americans.

The two houses of the U.S. Congress, one of which is entirely up for reelection in 2026. Tax changes like that require Congressional approval. Trump’s party will have (at most) token control over the lower house, and it could barely function at that level. As I write this there’s still about a 10% chance Democrats could control the House of Representatives outright.

Or arbitrarily decides that country A vs US exchange rate is not in his country's favour, and demands your country govt take actions to support and push up US currency, lest he take targeted and impactful tariffs against you as well as ordained divestments (double the punishments).

Currently the President has broad control over tariffs, and that’s why I’ve written about them. Importers and exporters are already scrambling since they too understand the risks.

There are all kinds of bizarre possibilities because this is Trump and there is nothing crazy nor scary that bothers him........

Sure, there are significant risks involved in a second Trump Administration. It wasn’t my choice. I prefer competent, non-corrupt, classically liberal and democratic governments. American voters narrowly decided otherwise.

There’s not a lot you can or should do differently from Singapore. I suppose if you work in a global trade sensitive profession then this’ll be a reminder to do what you should already be doing: be adaptable and flexible in employment opportunities, and maintain a 6+ month emergency reserve. If you want to increase that to 9+ months I wouldn’t argue with you. Long-term investing doesn’t change. Other posters have criticized me both ways: for being anti-S&P 500 and being anti-China or whatever. Hopefully now it should be clear why I’m pro-world. Just let the global index work its magic over the long-term.

 

[BBCWatcher]

I should add that mortgage interest rates could act quite strangely. I often feel too many residents of Singapore mismanage mortgage debt. They either buy too much/too expensive homes (with ABSD?!?) with high mortgage debt servicing, or they pay down low interest rate mortgages faster than required. How about a more balanced approach? Don’t get too crazy about buying more and more expensive homes, and then manage a smaller mortgage sensibly.

 

[Eternit]

In no particular order: MBH, ES3, Amundi and Lion Global (Dimensional) global stock index funds (through the lowest cost SRS compatible channels).

If I am already DCA-ing into VWRA using cash on Interactive Brokers, do you think it's wise to use SRS on Amundi Prime USA Fund on Endowus to hold for long term?

It does have quite a lot of overlapping holdings with VWRA though...

 

[ericcsn]

The two houses of the U.S. Congress, one of which is entirely up for reelection in 2026. Tax changes like that require Congressional approval. Trump’s party will have (at most) token control over the lower house, and it could barely function at that level. As I write this there’s still about a 10% chance Democrats could control the House of Representatives outright.

Currently the President has broad control over tariffs, and that’s why I’ve written about them. Importers and exporters are already scrambling since they too understand the risks.

Sure, there are significant risks involved in a second Trump Administration. It wasn’t my choice. I prefer competent, non-corrupt, classically liberal and democratic governments. American voters narrowly decided otherwise.

There’s not a lot you can or should do differently from Singapore. I suppose if you work in a global trade sensitive profession then this’ll be a reminder to do what you should already be doing: be adaptable and flexible in employment opportunities, and maintain a 6+ month emergency reserve. If you want to increase that to 9+ months I wouldn’t argue with you. Long-term investing doesn’t change. Other posters have criticized me both ways: for being anti-S&P 500 and being anti-China or whatever. Hopefully now it should be clear why I’m pro-world. Just let the global index work its magic over the long-term

i edited the original post but added the following.

When push comes to shove, he may just direct that the US$36T debt owed by US be forgiven
(by not paying or paying in full maturing US treasury bills). After all he was a 6 times bankrupt previously, so he is unafraid of the consequences of bankruptcy (that he did to himself) so why not to the country too. And he has the habit of not paying in full or not all contractors who did work for him.

 

[BBCWatcher]

If I am already DCA-ing into VWRA using cash on Interactive Brokers, do you think it's wise to use SRS on Amundi Prime USA Fund on Endowus to hold for long term?

No. Not unless you plan to retire in the United States or in a country the predominantly uses the U.S. dollar, or has a currency firmly pegged to the U.S. (like some of the oil producing countries in the Middle East). Pick a bond fund such as MBH if you want bonds, pick a global stock index fund, or some of both.