*Official* Shiny Things club

[limster]

Even if you don't intend to contribute regularly, start a SRS account and contribute a small amount to lock in the withdrawal age.

If by end of the year, Ministry of Finance declare that SRS withdrawal age changes from 65 to 62, and you have not made your first contribution before that, then you lugi and can only withdraw from 65 onwards.

Source: http://www.mof.gov.sg/cmsresource/srs/SRS_Booklet%20-%2018Feb11.doc

Thats very helpful advice. Thanks

 

[djchris]

Thats very helpful advice. Thanks

No problem. Not saying that SRS policies are often changed. But best to err on the side of caution.

 

[af7680]

Even if you don't intend to contribute regularly, start a SRS account and contribute a small amount to lock in the withdrawal age.

If by end of the year, Ministry of Finance declare that SRS withdrawal age changes from 65 to 62, and you have not made your first contribution before that, then you lugi and can only withdraw from 65 onwards.

Source: http://www.mof.gov.sg/cmsresource/srs/SRS_Booklet%20-%2018Feb11.doc

Indeed . Thank you for helpful info . Didn't know that !
And also very good idea to move shares to Cdp account

 

[Shiny Things]

Yikes. I was hoping for a prolong bear market so that I can buy more stocks when I am young at low prices. :X

Shhh, don't say it out loud! (But this is true, even if it's counterintuitive - for young investors, you'd rather see stocks go down than up. That way, you can buy more stock at a lower price when you're young, which means more money at retirement.)

I'm curious. The way I see how the US is handling its debt situation is nothing more than just kicking the can down the road. It's just a seemingly endless process of raising the debt ceiling.

Could they have done something... 'better'?

Yeah - really the best thing would have been for them to tear up the debt ceiling entirely, because it does absolutely nothing for financial management. It just stops them from paying for stuff they've already budgeted for.

If they wanted to cut the deficit (which they don't want to do right now, because the economy needs fiscal stimulus more than it needs mindless austerity), the right place to do it is in the budget process - that way they don't spend the money in the first place. Refusing to raise the debt ceiling means they've already spent the money, they just don't want to pay for the things they've bought.

The problem is, I reckon tearing up the debt ceiling would be a political non-starter; the lunatics on the right of the Republican party love having the debt ceiling around as a way to create mayhem, and without them it'd be very hard to get enough votes for a tearup bill.

Quick summary table on the tax savings you can get from the maximum SRS contribution of 12,750/year.

Income level....Savings...% Savings
<30000...........255........0.85
<40000...........446........1.11
<80000...........892........1.11
<120000.........1466......1.22
<160000.........1912......1.19
<200000.........2167......1.08
<320000.........2295......0.71
>320000.........2550......---

I suppose if you look at it over 40 years (25 to 65), you could possibly accumulate 40-60k of tax savings on average. Still, it would be better to start later in your career cos the money deposited is locked in until 65 like CPF. Early withdrawal will incur a penalty. Younger people have more big ticket items to pay for like housing.

Mate, this is absolutely great research. In that case I guess the SRS isn't that crash-hot, because you're effectively swapping income tax now for "capital gains" tax later - the money taken out of SRS gets taxed, whereas if you invested in a regular brokerage account you wouldn't pay capital gains tax or dividends tax.

I might need to do some research on what's better - investing in SRS or investing taxable.

 

[flikmy]

Quick summary table on the tax savings you can get from the maximum SRS contribution of 12,750/year.

Income level....Savings...% Savings
<30000...........255........0.85
<40000...........446........1.11
<80000...........892........1.11
<120000.........1466......1.22
<160000.........1912......1.19
<200000.........2167......1.08
<320000.........2295......0.71
>320000.........2550......---

Tried calculating the savings based on amount of tax to be paid instead of based on total income.
Income tax is before any rebates, etc

Income Level….Tax….Savings….%Savings
<30,000…......200…....200…......100%
<40,000…......550…....405….......74%
<80,000…....3,350…...892.5….....27%
<120,000…..7,950...1,466.25.…..18%
<160,000….13,950….1,912.5…....14%
<200,000….20,750….2,167.5…....10%
<320,000….42,350….2,295…........5%
>332,750….44,900….2,550…........6%

Obviously, the highest % savings is when you're paying lower taxes. However, from the perspective of savings from the amount put into the SRS account, this is based on your income tax bracket and the higher your tax bracket the more you save in absolute terms, i.e. 20% of 12,750 is 2550.

 

[Asphodeli]

isn't the SRS a vehicle to bump your taxable income level down the next bracket?

 

[doody_]

Tried calculating the savings based on amount of tax to be paid instead of based on total income.
Income tax is before any rebates, etc

Income Level….Tax….Savings….%Savings
<30,000…......200…....200…......100%
<40,000…......550…....405….......74%
<80,000…....3,350…...892.5….....27%
<120,000…..7,950...1,466.25.…..18%
<160,000….13,950….1,912.5…....14%
<200,000….20,750….2,167.5…....10%
<320,000….42,350….2,295…........5%
>332,750….44,900….2,550…........6%

Obviously, the highest % savings is when you're paying lower taxes. However, from the perspective of savings from the amount put into the SRS account, this is based on your income tax bracket and the higher your tax bracket the more you save in absolute terms, i.e. 20% of 12,750 is 2550.

Yup, that's another way of looking at it. My point is that the savings are mostly insignificant when compared with your income level. It also results in deferred tax to be paid upon withdrawal, but I didn't look into that.

 

[The Accountant]

isn't the SRS a vehicle to bump your taxable income level down the next bracket?

Yes. You're right.

 

[lala81]

I see it as forced saving for my retirement. Plus the added benefit on top of tax deduction is that from this year onwards, people who reach their retirement age and qualify to start withdrawing from SRS, need not withdraw in cash.

If they invested their SRS money in shares, they can request for the operator to transfer the shares to their CDP account if they don't need the money so that they can continue to grow the money in their CDP account.

wow didn't know that. Thanks. I started contributing since 2014.

 

[small-onion]

really random and not linked to anything. but shiny, when your book comes out i hope you not only talk about stock/bonds but also how singaporeans can use their cpf to their best advantage. i feel the info is too scattered to make any informed decision =\

anw thank you for all your hard work !

 

[highsulphur]

really random and not linked to anything. but shiny, when your book comes out i hope you not only talk about stock/bonds but also how singaporeans can use their cpf to their best advantage. i feel the info is too scattered to make any informed decision =\

anw thank you for all your hard work !

As much credit I give to ST, I think understanding how cpf works and how to get the scheme to work to each advantage is each individual's responsibility. Go read the website and if you have any query just call cpf. The customer service officer has never let me down.

 

[highsulphur]

wow didn't know that. Thanks. I started contributing since 2014.

I suspect moving out your shares from srs constitutes a withdrawal and are subject to conditions and possible penalties.

 

[doody_]

I suspect moving out your shares from srs constitutes a withdrawal and are subject to conditions and possible penalties.

No need to suspect, the government will not leave a loophole open.

http://www.ifaq.gov.sg/MOF/apps/fcd...gpb1gSuoYW7sXMUpUL+nQEIhnhS1hlVsGBU=#FAQ_1605

Can I make SRS withdrawals in the form of investments (i.e. transfer investments out of SRS account), and if so, how can I make such a withdrawal?

Prior to Jul 2015, all SRS withdrawals must be made in cash.

From Jul 2015, SRS members will be able to apply to their SRS operators1 to withdraw an SRS investment by transferring the investment out of their SRS accounts (e.g. into their personal Central Depository (CDP) account), without having to liquidate their SRS investments. This is only applicable for the following types of withdrawals, which qualify for the 50% tax concession:

a. withdrawal on or after the statutory retirement age prevailing at the time of an SRS member’s first contribution (prescribed retirement age);
b. withdrawal on medical grounds;
c. withdrawal in full by a foreigner who has maintained his SRS account for at least 10 years from the date of his first contribution; and
d. actual withdrawal made by an SRS member or his legal personal representative (if he is deceased) from his SRS account, after the SRS investment that is to be withdrawn had earlier been deemed withdrawn upon death or after the expiry of the 10-year withdrawal period2.

All other withdrawals from an SRS account, including premature withdrawals, must be made in cash. Except for the four types of withdrawals highlighted above, where savings in the SRS account have been used to acquire investments, the investments must be liquidated before the sales proceeds are withdrawn in cash from the SRS account.

For a withdrawal of type a, b or c above, an SRS investment that is withdrawn will be valued by the SRS operator or the financial product provider (where applicable) and its value will be brought to tax. This is similar to the treatment for cash withdrawn from an SRS account. For a withdrawal of type d above, the earlier deemed withdrawal would have already been subject to tax. The date of withdrawal of an SRS investment is the date on which your SRS operator approves the withdrawal. Table A provides details on the date of approval by your SRS operator. Table B provides the dates that would be used for the purpose of valuation.

TLDR: The value of the shares removed from the account will be taxed as though it's a cash withdrawal.

 

[Shiny Things]

really random and not linked to anything. but shiny, when your book comes out i hope you not only talk about stock/bonds but also how singaporeans can use their cpf to their best advantage. i feel the info is too scattered to make any informed decision =\

anw thank you for all your hard work !

De nada! And yeah, I'm going to put some information in about CPF, but I want to be a bit careful with that, just because I don't know as much about the rules and regulations specifically around CPF investment, and I wouldn't want to lead anyone astray.

 

[highsulphur]

De nada! And yeah, I'm going to put some information in about CPF, but I want to be a bit careful with that, just because I don't know as much about the rules and regulations specifically around CPF investment, and I wouldn't want to lead anyone astray.

Not to mention the frequent shifting of goal posts by CPF!

 

[highsulphur]

I know I shouldn't but couldn't resist and sold some of the holdings I bought to take profits

 

[djchris]

No need to suspect, the government will not leave a loophole open.

http://www.ifaq.gov.sg/MOF/apps/fcd...gpb1gSuoYW7sXMUpUL+nQEIhnhS1hlVsGBU=#FAQ_1605



TLDR: The value of the shares removed from the account will be taxed as though it's a cash withdrawal.

Correct. The pro is that you don't have to liquidate your shares to withdraw the money. Just that you will be subjected to the same withdrawal conditions so don't transfer more than 40k (for retirees who are not working).

 

[Bedokian]

De nada! And yeah, I'm going to put some information in about CPF, but I want to be a bit careful with that, just because I don't know as much about the rules and regulations specifically around CPF investment, and I wouldn't want to lead anyone astray.

Not to mention the frequent shifting of goal posts by CPF!

Yes, CPF rules are changing constantly, so the info may become outdated very fast.

 

[zijie1990]

Hey guys

i have finally gotten my Stan chart trading account activated!

Just a quick question. what price do i put in the order price field?
Is it ok to just put the prevailing price that i see at the real time quote?

Oh and i have decided on the advice of the folks here to go with 90% equities and 10% bonds. cheers!

 

[hin999]

Hi guys

I note that ETFs can be de-listed or ceased to be offered. What if those ETFs (ES3,IWDA or A35) that we purchase for our retirement got delisted halfway, eg 10 years later?

What would be the contingency plan then? Or is this not a cause for concern as the likelihood is too low?

Lets discuss!!