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Where to put $8K spare money

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Old 14-06-2018, 12:57 PM   #1
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Where to put $8K spare money

Hi folks,

Suppose your tax bracket is in the range of 8% with 200K HDB loan for next 20 years and you are the only bread earner of a 3-ppl family, what will you do with a spare money of $8k to maximize its strength.

1) To top up CPF-SA account to get tax rebate and a YoY 4% risk free return.
2) To pay back the HDB house loan to cut the monthly repayment by 8/220 =3.6% for next 20 years.
3) To top up SRS account to get tax rebate 8% and invest it into STI ETF until 65 years old.

Which one will you choose or choose a combination? Don't laugh it is so little money.

Thank you!

Best Regards
David
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Old 14-06-2018, 12:59 PM   #2
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You mean 7% tax bracket?
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Old 14-06-2018, 01:31 PM   #3
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Suppose your tax bracket is in the range of 8% with 200K HDB loan for next 20 years and you are the only bread earner of a 3-ppl family, what will you do with a spare money of $8k to maximize its strength.

1) To top up CPF-SA account to get tax rebate and a YoY 4% risk free return.
2) To pay back the HDB house loan to cut the monthly repayment by 8/220 =3.6% for next 20 years.
3) To top up SRS account to get tax rebate 8% and invest it into STI ETF until 65 years old.

CPF-SA also gets tax reliefs of up to $7k, so I would put $7k into CPF-SA and $1k into SRS.



CPF-SA is 4% whereas your loan is 2.6%, so it makes more sense to top up CPF-SA instead of using it to pay off your loan.
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Old 14-06-2018, 01:48 PM   #4
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CPF-SA also gets tax reliefs of up to $7k, so I would put $7k into CPF-SA and $1k into SRS.
CPF Medisave would most likely be better than SRS for the $1K. An individual in the 7% tax bracket is almost certainly not hitting the CPF Annual Limit and should have room for a Medisave top up.
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Old 14-06-2018, 01:55 PM   #5
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Ai yo! Me also stucked in 7% tax bracket for long period.
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Old 14-06-2018, 04:01 PM   #6
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Since it not much. Put it with Singapore pool. U never know.
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Old 14-06-2018, 04:19 PM   #7
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