Pay increment - What to do with it?

[djchris]

It's that time of the year when companies do appraisals. I received a tiny increment of $300 and being disciplined, I will pump it into my portfolio.

My income is still below the 80k tax bracket so I'm wondering if it makes sense to lock the money in SRS for tax deductions and then invest it from there, as opposed to investing direct with cash.

I feel that it makes sense to top up SRS if I intend to do the maximum contribution.

What do you guys think?

 

[naro]

do SRS topup only at the end of the year. Do not commit so early. You may need the liquid cash.

Anyway, rather than top-up SRS, might as well do voluntary CPF Top up.

 

[makeupconnect]

Used to think like you too.

Maybe you should thinker with the iras calculator.

Using your current income and adjust the srs amount, to see the impact of tax savings.

A quantifiable amount may help you to decide.

Plus you don't have to top up your srs in one lump shot.

 

[djchris]

Used to think like you too.

Maybe you should thinker with the iras calculator.

Using your current income and adjust the srs amount, to see the impact of tax savings.

A quantifiable amount may help you to decide.

Plus you don't have to top up your srs in one lump shot.

So last night I did a calculation on Excel since I have a rough gauge of my reliefs figures after filing my taxes.

If I do a full SRS contribution of $12,750, my taxable income will be just below 40k. If I just put my pay increment into SRS, the impact is not significant.

My other concern is that because SRS is locked till 62, it means that I will need to find other cashflow alternatives if I want to retire earlier than that.

 

[Starmaster]

Recommend if u wanna contribute SRS

do it at the end of the year when u receive your bonus

this way your monthly cash flow will not be affected and u know i did not anyhow spent your bonus on frivalous things

at the same time you are actually saving tax and working towards your future retirement

WIN-WIN-WIn situation

 

[yoosica]

I increment 2k....

I got myself a slk... u make me guilty

 

[djchris]

I increment 2k....

I got myself a slk... u make me guilty

Well, maybe you give me a ride to work every morning if that makes you feel less guilty.

Then I wouldn't have to cycle to work.

 

[yoosica]

Well, maybe you give me a ride to work every morning if that makes you feel less guilty.

Then I wouldn't have to cycle to work.

Only for pretty gals

 

[djchris]

such
a
shame

 

[Genesisz]

Recommend if u wanna contribute SRS

do it at the end of the year when u receive your bonus

this way your monthly cash flow will not be affected and u know i did not anyhow spent your bonus on frivalous things

at the same time you are actually saving tax and working towards your future retirement

WIN-WIN-WIn situation

Agreed. The SRS contribution is best done toward the end of the year, sometime after receiving bonus.

 

[wahkao3]

I increment 2k....

I got myself a slk... u make me guilty

jin satki!!!!!!!!!!!

 

[djchris]

This message is hidden because wahkao3 is on your ignore list.

 

[Dividends Warrior]

I increment 2k....

I got myself a slk... �� u make me guilty

No need to feel guilty. Different people have different lifestyles.

Warren Buffett is one of the wealthiest guy in the world, but he lives in a simple house and drives a second-hand car for many years.

 

[path_of_rainbow]

my increment only $150.
my boss left and i am reporting to someone with no power, only know how to give you work to do.

 

[Pandule]

I think SRS is good only if you DONT NEED the money. And want put in at least put in the maximum amount if not no use(IMO). but i believe for people from their late 20s to 50s is where they need the cash for kids, housing etc, so 12k is really a huge amount to be put inside an account which is to be considered locked.

 

[djchris]

I think SRS is good only if you DONT NEED the money. And want put in at least put in the maximum amount if not no use(IMO). but i believe for people from their late 20s to 50s is where they need the cash for kids, housing etc, so 12k is really a huge amount to be put inside an account which is to be considered locked.

All in the name of retirement.

 

[anfielder]

I think SRS is good only if you DONT NEED the money. And want put in at least put in the maximum amount if not no use(IMO). but i believe for people from their late 20s to 50s is where they need the cash for kids, housing etc, so 12k is really a huge amount to be put inside an account which is to be considered locked.

I don't see what's the issue with putting in amounts less than the max, since the tax savings is based on the amount put in. Just go with the amount you're comfortable with. I rather like the fact that the amount is locked up because it helps to enforce financial discipline.

 

[sAVaGEmP5]

some1 mentioned top up CPF. Not sure SRS or CPF better ?

CPF can generate guranteed returns and becos of that min sum thing i thot if i first accumulate $$ there first will be a safer bet ? SRS bo gurantee... Also CPF top can reduce tax ?

 

[mcylo]

Top up cpf seems to be the dumbest thing to do, at least for me.

Recommend ts to save up and invest in some reits. 钱生钱。

 

[djchris]

Well both works fine but I'm interested to top up my SRS for tax deduction and invest in stocks from there. For me, I see that SRS can start paying out from 62. If I retire earlier, it's good to start getting payouts earlier.

My CPF OA amount does not hit above 20k so it will just accumulate interest there.

At the current stage of my life, I won't put my money in REITs.

Full speed on wealth accumulation!