Replacing SSB with SRS

[bubbasour]

hi

I was reading about about SRS, and need some advice, last time maybe 4 year ago I invest in SSB with normal salary.

Now I read here that I can use SRS funds to invest in SSB?

- Does this mean that I can benefit from selling off all my SSB now, and ask my employer to set aside maximum SRS amount from my monthly wage for some time and use the SRS to re-invest in the SSB?

would appreciate any guidance here and if this something that is recommended or are there any pitfalls i should watch for? thx!

 

[reddevil0728]

hi

I was reading about about SRS, and need some advice, last time maybe 4 year ago I invest in SSB with normal salary.

Now I read here that I can use SRS funds to invest in SSB?

- Does this mean that I can benefit from selling off all my SSB now, and ask my employer to set aside maximum SRS amount from my monthly wage for some time and use the SRS to re-invest in the SSB?

would appreciate any guidance here and if this something that is recommended or are there any pitfalls i should watch for? thx!

ask your employer to set aside max SRS amount??? SRS is you top up yourself 1 leh and got a cap.

SSB interest rate now so low, do you really want to go redeem your old SSB which I believe the interest rates are so much better just to use SRS to re-invest in low interest rate SSB? totally doesn't make any sense

 

[Slowdown]

I agree too. TS should put 'new money' into SRS to enjoy the tax saving if TS can afford to. An easy way to think is that TS wants to buy SSB now and instead of directly buying SSB, TS put that money into SRS and then use that money to buy SSB.

TS needs to know that once the money goes into SRS, there is a hefty penalty to withdraw it out. It is possible to withdraw but the penalty is not cheap. Reason is because the SRS money enjoyed tax deduction. The rule is made so that foreigner (who participated in SRS) can withdraw the money when they leave but yet prevent people to use it as a tax deduction tool (take in take out).

ask your employer to set aside max SRS amount??? SRS is you top up yourself 1 leh and got a cap.

SSB interest rate now so low, do you really want to go redeem your old SSB which I believe the interest rates are so much better just to use SRS to re-invest in low interest rate SSB? totally doesn't make any sense

 

[reddevil0728]

I agree too. TS should put 'new money' into SRS to enjoy the tax saving if TS can afford to. An easy way to think is that TS wants to buy SSB now and instead of directly buying SSB, TS put that money into SRS and then use that money to buy SSB.

TS needs to know that once the money goes into SRS, there is a hefty penalty to withdraw it out. It is possible to withdraw but the penalty is not cheap. Reason is because the SRS money enjoyed tax deduction. The rule is made so that foreigner (who participated in SRS) can withdraw the money when they leave but yet prevent people to use it as a tax deduction tool (take in take out).

TS should exhaust the 7k from SA top-up first before considering SRS

 

[iceblendedchoc]

TS should exhaust the 7k from SA top-up first before considering SRS

he may not have CPF contribution the way he put across. Which allows him to put in $35700 a year.

 

[reddevil0728]

he may not have CPF contribution the way he put across. Which allows him to put in $35700 a year.

Hmmm true that

 

[OneMantou]

hi

I was reading about about SRS, and need some advice, last time maybe 4 year ago I invest in SSB with normal salary.

Now I read here that I can use SRS funds to invest in SSB?

- Does this mean that I can benefit from selling off all my SSB now, and ask my employer to set aside maximum SRS amount from my monthly wage for some time and use the SRS to re-invest in the SSB?

would appreciate any guidance here and if this something that is recommended or are there any pitfalls i should watch for? thx!

Why need to sell off existing SSB when ur SRS money is going to come from ur future money (monthly wage)? Ur existing SSB (money from the past) earns more interest sitting in SSB applied for when interest rate was higher.

SRS sits in a separate account that functions like savings account generating bank interest (very low). What to do with this savings account? Put into SSB now (slightly higher than bank interest but lower than ur existing SSB), or put in insurance saving plan as lump sum (min 10K)

SRS is one of the ways to reduce tax and makes sense if ur tax bracket is 5% or more. For the amount u put in SRS, this number no need to pay tax. As others mentioned,it should come from new money.

Why 5%? this is the panelty rate for early withdrawal.

 

[bubbasour]

thx alot everyone for your advice. now I understand, that taking the "old" SSB with a higher interest rates out does not make any sense.

I also tried to figure out if SRS can be used for investing in S&P500 ETFs or is it only for STI stock? appreciate any pointer here .

 

[reddevil0728]

thx alot everyone for your advice. now I understand, that taking the "old" SSB with a higher interest rates out does not make any sense.

I also tried to figure out if SRS can be used for investing in S&P500 ETFs or is it only for STI stock? appreciate any pointer here .

Seems like it. But u can use it to buy unit trust.