SRS = 7% "returns" annually

[item2sell]

U fail your comprehension and interpreting skills badly

I am not savvy, so am happy just with 4% pa almost guaranteed returns, not greedy with my retirement funds.

If u are savvy, u should not be making noise here cos u are not in it!

To each his own!

I don’t understand what is almost guaranteed returns.

There is only non guaranteed and guaranteed.

 

[maple96]

I don’t understand what is almost guaranteed returns.

There is only non guaranteed and guaranteed.

Nowadays there is 100% guaranteed endowment plan. I bought one with SRS 2.7% pa guaranteed.

Almost guaranteed means what the plan project upon maturity is what u will likely to get based on past policy experience. Eg. I bought this endowment plan, it matured and paid out as projected 4% pa. I put my money back into the same endowment plan as the projected is still that good 4% pa +, the longer the better. And many uncles and aunties also bought alot more as shared by the agent. My cash portion recently matured, 4.3%+ more than expected. So I expect my SRS portion to return almost guaranteed 4%pa +, even more than my cash portion cos the term is longer

Too bad, insurer stopped it cos it is too good to believe.

 

[JetStorm]

What are you doing with the money in SRS? Keep in bank to earn 0.05% interest?

Of coz not. Will use to invest as another "cash" portfolio.

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[JetStorm]

SRS has very poor options to invest your money in.

You may save on taxes but you may waste on other better investment opportunities.

If doing 3 fund portfolio i tot its quite ok? Ocbc bcip allows srs funds to be used mah. Just the global portion use cash nia.

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[limster]

SRS you can buy unit trusts. If you use poems no platform fee.

While some investors can beat unit trust returns, some cannot.

I've been monitoring my unit trust performance since 2017 to benchmark against my own stock picking...

https://forums.hardwarezone.com.sg/...-trust-performance-review-2019-a-6167793.html.

 

[htngwilliam]

Assuming if you were to purchase SG stocks, it is worth to park part of the $$ in SRS. For example if every month you save $3000 and park $1275 into SRS. You will have $15300 to invest in stocks via BCIP or poems.

The other $1725 can go into US equities. In this case, you get a win win. Tax deduction vs no tax deduction. If you don’t need the $$$, can continue to keep the stock and earn dividend. Else can sell and withdrawal after retirement age.

The biggest issue is government change the SRS policy so that one can withdraw later.

 

[BBCWatcher]

The biggest issue is government change the SRS policy so that one can withdraw later.

I don't think that's much of a consideration. The government is free to change any tax rules it wishes, including the tax treatment of non-SRS assets.

However, the Supplementary Retirement Scheme only provides potential/likely Singapore tax advantages. There might be a few other countries that honor Singapore's tax treatment of SRS funds, but most countries don't/won't. If you move to another country, all bets are really off.

I happen to be a U.S. citizen, thus subject to the U.S. tax system no matter where I live, and (by my calculations anyway) Singapore's Supplementary Retirement Scheme doesn't look like it'll work well for me. I might be able to eke out a bit of net tax savings when all is said and done, but the universe of SRS compatible and U.S. tax appropriate investments is a very, very small universe. That's something of a showstopper, so I'm skipping the SRS for now. At the very tail end of my working career I'll take another look since it might make sense then to "launder" some employment income across a very few years pre- and post-retirement, even with the U.S. tax overhang. We'll see.

 

[koolkool]

Quick question. If buying Sgx stocks denominated in USD using srs, is the W-8 form for non US resident applicable so that dividends will not be subjected to withholding tax of 30%? Who should I submit the form to?

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[BBCWatcher]

If buying Sgx stocks denominated in USD using srs, is the W-8 form for non US resident applicable so that dividends will not be subjected to withholding tax of 30%?

If your broker is asking, fill out IRS Form W-8BEN truthfully and return it to your broker. IRS Form W-8BEN is a certification of tax status for non-U.S. persons. If you're a U.S. person (or become one), fill out IRS Form W-9.

Whether you and a particular security you own is subject to dividend tax withholding, and at what rate, are separate questions. However, the way you've phased that remark about the 30% dividend tax withholding rate on U.S. securities isn't usually correct for residents of Singapore.

Whether your broker or custodian is withholding tax properly or not, you personally have legal obligation(s) to pay all taxes owed and can be held personally liable (and penalized) for any underpayment.

 

[starbugs]

Assuming if you were to purchase SG stocks, it is worth to park part of the $$ in SRS. For example if every month you save $3000 and park $1275 into SRS. You will have $15300 to invest in stocks via BCIP or poems.

The other $1725 can go into US equities. In this case, you get a win win. Tax deduction vs no tax deduction. If you don’t need the $$$, can continue to keep the stock and earn dividend. Else can sell and withdrawal after retirement age.

The biggest issue is government change the SRS policy so that one can withdraw later.

I agree with this the most among replies in this thread.

To add on, personally I think that SRS is worth it if you are in the 11.5% and above marginal tax bracket. 7% and below, probably not.

 

[w1rbelw1nd]

I agree with this the most among replies in this thread.

To add on, personally I think that SRS is worth it if you are in the 11.5% and above marginal tax bracket. 7% and below, probably not.

Someone from Endowus actually wrote any article on this.

https://endowus.com/insights/solvin...medium=solvingsrs27dec19&utm_campaign=content

You can take a look, seems that even at 7% tax bracket it makes sense for most people.

 

[The_Davis]

I would feel reach sa frs first b4 consider srs...

 

[BBCWatcher]

I would feel reach sa frs first b4 consider srs...

Or at least max out available CPF tax reliefs in each tax year before SRS deposits.

 

[w1rbelw1nd]

Or at least max out available CPF tax reliefs in each tax year before SRS deposits.

Not everyone subscribe to that train of thought.

SRS can give higher returns than CPF SA/MA, given the long investment horizon, and we don't have to impose on the goodwill of the government of giving us that 4% (its not guaranteed, its not risk free!) return.

I never topped up CPF SA with cash, and I only topped up SRS. Maybe if you are in your early 50s CPF SA will become by default a more attractive option. But nope. CPF SA/MA is NOT the default option.

 

[doody_]

When in doubt, do both. Will be starting SRS next year. Tax savings is free money and the investment returns is icing on the cake.