SRS or CPF SA contribution

[kohorok]

Dear gurus,

I have been trying to decide to go for SRS or SA.
Currently my SA has about 30+k and adding contribution on top of the already substantial amount would means higher interest.

However, i read some of the gurus said SRS is better option than SA.

I hope all of you could give me some thoughts which is a better choice. Riding the SA or build a new portfolio through SRS.

Best regards,
koh

 

[fr33d0m]

If your tax is very high, SRS does little to reduce your tax.

If your tax is not high, you are locking money for many years just for a little tax benefit.

 

[gnixer]

Above 100k - srs
Below 100k - SA

Is this better to decide?

 

[TabascoSauce]

Above 100k - srs
Below 100k - SA

Is this better to decide?

Above 100k in wat?
Assessable Income or SA balance?

And can elaborate y 100k?

 

[limster]

If your tax is very high, SRS does little to reduce your tax.

If your tax is not high, you are locking money for many years just for a little tax benefit.

With SRS cap at $15,300, higher income earners at the higher brackets who use SRS can get $3,000+ extra money to invest every year. I think that's a pretty good deal.

A $3,000 'discount' on your tax is less than 10% off your tax bill so you are not wrong it saying that its not a big reduction in your tax bill, but still a nice amount, especially as its a recurring item.

 

[winstonoyy]

SRS provides you with some liquidity, even if you can be potentially penalised for drawing it early. The penalty is cheaper than a unsecured loan. And, you can invest the SRS funds. Index dividends typically range from 3% to 5%. The only downside is the withdrawal limitation compared to CPF: you get taxed if you exceed the zero percent tier, but taxation is halved for the taxable amounts too.

SA wise, you lose the liquidity entirely.

 

[BBCWatcher]

There's already another thread discussing this same topic.

 

[kohorok]

Above 100k in wat?
Assessable Income or SA balance?

And can elaborate y 100k?

Yes, I would be interested to find out too, hows the calculation works.