SRS Portfolio

[zoneguard]

Hi All

Have a SRS query:

Im 56 this year have about $146K in SRS. I plan to work until 65 years old; and during this period I don't intend to withdraw from SRS as it will not benefit me tax wise. Post 65, I will earn about at least 30K income annually.

Given my scenario, should I continuation to make SRS contribution now?

If I withdraw my entire SRS monies (at one go) at 73 years old, will it be taxed or will t be tax free?

Thank you.

SRS is tax deferral not tax avoidance so you'll need to pay tax on the withdrawal at any point of time. And you are indirectly paying tax for the capital gains. So it is a question of lowering taxes due legally by timing the withdrawal.

Stagger the withdrawal from 62 onward for a period of 10 years and do it at an age when you no longer have income from other sources as 50% of each withdrawal will be taxed.
Under current tax bracket, 1st 20K of income is not taxable. So 40Kx50% = 20K

If you want to defer the withdrawal period beyond 10 years, buy a SRS approved annuity with it but even the annuity payout will still be taxed at 50%.

 

[reddevil0728]

Hi All

Have a SRS query:

Im 56 this year have about $146K in SRS. I plan to work until 65 years old; and during this period I don't intend to withdraw from SRS as it will not benefit me tax wise. Post 65, I will earn about at least 30K income annually.

Given my scenario, should I continuation to make SRS contribution now?

If I withdraw my entire SRS monies (at one go) at 73 years old, will it be taxed or will t be tax free?

Thank you.

what did you do with your 146k in SRS?

 

[dgeralds]

SRS is tax deferral not tax avoidance so you'll need to pay tax on the withdrawal at any point of time. And you are indirectly paying tax for the capital gains. So it is a question of lowering taxes due legally by timing the withdrawal.

Stagger the withdrawal from 62 onward for a period of 10 years and do it at an age when you no longer have income from other sources as 50% of each withdrawal will be taxed.
Under current tax bracket, 1st 20K of income is not taxable. So 40Kx50% = 20K

If you want to defer the withdrawal period beyond 10 years, buy a SRS approved annuity with it but even the annuity payout will still be taxed at 50%.

Thank you. Im not sure now if I should continue to do SRS. Will have to compute and see if it will be beneficial for me if continue with SRS.

 

[dgeralds]

what did you do with your 146k in SRS?

its around 130K since i haven't do SRS for 2022.

A couple of months / weeks ago I took out profit largely from OCBC and STI ETF. So about 93K cash is sitting in SRS account. 10K in endowus - not doing well. 21K in local stocks - not doing well. 6K in S27.

Wondering where to invest the 93K. May be will slowly invest in S27.

 

[reddevil0728]

Thank you. Im not sure now if I should continue to do SRS. Will have to compute and see if it will be beneficial for me if continue with SRS.

don't "save tax for the sake of saving" if you put in SRS and not do anything with it

 

[TaZ_MaN]

Need some advise from experts here.

I'm reading SRS booklet from MOF.

Let's assume a person have $500k in SRS and he stops working at 62 (i.e. no other taxable income). We know he can withdraw $400k without paying any tax. If he use the rest (i.e. $100k) to buy annuity, and the payout starts after he closed the account. Does it mean that he does not need to pay any tax (assume annuity payout is less than $40k per year)? Thanks in advance.

https://www.mof.gov.sg/docs/default...dab847f78b5cfb6919b476b2.pdf?sfvrsn=1eb3f7c_2
67. If I buy an annuity using my SRS funds, will the monthly annuity payouts be paid
into my SRS account or can they be paid into my bank account directly? Will I be
taxed only on 50% of the total annuity payouts for each year of the 10-year
withdrawal period? If I live longer than that, will my monthly annuity payouts be no
longer taxable under the SRS scheme?
If your SRS account is still open (i.e. your SRS account is not closed or deemed closed at
the end of the 10-year withdrawal period), your monthly annuity payouts must be returned
to the SRS account before you withdraw them. If your SRS account is closed or deemed
closed, your monthly annuity payouts may be directly paid into your bank account. After
reaching the statutory retirement age prevailing at the point of first SRS contribution, an
SRS member is taxed on only 50% of the total annuity payouts each year, for as long as
the annuity payouts are received

 

[TaZ_MaN]

Hmm..... even if buying annuity can avoid tax, it may not be the best way because the annuity policy cannot be surrendered.

62. Can I surrender my annuity policy after my SRS account is deemed closed i.e. 10
years from the date of the first withdrawal made having attained the statutory
retirement age that was prevailing when I made my first SRS contribution?
An SRS member is not allowed to surrender the policy after the SRS account has been
closed or deemed closed.

 

[zoneguard]

If he use the rest (i.e. $100k) to buy annuity, and the payout starts after he closed the account. Does it mean that he does not need to pay any tax (assume annuity payout is less than $40k per year)?

SRS annuity extends the withdrawal window beyond 10 years. Annuity payout is still taxed at 50% so if annual payout is less than 40K and the current tax bracket of the 1st 20K being zero tax remains when the person is due to collect this annuity payout, yes, this payout then doesn't attract any tax if the person doesn't have any other non-SRS taxable income.

 

[iceblendedchoc]

Hi All

Have a SRS query:

Im 56 this year have about $146K in SRS. I plan to work until 65 years old; and during this period I don't intend to withdraw from SRS as it will not benefit me tax wise. Post 65, I will earn about at least 30K income annually.

Given my scenario, should I continuation to make SRS contribution now?

If I withdraw my entire SRS monies (at one go) at 73 years old, will it be taxed or will t be tax free?

Thank you.

When we make srs contribution, it is to reduce tax primarily.

if you withdraw completely, you will be tax for the full amount minus 40k or whatever is the amount iras deemed as 20k currently.

the first 40k is tax free for 10 years once you start your withdrawal after the “retirement” age which you manage to lock-in which should be 62.

 

[elvintay07]

I am just thinking. If now your $150k is in all stocks and unit trust (assuming) and the amount grows to $200k when you are age 62. Wonder whether banks like DBS and ocbc can allow you to keep those shares and unit trust (by transferring from SRS to non SRS account)? This way u didn’t sell anything but can still song song take dividends. Of course have the flexibility to sell also. Any thoughts?

 

[badsector]

I am just thinking. If now your $150k is in all stocks and unit trust (assuming) and the amount grows to $200k when you are age 62. Wonder whether banks like DBS and ocbc can allow you to keep those shares and unit trust (by transferring from SRS to non SRS account)? This way u didn’t sell anything but can still song song take dividends. Of course have the flexibility to sell also. Any thoughts?

u do not need to sell them for withdrawal
read the FAQ

 

[zoneguard]

Wonder whether banks like DBS and ocbc can allow you to keep those shares and unit trust (by transferring from SRS to non SRS account)? This way u didn’t sell anything but can still song song take dividends. Of course have the flexibility to sell also. Any thoughts?

Any transfer to non-SRS account is still a SRS withdrawal and all the usual rules on SRS withdrawal like 10 years window and statutory retirement age (62?) apply and IRAS will tax 50% of it under the prevailing tax bracket.

 

[elvintay07]

Any transfer to non-SRS account is still a SRS withdrawal and all the usual rules on SRS withdrawal like 10 years window and statutory retirement age (62?) apply and IRAS will tax 50% of it under the prevailing tax bracket.

Aiya! Hong gan liao

 

[maumu]

not sure how the annuity with SRS works.. the tax thing so luan.

if 50% of annuity payout is still taxable, does it make sense to still grow the SRS account beyond $400k (or $40k for 10 years) if we don't want to pay the tax?

assuming no more income after 62:
age 63 - 72: draw out $40k every year until empty
age 73 onwards: draw from annuity payout no more than $40k every year?

 

[shortbirdlonghair]

Can endowus SRS portfolio be wthdrawn to cash portfolio just like that

Or have to sell

 

[celtosaxon]

Can endowus SRS portfolio be wthdrawn to cash portfolio just like that

Or have to sell

From the FAQs it mentions you can make SRS withdrawal in the form of securities if it can be transferred from SRS into your CDP. Therefore, it has to be something that is eligible for CDP custodianship. I doubt that most investments from endowus are CDP-able.

 

[CaptainWu]

CDP is just an example quoted and I think Endowus or other MAS approved brokers might be able to do the same, which is to transfer out from your SRS to the Cash account instead. It will be good to clarify further but not sure who to go to.

 

[gold_eagle36]

not sure how the annuity with SRS works.. the tax thing so luan.

if 50% of annuity payout is still taxable, does it make sense to still grow the SRS account beyond $400k (or $40k for 10 years) if we don't want to pay the tax?

assuming no more income after 62:
age 63 - 72: draw out $40k every year until empty
age 73 onwards: draw from annuity payout no more than $40k every year?

Actually no need to narrow mindset to not pay tax at all.
Withdrawal of 80k per year ( taxed 40k income) is still very reasonable

Putting it into perspective 550 tax over 80k it's like losing 0.69% yield from your 80k savings. U withdraw out put in some fixed deposit alr earn back the "amt lost"

If you want to enjoy the 1st 10 years after 62 that is the way.

Life expectancy not equal to healthy life expectancy.

 

[ottaro]

Buying S27 using poems only can be done using cashplus? cannot using cash management?

SGD

 

[adven7]

Buying S27 using poems only can be done using cashplus? cannot using cash management?

Can be done but more expensive