SRS withdrawal age

[tangent314]

That's quite facepalm :/

 

[tkdboi]

I keep things simple. I set up my srs account with OCBC and used their Blue Chips Investment Plan to invest in STI ETF. All done in their online banking platform.

same here!

Sent from LGE LG-H930 using GAGT

 

[iMac]

Refer the link provided in post #12. Over the years, 1 in 3 leaving the fund idle in SRS. After claiming tax relief and don't know what to do

I am one of the 3.

Many years back, I blindly follow ppl play stocks and got burned quite bad.

Now very conservative, put most of my money in FD only...

SRS is for my retirement, don't want to it screw up.

For STI-ETF, is it safe?

 

[JuniorLion]

I am one of the 3.

Many years back, I blindly follow ppl play stocks and got burned quite bad.

Now very conservative, put most of my money in FD only...

SRS is for my retirement, don't want to it screw up.

For STI-ETF, is it safe?

Define safe?

 

[BBCWatcher]

SRS is for my retirement, don't want to it screw up.

Well, you could buy Singapore Government Securities (bonds) using SRS funds. The 15 year bond is coming to auction this month (September, 2018), and that’s a reasonable choice if you’re under age 50. You’ll have to fill out a paper form, and you won’t be able to place every dollar precisely as you might want (due to the $1,000 face value increments and 115% non-competitive bid requirement on a reopened bond), but you can still do pretty well.

There’s nothing safer in Singapore dollars than direct holding of the government’s bonds.

 

[henrylbh]

I am one of the 3.

Many years back, I blindly follow ppl play stocks and got burned quite bad.

Now very conservative, put most of my money in FD only...

SRS is for my retirement, don't want to it screw up.

For STI-ETF, is it safe?

No you are not one of the three.

Cash represents 33% of total SRS investments.

FD only 1%

Better you stop going for the tax relief if can dump into CPF annually.

 

[foozgarden]

62 withdrawl age.
69 this year.
80k in SRS.
other source of income ~25k pa.

whats the strategy to aviod penalty?

 

[JuniorLion]

62 withdrawl age.
69 this year.
80k in SRS.
other source of income ~25k pa.

whats the strategy to aviod penalty?

Wait till your source of income is 0k pa, then withdraw 40k per year until it's all out.

 

[BBCWatcher]

62 withdrawl age.
69 this year.
80k in SRS.
other source of income ~25k pa.
whats the strategy to aviod penalty?

Wait till your source of income is 0k pa, then withdraw 40k per year until it's all out.

Foozgarden could withdraw ~$10K/year which would be subject to a mere 1% income tax rate since (s)he's currently in the 2% tax bracket. (50% of the $10K, or $5K, is added to Foozgarden's taxable income, which is taxed at 2%. So this is 1% tax on the total $10K.) Assuming Foozgarden's other taxable income is expected to be relatively stable or declining, at this pace (~$10K/year), and without skipping any years, the SRS would be drawn down in ~9 years, which is within the 10 year withdrawal limit.

It is sometimes possible to offset this tiny income tax using tax relief. As a notable example, Foozgarden should be eligible to replenish Medisave Account funds when they fall below Foozgarden's Basic Healthcare Sum (which was fixed a few years ago), with tax relief. That tax relief could drive the income tax back down toward zero.

 

[crimsontactics]

Directly holding SG Gov bonds is not the safest but actually the most risky thing to do over the long term because your return is below inflation rate and your money is just depreciating in purchasing power every year!

It's totally impossible to define an investment as being the "most risky".

What you said is correct, holding SG bond is a sure way to lose money. You are estimated to lose around 40% of your purchasing power after around 20 years. But you could also lose 40% of your money in less than a year by investing in stocks like Starhub, which is a blue chip.

 

[crimsontactics]

If you are a genuine and experienced investor, you would never put all your money into 1 stock.
Even if 1 stock I am holding drop to $0, it still doesn't worry me a tiny bit.
Because I have many other stocks where some have appreciated >300%, some >200%, some >100%, and these are more than enough to cover total loss of a few stocks (assuming that this happen).

What you said is again correct. But it still doesn't change the fact that it's impossible to judge if an investment class is the "most risky".

What you're addressing is simply to statically reduce the risk of investing in stocks.

But that doesn't mean that it won't lose more money than investing in SG bond.

It's impossible to judge something to be the "most risky" without perfect information.

 

[foozgarden]

Wait till your source of income is 0k pa, then withdraw 40k per year until it's all out.

not possible. coz its passive.

Foozgarden could withdraw ~$10K/year which would be subject to a mere 1% income tax rate since (s)he's currently in the 2% tax bracket. (50% of the $10K, or $5K, is added to Foozgarden's taxable income, which is taxed at 2%. So this is 1% tax on the total $10K.) Assuming Foozgarden's other taxable income is expected to be relatively stable or declining, at this pace (~$10K/year), and without skipping any years, the SRS would be drawn down in ~9 years, which is within the 10 year withdrawal limit.

It is sometimes possible to offset this tiny income tax using tax relief. As a notable example, Foozgarden should be eligible to replenish Medisave Account funds when they fall below Foozgarden's Basic Healthcare Sum (which was fixed a few years ago), with tax relief. That tax relief could drive the income tax back down toward zero.

i think the drawdown timeline is left only 2 yrs?
since 62 is the start. +10 means 72.
and if the age is 69 now. means, the 80k in the SRS needs to be emptied in 2+ years.

unless its bought with an annuity?

 

[BBCWatcher]

i think the drawdown timeline is left only 2 yrs?
since 62 is the start. +10 means 72.
and if the age is 69 now. means, the 80k in the SRS needs to be emptied in 2+ years.

OK, you didn’t mention that part. Did you start your withdrawals at age 62? If so....

unless its bought with an annuity?

....Yes, that’s definitely an available option. You can visit NTUC Income and Manulife and get quotations on single premium life annuities using your remaining SRS funds. That’ll allow you to stretch the payouts over the rest of your life, and thus you’ll save some income tax that way. Each annuity payment will still be subject to ordinary income tax on 50% of the amount, but that’ll tend to keep you in a lower (or possibly zero) tax bracket.

 

[foozgarden]

OK, you didn’t mention that part. Did you start your withdrawals at age 62? If so....


....Yes, that’s definitely an available option. You can visit NTUC Income and Manulife and get quotations on single premium life annuities using your remaining SRS funds. That’ll allow you to stretch the payouts over the rest of your life, and thus you’ll save some income tax that way. Each annuity payment will still be subject to ordinary income tax on 50% of the amount, but that’ll tend to keep you in a lower (or possibly zero) tax bracket.

no, havent drawdown any yet. thats the problem..
i think withdrawing in cash will definitely get taxed.

so yes, shopping for annuity nw.
but also, entry age will be abit too late.
which means payment have to start almost at the next birthday (70)
so either the premium will be higher, or the payout will be lower.

are ML and ntuc the better ones out there? for srs annuity?
how about aviva and TM?

 

[foozgarden]

on a separate note;
if the amount in the SRS is bought into UT.
what happens @ 72, if you leave it there?

 

[JuniorLion]

no, havent drawdown any yet. thats the problem..
i think withdrawing in cash will definitely get taxed.

so yes, shopping for annuity nw.
but also, entry age will be abit too late.
which means payment have to start almost at the next birthday (70)
so either the premium will be higher, or the payout will be lower.

are ML and ntuc the better ones out there? for srs annuity?
how about aviva and TM?

If you haven't start your drawdown yet, then you still have 10 years from the time you start your first withdrawal. E.g. if you start your first withdrawal at age 71, you can drawdown till 80.

 

[BBCWatcher]

So what’s your forecast for future taxable income, Foozgarden? At the moment (at about $25K/year of taxable income) you can withdraw about $10K/year from your SRS and pay 1% tax on the withdrawal, and (probably) empty your SRS within the allowed 10 year window. That’s not too bad, really. But whether you can do better (or worse) depends on your future taxable income, so do you have a forecast?

 

[foozgarden]

If you haven't start your drawdown yet, then you still have 10 years from the time you start your first withdrawal. E.g. if you start your first withdrawal at age 71, you can drawdown till 80.

yes, i think you might be right..
reading theu the FAQ on MOF.

if i interpret correctly, the 62 as printed on the statement, doesnt mean the +10 starts from there..
but the 10 year countdown only starts on the FIRST withdrawal.
ie if start first withdrawal @ 80 means @90 to empty it

but surely there must be a max age limit?
what if you kick the bucket before you manage to empty it?

Can I spread my withdrawals over a period of time so as to enjoy the 50% tax concession?
Yes, if you withdraw your SRS savings at or after the statutory retirement age that was prevailing when you made your first SRS contribution or on medical grounds. The maximum period over which you can spread your withdrawals is 10 years. The 10-year period will start from the date of your first such withdrawal. The 10-year period does not apply to investments in life annuities. So long as you continue to receive your annuity streams in perpetuity, the 50% tax concession will apply.

While you may make partial withdrawals in the form of investment for eligible withdrawals, an SRS operator would not be able to approve your application to withdraw, if the investment to be deducted cannot be separately valued or identified (e.g. where the SRS investment that the SRS member wishes to withdraw from his SRS account is an inseparable part of an insurance policy).

 

[compro_1975]

What is the best stretegy to pump money into SRS and Ensure not get taxed in future? For a 30year old every year inject 5k?

 

[JuniorLion]

What is the best stretegy to pump money into SRS and Ensure not get taxed in future? For a 30year old every year inject 5k?

Best way is to pump 15300 per year and then use it to buy annuity