SRS withdrawal age

[foozgarden]

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?

work backwards lo.
assuming not buying annuity,
10 years drawdown max.
50% taxable. so 40k pa drawdown.
means 400k max in srs to aviod being taxed

 

[henrylbh]

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?

Ya iirc, you got 10 years to finish withdrawals from the year you first start. At end of 10 years any balance will be valued and half will be brought to tax. Why is there an age limit when half the whole amount will be taxable when one kick the bucket?

 

[BBCWatcher]

Why is there an age limit when half the whole amount will be taxable when one kick the bucket?

You can ask the government that question, but those are the rules.

I think I know the basic answer, though. Tax deferral has value (a cost to the public purse), and the government doesn't want to grant an unlimited tax deferral once withdrawals start. It's not in the public's interest to subsidize bequests, basically. Rules like this one are pretty common around the world. For example, the U.S. has Required Minimum Distributions (RMDs) on its Traditional 401(k)s and Traditional Individual Retirement Accounts (IRAs). Withdrawals must start no later than age 70 1/2. Roth accounts are different and don't have RMDs.

The single premium life annuity exception to the 10 year withdrawal rule is something the government explains. The government wants to encourage lifetime retirement financial security, for many good public policy reasons, so they grant that particular single exception.

 

[tangent314]

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?

For one thing, you will probably have to stop working at the age that you start your SRS withdrawals.


Note that $40k isn't a hard limit - it would depend on what other reliefs you qualify for

 

[henrylbh]

You can ask the government that question, but those are the rules.

I think I know the basic answer, though. Tax deferral has value (a cost to the public purse), and the government doesn't want to grant an unlimited tax deferral once withdrawals start. It's not in the public's interest to subsidize bequests, basically. Rules like this one are pretty common around the world. For example, the U.S. has Required Minimum Distributions (RMDs) on its Traditional 401(k)s and Traditional Individual Retirement Accounts (IRAs). Withdrawals must start no later than age 70 1/2. Roth accounts are different and don't have RMDs.

The single premium life annuity exception to the 10 year withdrawal rule is something the government explains. The government wants to encourage lifetime retirement financial security, for many good public policy reasons, so they grant that particular single exception.

What rules talking you?

Why you think you know the basic answer? Why not you ask the government the rules?

He is thinking there must be an age limit to commence SRS withdrawal and I am thinking why would there be a need to impose an age limit since whatever deferred will be brought to tax ultimately, meaning to say there is no need to impose age limit.

 

[starlight318]

If kick bucket, half of all the SRS funds will be taxable. If the person is still working and worse, in a higher tax bracket then he could probably end up paying more tax.

Best is to plan to retire and start drawing down SRS and empty the account as early as u can. Im planning to empty my srs within 5 years (from 62).

 

[crimsontactics]

If kick bucket, half of all the SRS funds will be taxable. If the person is still working and worse, in a higher tax bracket then he could probably end up paying more tax.

Best is to plan to retire and start drawing down SRS and empty the account as early as u can. Im planning to empty my srs within 5 years (from 62).

That person is not paying more tax.

That person is dead.

The person/people receiving his money is paying more tax.

Which I don't see a problem since its additional income for them.

Sent from . using GAGT

 

[foozgarden]

hmm how about existing equities/UT bought with SRS?
the 50% is taxed on the amount sold?
or , only when the amout is drawout from the srs account?

ie. 400k worth in UT.
sold off everything.
withdraw 40k pa.
tax is on the 400k sold?
or 40k pa? (in this case. 0 tax)

 

[crimsontactics]

hmm how about existing equities/UT bought with SRS?
the 50% is taxed on the amount sold?
or , only when the amout is drawout from the srs account?

ie. 400k worth in UT.
sold off everything.
withdraw 40k pa.
tax is on the 400k sold?
or 40k pa? (in this case. 0 tax)

40k pa

Sent from . using GAGT

 

[JuniorLion]

hmm how about existing equities/UT bought with SRS?
the 50% is taxed on the amount sold?
or , only when the amout is drawout from the srs account?

ie. 400k worth in UT.
sold off everything.
withdraw 40k pa.
tax is on the 400k sold?
or 40k pa? (in this case. 0 tax)

All forum posts are very clear. Only withdrawals are taxed, not the amount sold.

 

[henrylbh]

Best is to plan to retire and start drawing down SRS and empty the account as early as u can. Im planning to empty my srs within 5 years (from 62).

Would you retire if you are earning a lot? If not, it's pay back time and may be more than the tax reliefs claimed. If SRS gives good returns, returns becomes taxable. That's the negative side of SRS.

 

[starlight318]

Would you retire if you are earning a lot? If not, it's pay back time and may be more than the tax reliefs claimed. If SRS gives good returns, returns becomes taxable. That's the negative side of SRS.

Thats why SRS is not for everyone. For me, would definitely be retired regardless of how much i'm earning. My target age is before 55. At least semi retire, slow down n enjoy life before im too old.

 

[JuniorLion]

Would you retire if you are earning a lot?

Yes, if you're maybe 80 and maybe it's time to retire. There's more to life than making money.

 

[compro_1975]

u can withdraw 40k without being tax as 50% of 40k is 20k only, still untaxable..


https://www.iras.gov.sg/irashome/In...etirement-Scheme--SRS-/Tax-on-SRS-withdrawal/

 

[crimsontactics]

u can withdraw 40k without being tax as 50% of 40k is 20k only, still untaxable..


https://www.iras.gov.sg/irashome/In...etirement-Scheme--SRS-/Tax-on-SRS-withdrawal/

Actually many people can withdraw more than that due to tax deductions like NSmen tax relief and earned income relief

Sent from . using GAGT

 

[ocs_woodlands]

Can I check whether anyone knows how to check the contribution history over the past years since the first time a contribution was made?

I have a certain amount in my SRS but I have forgotten what is the amount of "capital" aka contributions I have made into SRS over the years..

 

[JuniorLion]

Can I check whether anyone knows how to check the contribution history over the past years since the first time a contribution was made?

I have a certain amount in my SRS but I have forgotten what is the amount of "capital" aka contributions I have made into SRS over the years..

You can just go back to the bank and get them to retrieve the records.

 

[compro_1975]

Actually many people can withdraw more than that due to tax deductions like NSmen tax relief and earned income relief

Sent from . using GAGT

But come to retirement age no more NS active

 

[henrylbh]

You can just go back to the bank and get them to retrieve the records.

Retrieving past info from bank is expensive.

 

[henrylbh]

But come to retirement age no more NS active

Tax relief for NS man is given as long as the person lives.