Your Views on SRS

[SBC]

Hi all,

Please share your views.

1. Do you believe in income-tax reduction scheme?
2. If yes, how much will you top-up your SRS per-year?
3. How will utilize your SRS fund to grow it further?
4. How many years since you had started this top up.
5. Accumulated SRS funds to-date.
6. What other income-tax reduction methods have you been practicing?

My response:
1. Yes
2. 8k to 12k depending on cash flow that year.
3. Mainly used it to buy local stocks.
4. About 15 years
5. About 100k
6. Top to parent’s CPF RA

 

[dry_county]

Hi all,

Please share your views.

1. Do you believe in income-tax reduction scheme?
2. If yes, how much will you top-up your SRS per-year?
3. How will utilize your SRS fund to grow it further?
4. How many years since you had started this top up.
5. Accumulated SRS funds to-date.
6. What other income-tax reduction methods have you been practicing?

My response:
1. Yes
2. 8k to 12k depending on cash flow that year.
3. Mainly used it to buy local stocks.
4. About 15 years
5. About 100k
6. Top to parent’s CPF RA

My response very similar to yours:
1. Yes
2. Max out every year since 2012
3. Buy unit trusts. Mostly Singapore focused unit trusts
4. 7 years
5. About 100k
6. Top up own CPF $7k a year.

 

[d9_lives]

SRS might not be suitable for those who want to retire early (say..by 45).

 

[Guojing88]

Srs is especially good for single working adults and those without kids too.

I have been topping up max since 2009, and use them to buy shares.

 

[BBCWatcher]

1. Do you believe in income-tax reduction scheme?

In the abstract, yes, but SRS accounts are only Singapore tax advantaged, maybe. The tax advantages can be partially or completely lost if/when you're a U.S. person or a resident of another country.

In my case the U.S. immediately "claws back" a big chunk of the initial local tax savings. I also pay U.S. income tax at standard rates (including NIIT) on the interest and cash dividends earned in the account, every year. If there's any future Singapore income tax paid upon withdrawal I might be able to take a tax credit to offset future U.S. income tax, but the calculation will be...not fun.

2. If yes, how much will you top-up your SRS per-year?

I have a SRS account, but I'm not happy I do. It hasn't been worth the bother given point #1. I'm not inclined to add to it.

3. How will utilize your SRS fund to grow it further?

This is quite difficult since most of the few available choices are U.S. tax hostile. A couple bank stocks with reinvested dividends in my case.

4. How many years since you had started this top up.

A few, but I can't remember exactly how many.

5. Accumulated SRS funds to-date.

More than zero, which is too many.

6. What other income-tax reduction methods have you been practicing?

CPF top ups, U.S. Individual Retirement Account (IRA) contributions, and U.S. 529 account contributions.

 

[soneat]

1. Yes, but not to grow it excessively such that tax rate will be high at old age.
2. Depends on the year. S$0 to S$15300
3. REITS
4. 2012 started, not every year will do the top-up.
5. Total contribution S$67K. Current valuation around S$100K.
6. Top-Up to parent RA.

 

[madtari]

Is using SRS to buy reits a wise choice? Reits frequently have rights issue and you need to ensure you have idle cash sitting in your arms account. Frequent corporate actions may incur additional fees as well.

1. Yes, but not to grow it excessively such that tax rate will be high at old age.
2. Depends on the year. S$0 to S$15300
3. REITS
4. 2012 started, not every year will do the top-up.
5. Total contribution S$67K. Current valuation around S$100K.
6. Top-Up to parent RA.

 

[ocs_woodlands]

Hi all,

Please share your views.

1. Do you believe in income-tax reduction scheme?
2. If yes, how much will you top-up your SRS per-year?
3. How will utilize your SRS fund to grow it further?
4. How many years since you had started this top up.
5. Accumulated SRS funds to-date.
6. What other income-tax reduction methods have you been practicing?

Yes.
Top up the max. This year 15.3k
Buy stocks, SSB
Can't remember
About $120-130K?
PTR which was used up long long time ago

 

[assiak71]

https://forums.hardwarezone.com.sg/money-mind-210/srs-portfolio-5998560.html

15.3k a year will grow to a significant amount over 20-30 years. Do it

 

[soneat]

Is using SRS to buy reits a wise choice? Reits frequently have rights issue and you need to ensure you have idle cash sitting in your arms account. Frequent corporate actions may incur additional fees as well.

Well, wise or not depends on individual's perspective.

Personally, I know what I am doing, am happy with my progress and I do not blindly follow the others.
- Fees kept to the minimal (normal 0.28% brokerage and a small fee per counter).
- One or two trades a year.
- Dividends reinvested
- Minimal effort

 

[SBC]

1. Yes, but not to grow it excessively such that tax rate will be high at old age.
2. Depends on the year. S$0 to S$15300
3. REITS
4. 2012 started, not every year will do the top-up.
5. Total contribution S$67K. Current valuation around S$100K.
6. Top-Up to parent RA.

Good performance on your SRS returns.

 

[SBC]

Yes.
Top up the max. This year 15.3k
Buy stocks, SSB
Can't remember
About $120-130K?
PTR which was used up long long time ago

My PTR still can last at least 8-9 years. Haha

 

[zumaba]

Actually if your tax bracket is only for 7%, SRS is not so attractive as a sure-win. Unless you can make sure to invest your SRS to work out a return at least 3% per year, which is not high but also not every one can meet I guess?

 

[iceblendedchoc]

I used srs for sti etf purchases.

 

[eD1s0n]

Actually if your tax bracket is only for 7%, SRS is not so attractive as a sure-win. Unless you can make sure to invest your SRS to work out a return at least 3% per year, which is not high but also not every one can meet I guess?

what is the tax bracket that makes SRS attractive?

 

[dry_county]

what is the tax bracket that makes SRS attractive?

To me, at least 10-15% marginal tax rate before it becomes attractive.

 

[eD1s0n]

To me, at least 10-15% marginal tax rate before it becomes attractive.

that means the 120k and above income bracket right?

 

[ocs_woodlands]

My PTR still can last at least 8-9 years. Haha

wah.. you/your wife must have been very productive

 

[limster]

To me, at least 10-15% marginal tax rate before it becomes attractive.

I agree, 15% first before starting SRS, and perhaps 20-25 years to retirement age.

To me, there was no point starting when rate was below 15% and more than 30 years to retirement...

 

[darknite84]

Earn below $160k p.a net assessable income, dont bother with SRS. If above, max srs, use it to buy etf or reits. Then contribute 7k to cpf to hit FRS asap