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What to invest using SRS ??

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User offline. Last seen 6 years 2 weeks ago. Offline
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any suggestions?   or anyone has any good experience to share on how to invest in SRS ?

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lioninvestor's picture
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SRS monies can be used to buy stocks and quite a number of unit trusts.
So your options shouldn't be too restricted.


Come visit the Den of the Lion Investor for more investing ideas.
http://www.lioninvestor.com

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any restrictions on the stocks you can trade ?

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lohbl wrote:
any restrictions on the stocks you can trade ?

Definitely not as strict as CPF OA. Best to check with your broker. Also, you will need to inform him after you make the trade so that they will take the funds from SRS.


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thanks.

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i have onced considered opening an SRS account, but do you guys think that SRS account work better only for those with a higher tax liability?

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qwerty123 wrote:
i have onced considered opening an SRS account, but do you guys think that SRS account work better only for those with a higher tax liability?

It works for anyone who needs to pay tax. Think about it this way. You need to set aside a sum of money for retirement anyway. And you shouldn't be using this money before then. If that's the case, why not use the SRS to save on taxes?

Even a 4% savings is an immediate 4% boost to your returns.

$9600 cash in hand to invest or $10000 in SRS to invest. Which one do you want?

In a worst case scenario where you lose your job and have no money left, you can always pay the 5% penalty and withdraw from SRS.


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lioninvestor wrote:
qwerty123 wrote:
i have onced considered opening an SRS account, but do you guys think that SRS account work better only for those with a higher tax liability?

It works for anyone who needs to pay tax. Think about it this way. You need to set aside a sum of money for retirement anyway. And you shouldn't be using this money before then. If that's the case, why not use the SRS to save on taxes?

Even a 4% savings is an immediate 4% boost to your returns.

$9600 cash in hand to invest or $10000 in SRS to invest. Which one do you want?

In a worst case scenario where you lose your job and have no money left, you can always pay the 5% penalty and withdraw from SRS.


Come visit the Den of the Lion Investor for more investing ideas.
http://www.lioninvestor.com

how exactly does an SRS work? I don't really understand it from UOB's website.
I can make a voluntary comtribution to my SRS account every year but subject to a cap?

Then next year, I can use my SRS money to pay for my tax? If I use my SRS to pay for tax, does the IRA calculate the relief for me? Do I have to declare to IRA that I am using my SRS account for my tax payment?

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works best if you earn above 80K per year ... so with SRS, u can reduce yr taxable income to a lower tax band...

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lohbl wrote:
works best if you earn above 80K per year ... so with SRS, u can reduce yr taxable income to a lower tax band...

my income tax is considered to be on the low side and I don't earn 80k per year. So it's not really adviseable to open the SRS account?

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Does SRS account appeal only to those earning big bucks? Would it be advantageous for us ordinary folks to open an SRS account and invest??
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Simply put, the money you contribute to your SRS account will be tax deductible. This will be determined by IRAS automatically.

The higher the tax bracket you are in, the higher your savings.

First $20,000
Next $10,000
0
3.50
 
First $30,000
Next $10,000
-
5.50
 
First $40,000
Next $40,000
-
8.50
 
First $80,000
Next $80,000
-
14
 
First $160,000
Next $160,000
-
17
 
First $320,000
Above $320,000
-
20

Anyone earning more than 20k will be able to save on his taxes.
40-80k range you save 8.5%!

Eg. You earn $50k. You contribute 10k into your SRS. You would have saved $850 in taxes.
Just by the act of shifting money from cash to SRS, I have given an immediate boost to my returns.
$9150 cash Vs $10k in SRS.

http://www.iras.gov.sg/irasHome/page03.aspx?id=6096

Withdrawals can be spaced out to prevent kena tax on withdrawal.

If anything, you guys should at least open a SRS account, put in a token sum to lock in the age of withdrawal which is the current retirement age.


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There's a cap of $11,475 (local or PR) for the amount you can contribute to SRS every year. For foreigners, the amount is $26,775.


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the cap of 11K is based on yr salary.   if u exceep cpf contribution of 4.5K pm, then u are at this max cap category.

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lohbl wrote:
the cap of 11K is based on yr salary.   if u exceep cpf contribution of 4.5K pm, then u are at this max cap category.

Hi lohbl,

The rules has already been changed such that the cap is $11475 for everyone regardless of his salary. The previous formula was too tedious. Even if you earn only 40k/year, you can still contribute $11475 if you are a local.


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where you get this info from ?   i read ministry of finance website, n there's still a cap ...

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This has already been in place for a couple of years. Speaking from my personal experience.

http://www.iras.gov.sg/irasHome/page03.aspx?id=6098

This SRS contribution cap is regardless of the actual income received from employment, trade, business, profession or vocation in the previous year.

This means that you can still make maximum SRS contribution even if your income is lesser than the absolute income base or incurred trade loss in the previous year.


Come visit the Den of the Lion Investor for more investing ideas.
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hmmm...i will need to read up more on this...seems kinda confusing...i am very confused everytime when it comes to taxes...

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This has already been in place for a couple of years. Speaking from my personal experience. http://www.iras.gov.sg/irasHome/page03.aspx?id=6098 This SRS contribution cap is regardless of the actual income received from employment, trade, business, profession or vocation in the previous year. This means that you can still make maximum SRS contribution even if your income is lesser than the absolute income base or incurred trade loss in the previous year.

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SRS can only be opened at local banks?
Does SRS account work in a similar way as normal bank's savings or CPF accounts? As in, does the account give you interest?

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u want to join me in opening new SRS a/c ?

I just opened one with ocbc bank :)

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lohbl wrote:
u want to join me in opening new SRS a/c ?

I just opened one with ocbc bank :)

i am still considering...because i am not sure whether does it suit me or not...
i understand that there's a penalty if you want to terminate the account right?

lioninvestor's picture
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Yes, only 3 local banks.

Yes, savings deposit rate. Better to invest the money than leave it there.


Come visit the Den of the Lion Investor for more investing ideas.
http://www.lioninvestor.com

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how nice if they can give cpf interest rate :) 

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lohbl wrote:
how nice if they can give cpf interest rate :) 

if they could give cpf rates, then i think i would invest only part of it and leave the rest in the account to earn some risk-free interest!
hahaha

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lioninvestor wrote:
Yes, only 3 local banks.

Yes, savings deposit rate. Better to invest the money than leave it there.


Come visit the Den of the Lion Investor for more investing ideas.
http://www.lioninvestor.com

Any idea which are the 3 banks offering the SRS account?

Btw, the moment you open your SRS account, you can use the amount inside for investing?

Whats the difference between the SRS verses CPF-OA & CPF-SA?
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Contest theory: More entries = More chances - Concept of Probability.
Time & Tide waits for no Man.

lioninvestor's picture
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Deathsender wrote:
lioninvestor wrote:
Yes, only 3 local banks.

Yes, savings deposit rate. Better to invest the money than leave it there.


Come visit the Den of the Lion Investor for more investing ideas.
http://www.lioninvestor.com

Any idea which are the 3 banks offering the SRS account?

Btw, the moment you open your SRS account, you can use the amount inside for investing?

Whats the difference between the SRS verses CPF-OA & CPF-SA?
----------------------------------------------------------------------------------------
Contest theory: More entries = More chances - Concept of Probability.
Time & Tide waits for no Man.

The 3 local banks. DBS, UOB and OCBC. The monies contributed can be used to buy shares and SRS approved unit trusts.

The SRS account is not CPF.

http://www.iras.gov.sg/irasHome/page03.aspx?id=6096


Come visit the Den of the Lion Investor for more investing ideas.
http://www.lioninvestor.com

User offline. Last seen 6 years 2 weeks ago. Offline
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Mr Lion,
what's the service charges for investing using SRS ??

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lohbl wrote:
Mr Lion,
what's the service charges for investing using SRS ??

When it first started out, there were no service charges at all the 3 banks.

There still isn't any at OCBC now. You can ask DBS/UOB on their status now.

Of course, the usual commissions will apply.


Come visit the Den of the Lion Investor for more investing ideas.
http://www.lioninvestor.com

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yup ... thanks.

do you know of any way to regularly contribute to the SRS account thru'  electronic means than cheque deposit ??

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lohbl wrote:
yup ... thanks.

do you know of any way to regularly contribute to the SRS account thru'  electronic means than cheque deposit ??

You can make a fund transfer via internet banking. It's like transfering money to your bank account. The last time round, I did manage to fund my ocbc account via finatiq.

Just make sure you have already made the necessary employment declarations or proof that allows you to contribute to SRS for that year.


Come visit the Den of the Lion Investor for more investing ideas.
http://www.lioninvestor.com

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i tried last time ... got rejected back ...

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You can't really terminate the account..

But if you do an early withdrawal before retirement, you will be charged a penalty of 5%. The amount will also be accessed as income for that year.

Open the account now, put in a few dollars to lock in the withdrawal age. You never know how high your income might go in the future.

If you wait 10 years and by then the retirement age is 70 when you open your SRS account, that is the age you can start taking money out without penalty.


Come visit the Den of the Lion Investor for more investing ideas.
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Once I opened this account, will there have any penalties if I stopped contributing to it for a year?

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qwerty123 wrote:
Once I opened this account, will there have any penalties if I stopped contributing to it for a year?

There is no obligation to contribute. It is as and when you want subject to the yearly cap.


Come visit the Den of the Lion Investor for more investing ideas.
http://www.lioninvestor.com

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lioninvestor wrote:
qwerty123 wrote:
Once I opened this account, will there have any penalties if I stopped contributing to it for a year?

There is no obligation to contribute. It is as and when you want subject to the yearly cap.


Come visit the Den of the Lion Investor for more investing ideas.
http://www.lioninvestor.com

i see...thanks..

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Oh thanks for the clarification. :)
----------------------------------------------------------------------------------------
Contest theory: More entries = More chances - Concept of Probability.
Time & Tide waits for no Man.

User offline. Last seen 6 years 2 weeks ago. Offline
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my SRS account is still invested in cash ... still dare not go into market ... phew!

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SRS can be used to invest in Singapore Shares or any shares listed on the Singapore Stock Exchange. Currently all the 3 banks (DBS, UOB and OCBC) tasked as custodian banks for SRS accounts does not yet have the features to enable you to invest your funds outside of Singapore. According to the MAS website, such limitation is not regulatory, but dependent on the service provider. There is no clear understanding at this point.

We have written an article on SRS investing. At this point, we would like to declare that we have ZERO vested interest in people investing or not investing in SRS. We are a research focused Mortgage Advisory. But if you are interested to talk to us more as a discussion, we are happy to answer some of the questions which you may have, as part of our social duty to educate.

http://www.propertybuyer.com.sg/viewnews.php?article=56


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