One can use the SRS monies to trade in stocks or ETFs as mentioned by Dennis. However one does not need to leave the stock for 20 odd years. In fact you can sell the stocks for capital gain, and the profits go back into the SRS account. When the time is right, use the SRS monies to buy stocks/ETFs at low price.
To me the advantage of the SRS is to shave off my income tax contribution, at the same time, I use the money I contribute to build my nest egg. The monies do not sit idle.
All about SRS Supplementary Retirement Scheme
Moderators: alvin, learner, Dennis Ng
Yes, SRS cannot be use to pay insurance. SRS is mean for retirement planning. However, you can grow your SRS money via stock and ETF investment.vlink75 wrote:I remember that I have read before that SRS account can use to pay insurance premium. I did check with my financial planner and he told me that there is no such product that enable SRS to pay the premium, is that true?
Price is what you pay; Value is what you get
RayNg
RayNg
Thank ngtfook for prompt reply.
The reason for asking because is written in MOF website on the use of SRS fund. It do mention the SRS fund can be use to pay premium but it seems there is no such product avaliable in the market now .
Quote from http://www.ifaq.gov.sg/mof/apps/fcd_faqmain.aspx
SUPPLEMENTARY RETIREMENT SCHEME (SRS)
1.
What investment instruments can I purchase using my SRS funds?
You may invest in a wide range of financial assets, including those offered by financial institutions (product providers) other than your SRS Operator. Your product providers will be able to provide information on the products that they are offering for SRS. However, direct property investments are not allowed. As for life insurance products, the following conditions shall apply:
- Only single premium products are allowed (including recurrent single premium products, encompassing both annuity and non-annuity plans).
- Life cover (including total and permanent disability benefits) will be capped at 3 times the single premium.
- Plans can allow for a contribution continuation feature/benefit upon disability.
- Other types of life insurance e.g. critical illness, health and long-term care are excluded.
- Trust nomination is not allowed for life insurance products purchased using SRS funds.
You should note that investment choices are made on a caveat emptor basis.
The reason for asking because is written in MOF website on the use of SRS fund. It do mention the SRS fund can be use to pay premium but it seems there is no such product avaliable in the market now .
Quote from http://www.ifaq.gov.sg/mof/apps/fcd_faqmain.aspx
SUPPLEMENTARY RETIREMENT SCHEME (SRS)
1.
What investment instruments can I purchase using my SRS funds?
You may invest in a wide range of financial assets, including those offered by financial institutions (product providers) other than your SRS Operator. Your product providers will be able to provide information on the products that they are offering for SRS. However, direct property investments are not allowed. As for life insurance products, the following conditions shall apply:
- Only single premium products are allowed (including recurrent single premium products, encompassing both annuity and non-annuity plans).
- Life cover (including total and permanent disability benefits) will be capped at 3 times the single premium.
- Plans can allow for a contribution continuation feature/benefit upon disability.
- Other types of life insurance e.g. critical illness, health and long-term care are excluded.
- Trust nomination is not allowed for life insurance products purchased using SRS funds.
You should note that investment choices are made on a caveat emptor basis.
Hi Vlink75,
Ouh! I didn't know that.
Thanks for pointing out the SRS usage. I learn something new today.
Ouh! I didn't know that.
Thanks for pointing out the SRS usage. I learn something new today.
vlink75 wrote:Thank ngtfook for prompt reply.
The reason for asking because is written in MOF website on the use of SRS fund. It do mention the SRS fund can be use to pay premium but it seems there is no such product avaliable in the market now .
Quote from http://www.ifaq.gov.sg/mof/apps/fcd_faqmain.aspx
SUPPLEMENTARY RETIREMENT SCHEME (SRS)
1.
What investment instruments can I purchase using my SRS funds?
You may invest in a wide range of financial assets, including those offered by financial institutions (product providers) other than your SRS Operator. Your product providers will be able to provide information on the products that they are offering for SRS. However, direct property investments are not allowed. As for life insurance products, the following conditions shall apply:
- Only single premium products are allowed (including recurrent single premium products, encompassing both annuity and non-annuity plans).
- Life cover (including total and permanent disability benefits) will be capped at 3 times the single premium.
- Plans can allow for a contribution continuation feature/benefit upon disability.
- Other types of life insurance e.g. critical illness, health and long-term care are excluded.
- Trust nomination is not allowed for life insurance products purchased using SRS funds.
You should note that investment choices are made on a caveat emptor basis.
Price is what you pay; Value is what you get
RayNg
RayNg
To enjoy tax benefits for income earned this year, your SRS contributions must be made by 31st December which means there's only 3 more working days left this year. Cheque deposits must be cleared by 31st December.
I have opened a SRS account today at UOB and it just took me 30 minutes to complete all the process. You can also open the account at either DBS or OCBC.
Regards,
Joseph Teo
I have opened a SRS account today at UOB and it just took me 30 minutes to complete all the process. You can also open the account at either DBS or OCBC.
Regards,
Joseph Teo
If I confirm will not touch the money till I retire, is it not CPF top-up better than SRS top-up? Since CPF earn you more interest and you can also opt to use it for stock investment? Am I right, or wrong?JosephTeo wrote:To enjoy tax benefits for income earned this year, your SRS contributions must be made by 31st December which means there's only 3 more working days left this year. Cheque deposits must be cleared by 31st December.
I have opened a SRS account today at UOB and it just took me 30 minutes to complete all the process. You can also open the account at either DBS or OCBC.
Regards,
Joseph Teo
-
woonty
GCONG wrote:If I confirm will not touch the money till I retire, is it not CPF top-up better than SRS top-up? Since CPF earn you more interest and you can also opt to use it for stock investment? Am I right, or wrong?JosephTeo wrote:To enjoy tax benefits for income earned this year, your SRS contributions must be made by 31st December which means there's only 3 more working days left this year. Cheque deposits must be cleared by 31st December.
I have opened a SRS account today at UOB and it just took me 30 minutes to complete all the process. You can also open the account at either DBS or OCBC.
Regards,
Joseph Teo
Hi GCONG
Yes, I assume your're self-employed doing voluntary contribution can save you up to 20% tax & earning you 3.5% for the 1st $20K of your OA ($60K of your combined 3 a/c, not quite sure please do your own read up at CPF website).
It can be used for Stocks (35% of the amount above $20K), Unit Trusts (100% of the amount above $20K) & insurance endowment (relative safer though projected yields but guaranteed insurance coverage up to 2.5X)
And you can grow it while using it to service your mortgage & protected from creditors (worst case scenario)
But CPF once contributed it'll be "out of my reach" (can be good or bad) but SRS I can still liquidate with 5% penalty & pay my due in tax so can still re-deploy for "life & death" situation (that you have not covered by insurance, hopefully not)
Why not contribute BOTH if your financial situation allows:
2011
Self-employed CPF voluntary contribution = $30,600
Supplementary Retirement Scheme (SRS) = $12,750
And grow by investing from there or do nothing for the time being...
Happy New Year
Cheers
woonty