SRS

[HVR]

Managed to save some money via SRS in the past few years. Besides saving in taxes, the amount we can save over the course of time is also substantial. If contribute $12750 every year for 20 years, the amount save alone is already $255000 without factoring interest and potential investment returns. We should take advantage of this scheme if we can.

[cool_hi]

May i know how does saving in SRS help to save in taxes? U mean income tax right?if my hubby contribute to my SRS, his income tax can be reduced or something like this??

[Jennifer]

May i know how does saving in SRS help to save in taxes? U mean income tax right?if my hubby contribute to my SRS, his income tax can be reduced or something like this??

Need to open an SRS account with a bank first.

SRS contribution is optional, the maximum amount will be determined n advised.

Direct relief against total income, thereby reducing the chargeable income for personal income taxation.

Hubby has a SRS account with DBS, can use the SRS account to buy DBS recommended pdts for investment purposes.

[Rejoin]

May i know how does saving in SRS help to save in taxes? U mean income tax right?if my hubby contribute to my SRS, his income tax can be reduced or something like this??

Please bear in mind that the reduction in taxes is temporary. The taxes will be charged (at the 50% discount rate) when you withdraw it in the future (after the age of 62).

However, at that time, if you have no income, then withdrawal will be completely free.

[ngl2010]

May i know how does saving in SRS help to save in taxes? U mean income tax right?if my hubby contribute to my SRS, his income tax can be reduced or something like this??

By the way, another way to reduce chargeable income is to top up your parents-in-law's CPF. It can be part of your hubby's allowance to your parents-in-law. It is tax deductible up to $7000/year.

[starlight1968sg]

Managed to save some money via SRS in the past few years. Besides saving in taxes, the amount we can save over the course of time is also substantial. If contribute $12750 every year for 20 years, the amount save alone is already $255000 without factoring interest and potential investment returns. We should take advantage of this scheme if we can.

Am thinking along the same line too.
Suppose one contributes 12k per year now, this would translate to 1k per mth to use in the future.

[apple79]

so what sort of investment most of you like to invest in using SRS?. most of my clients are conservative and prefer to put it in endowment.

[cool_hi]

Thanks for info..so can hubby top up his own SRS a/c or my SRS a/c, in order to reduce his charegable income for his income tax?
If i am working, can he still top up for me?
Thanks!

[hquek]

Thanks for info..so can hubby top up his own SRS a/c or my SRS a/c, in order to reduce his charegable income for his income tax?
If i am working, can he still top up for me?
Thanks!

it's like a bank account (but easy to go in, not easy to go out). SRS deduction is only for the person whose account it is under.

If your hubby top up for you, YOU will get deduction and not him. He can top up your account but he won't get 'anything out of it' - except hugs and kisses from you.

[Jennifer]

Withdrawal of penalty free SRS upon meeting the retirement age

http://www.iras.gov.sg/irashome/page04.aspx?id=3346


Withdrawal period is over 10 years.

If one dies earlier, the sum that is not withdrawn applied 50% will be subjected to tax. Since the tax bracket will be higher, the tax amount is likely to be high too. See the IRAS example for member C.

Though the IRAS website states spreading out the withdrawal will generally result in greater tax savings ( found a few lines above example for member C), I think it is better to plan to withdraw larger amount in the initial few years in order to hv a smaller sum towards the end of the 10 years period, just in case, the member dies before the 10 years period is up. Of course must plan such that one still stays within the zero tax bracket.

Makes sense?