Discuss about the different financial investment options, financial markets, common investment products and what is trending in the market.
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malcontent
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by malcontent » Sun, 01 Jan 2023 2:09 pm
If you really want to get into the weeds, there is also a timing difference between when the contribution is made and when the tax savings is realized.
The bigger issue is the disadvantage in investment cost for comparable long-term investment vehicles. For investment horizons of 10 years or more, equity funds are usually the investment of choice, and that is where you often see SRS eligible vehicles dragging down returns with higher fees, often 1% or more annually when you compare with non-SRS equity funds. That can really eat up any/all tax arbitrage quickly over time if you’re not careful.
Every great and deep difficulty bears in itself its own solution. It forces us to change our thinking in order to find it - Niels Bohr
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Wd40
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by Wd40 » Sun, 01 Jan 2023 2:17 pm
I decided not to invest in SRS this year. I just look at my overall tax amount of 10k it is peanuts really compared to a salary of 143k. I just pay it and get it over with. If I had a Singapore PR, my decision would be very different. But when I leave Singapore, I want to take my money with me.
My only regret is when I came to Singapore in 2009, I should have opened an SRS account and just $1 in it. I have already completed 13 years. So I could have just withdrawn everything while leaving.
I spent a lot of time in this forum since 2009 and the financial knowledge shared in this forum is really pathetic. HWZ is miles ahead. I wish I discovered HWZ's Money Mind section as soon as I came here.
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malcontent
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by malcontent » Sun, 01 Jan 2023 2:28 pm
My employer already contributed $30k+, and I decided to top it up to the full $35.7k in 2022. This is the first time I’ve done that. I only did so because I have pretty good confidence that my expenses with S27 are not going to eat into the tax arbitrage significantly. However, this is a unique situation for me, because I’m a US taxpayer and can get the 30% dividend withholdings on S27 refunded each year. Therefore, my only ongoing expense is the 0.09% annually, which is competitive.
Every great and deep difficulty bears in itself its own solution. It forces us to change our thinking in order to find it - Niels Bohr
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singaporeflyer
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by singaporeflyer » Sun, 01 Jan 2023 10:10 pm
Wd40 wrote: ↑Sun, 01 Jan 2023 2:17 pm
I spent a lot of time in this forum since 2009 and the financial knowledge shared in this forum is really pathetic. HWZ is miles ahead. I wish I discovered HWZ's Money Mind section as soon as I came here.
Different forums specialise in different areas.
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Poh475
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by Poh475 » Mon, 02 Jan 2023 12:59 am
Just Curious on the total yield of the SRS investments currently, is something that provides around 8% a year attractive for an SRS investment?
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malcontent
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by malcontent » Mon, 02 Jan 2023 2:40 am
singaporeflyer wrote: ↑Sun, 01 Jan 2023 10:10 pm
Wd40 wrote: ↑Sun, 01 Jan 2023 2:17 pm
I spent a lot of time in this forum since 2009 and the financial knowledge shared in this forum is really pathetic. HWZ is miles ahead. I wish I discovered HWZ's Money Mind section as soon as I came here.
Different forums specialise in different areas.
Yes, I actually got the tip to invest my SRS in S27 on HWZ. As a US person, there aren’t many investment options that are not considered a PFIC under the US tax code. S27 is one of just three SGX traded ETFs that are explicitly non-PFIC because all 3 are US domiciled and US traded securities that are merely cross-traded on the SGX. It is exceedingly rare thing to find outside the US, and an exceptionally unique opportunity for US persons investing SRS here.
Every great and deep difficulty bears in itself its own solution. It forces us to change our thinking in order to find it - Niels Bohr
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malcontent
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by malcontent » Mon, 02 Jan 2023 11:55 am
Poh475 wrote: ↑Mon, 02 Jan 2023 12:59 am
Just Curious on the total yield of the SRS investments currently, is something that provides around 8% a year attractive for an SRS investment?
SRS is an account, not an investment. There is no set yield for SRS investments. You invest the money in your SRS account similarly to how you would with non-SRS accounts. It is the same risk versus return proposition — the higher the yield the higher the risk.
The main difference with SRS is that you are limited to local investment options which typically carry higher fees and eat away your investment yield, especially over long periods of time due to the compounding effect.
Worse yet, you’ve got a lot of sales people circling like sharks hoping to dupe unsuspecting victims into buying expensive investment products which underperform the market and charge exorbitant fees. Such people should be truly be ashamed of themselves.
Every great and deep difficulty bears in itself its own solution. It forces us to change our thinking in order to find it - Niels Bohr
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YYCole
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by YYCole » Mon, 02 Jan 2023 5:49 pm
With Rates at current level, can use SRS to buy SSB.
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malcontent
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by malcontent » Tue, 03 Jan 2023 4:54 am
YYCole wrote: ↑Mon, 02 Jan 2023 5:49 pm
With Rates at current level, can use SRS to buy SSB.
I can think of some scenarios where investing SRS in SSB makes sense.
One example, you have a short investment horizon = you are close to retirement age and about to begin withdrawing your SRS.
Another example, you need to increase the bond allocation in your overall investment portfolio = you have a large equity portfolio outside SRS and need to de-risk.
Or even perhaps an investor who is highly risk averse and does not wish to take age appropriate levels of risk. That would not be my recommendation, but everyone needs to know their own risk tolerances.
Every great and deep difficulty bears in itself its own solution. It forces us to change our thinking in order to find it - Niels Bohr
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PNGMK
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by PNGMK » Tue, 03 Jan 2023 7:03 am
YYCole wrote: ↑Mon, 02 Jan 2023 5:49 pm
With Rates at current level, can use SRS to buy SSB.
It's easier to buy an ILP (short term investment life policy) from an insurance company with a guaranteed payout than deal with CDP etc. GE are offering 4% policies right now.
I not lawyer/teacher/CPA.
You've been arrested? Law Society of Singapore can provide referrals.
You want an International School job? School website or
http://www.ISS.edu
Your rugrat needs a School? Avoid for profit schools
You need Tax advice? Ask a CPA
You ran away without doing NS? Shame on you!
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malcontent
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by malcontent » Fri, 06 Jan 2023 6:32 pm
I just bought another 20 shares of S27. I feel fortunate to have this low cost S&P500 ETF option for my SRS account here. Oddly, the buy/sell spreads seem to have gotten worse since they lowered the minimum # of shares from 10 to 1 on the SGX, but it’s still within reason most of the time. The Fx rate has also been surprisingly competitive. I really can’t complain. The fact that S27 is not considered a PFIC and the fact that I get the 30% dividend withholdings refunded are two cherries on top.
In the back of my mind though, I have to wonder how long S27 will continue to be listed on the SGX. And, if it gets de-listed, can I continue to hold it in my SRS? I sure hope so.
Every great and deep difficulty bears in itself its own solution. It forces us to change our thinking in order to find it - Niels Bohr
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PNGMK
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by PNGMK » Fri, 06 Jan 2023 9:58 pm
I just had a letter from Great Eastern paying out a ILP I had bought with SRS two years ago. It had a 10.7% return on the invested capital in 24 months. The money is back in my SRS on the 8th and I'll reinvest it again . ILP's get bad press but honestly they have worked ok for me.
I not lawyer/teacher/CPA.
You've been arrested? Law Society of Singapore can provide referrals.
You want an International School job? School website or
http://www.ISS.edu
Your rugrat needs a School? Avoid for profit schools
You need Tax advice? Ask a CPA
You ran away without doing NS? Shame on you!
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malcontent
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by malcontent » Sat, 07 Jan 2023 1:00 am
PNGMK wrote: ↑Fri, 06 Jan 2023 9:58 pm
I just had a letter from Great Eastern paying out a ILP I had bought with SRS two years ago. It had a 10.7% return on the invested capital in 24 months. The money is back in my SRS on the 8th and I'll reinvest it again . ILP's get bad press but honestly they have worked ok for me.
Do they disclose what the underlying investment is?
Looking back at my S27 purchases in 2020, those are up over 12% at present.
However, I continued to DCA in 2021 and 2022, so in aggregate, my average cost basis is right around break-even at the moment.
Every great and deep difficulty bears in itself its own solution. It forces us to change our thinking in order to find it - Niels Bohr
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PNGMK
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by PNGMK » Sat, 07 Jan 2023 8:38 am
No Mal - probably their general investment pool. I actually do quite a bit of diversification with my SRS via great eastern as they have quite a few funds and policies types to buy into. However as I get closer to withdrawal age in SRS (62 for me) I have moved towards capital guaranteed policies or funds.
I not lawyer/teacher/CPA.
You've been arrested? Law Society of Singapore can provide referrals.
You want an International School job? School website or
http://www.ISS.edu
Your rugrat needs a School? Avoid for profit schools
You need Tax advice? Ask a CPA
You ran away without doing NS? Shame on you!
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malcontent
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by malcontent » Sat, 07 Jan 2023 7:36 pm
PNGMK wrote: ↑Sat, 07 Jan 2023 8:38 am
No Mal - probably their general investment pool. I actually do quite a bit of diversification with my SRS via great eastern as they have quite a few funds and policies types to buy into. However as I get closer to withdrawal age in SRS (62 for me) I have moved towards capital guaranteed policies or funds.
I’m always leery of using any insurance products for investment purposes, but glad it has worked out for you. Just make sure you are not holding any ILPs when/if you become US taxable — such products would almost certainly be treated as a PFIC under the US tax code, which is a real nightmare.
I don’t distinguish between SRS and non-SRS money when it comes to sequence of withdrawal. Any SRS that gets withdrawn will simply merge into my overall portfolio. Shares of S27 will become shares of SPY and held in my US brokerage account until they need to be tapped.
Every great and deep difficulty bears in itself its own solution. It forces us to change our thinking in order to find it - Niels Bohr
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