today is the last day for topping up CPF/SRS and Jan 1 is the first day to top up again

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PNGMK
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Re: today is the last day for topping up CPF/SRS and Jan 1 is the first day to top up again

Post by PNGMK » Sun, 10 Jan 2021 8:48 pm

malcontent wrote:
Sun, 10 Jan 2021 12:07 pm
The banks usually default to $1000 and you can adjust that in the online banking app. It is quick and easy to do, takes effect immediately.
Yes I tried awhile ago and couldn't but I'll try again.
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Re: today is the last day for topping up CPF/SRS and Jan 1 is the first day to top up again

Post by PNGMK » Thu, 25 Nov 2021 10:39 am

Just a reminder that we are entering the last 5 weeks for SRS and CPF top ups for the 2021 tax year.

SRS Limits:
15,300 for SC PR.
35,700 for expats.

CPF contribution limits:
37,740

Cheques take time to clear. Don't miss out. If your MA is low, top that up first as it is 100% tax deductible (MA limit is $63,000 this year) to $7,000.

1st Jan don't forget to top up your RA (with external cash) if you're retired and have CPF for a maximum interest effect. I don't know what the new limit is going to be but forecasts are around 3 x basic limit (96k) = 288k.

In 2022 the tax deduction for VC (for self and family members) will be raised to $8,000 - a total of $16,000 is available.

If you're approaching 55 and have CPF, look into "shielding schemes" to maximize your SA account for the maximum interest before CPF grab it and shove it into RA.
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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Re: today is the last day for topping up CPF/SRS and Jan 1 is the first day to top up again

Post by GSM8 » Thu, 25 Nov 2021 11:29 am

Great reminder, thanks PNGMK. An additional nuance comes to mind. If your MA is already maxed at 63k, then top back up to 63k as soon as there is a withdrawal, for example, when your IP or MediShield plan deducts, but before your next employment monthly contribution is made (else it will be channeled into MA if below 63k at that point in time)

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Re: today is the last day for topping up CPF/SRS and Jan 1 is the first day to top up again

Post by PNGMK » Thu, 25 Nov 2021 11:35 am

GSM8 wrote:
Thu, 25 Nov 2021 11:29 am
Great reminder, thanks PNGMK. An additional nuance comes to mind. If your MA is already maxed at 63k, then top back up to 63k as soon as there is a withdrawal, for example, when your IP or MediShield plan deducts, but before your next employment monthly contribution is made (else it will be channeled into MA if below 63k at that point in time)
Yes good point.
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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Re: today is the last day for topping up CPF/SRS and Jan 1 is the first day to top up again

Post by malcontent » Thu, 25 Nov 2021 1:15 pm

My wife is an SRS virgin, thought of popping hers open this year so that she can unshackle by 62. The problem is… I’m just not totally convinced that the juice is worth the squeeze.

Being restricted to Singapore investments adds cost that eats up the tax savings over time. This is especially true if we are not resident in SG during retirement and have to pay 15% nonresident on half, effectively 7.5%.

You would be surprised what an extra 0.5% annual investment fee over a decade or more can do. It’s a bit like having a termite problem.
It’s not what happens to you, but how you react to it that matters ~ Epictetus

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Re: today is the last day for topping up CPF/SRS and Jan 1 is the first day to top up again

Post by PNGMK » Thu, 25 Nov 2021 1:42 pm

malcontent wrote:
Thu, 25 Nov 2021 1:15 pm
My wife is an SRS virgin, thought of popping hers open this year so that she can unshackle by 62. The problem is… I’m just not totally convinced that the juice is worth the squeeze.

Being restricted to Singapore investments adds cost that eats up the tax savings over time. This is especially true if we are not resident in SG during retirement and have to pay 15% nonresident on half, effectively 7.5%.

You would be surprised what an extra 0.5% annual investment fee over a decade or more can do. It’s a bit like having a termite problem.
Absolutely depends on her tax bracket IMO.

If she's in the 20% bracket as I suspect she is that is a $3,000 pa saving. Even just doing that for 10 years into a low interest but capital guaranteed fund is a good return IMO.
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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Re: today is the last day for topping up CPF/SRS and Jan 1 is the first day to top up again

Post by malcontent » Thu, 25 Nov 2021 10:39 pm

Just a 0.5% higher costs will eat up around 3% of the tax savings in 10 years, 6.5% in 20 years, and 10.5% in 30 years.

I believe the SRS investment with the lowest expense differential is SGX listed S27 which has a TER+WHT of just under 0.5% versus the best non-SRS equivalent, London listed CSPX which has a TER+WHT of 0.25%.

With this most optimistic 0.25% higher cost, it eats up 5% in tax savings over 30 years, or 2.5% in 15 years. In this scenario, it might be worthwhile, and each subsequent year will be slightly better - with less time for those costs to compound and do their damage.

I guess it might be worth it in this narrow case.
It’s not what happens to you, but how you react to it that matters ~ Epictetus

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Re: today is the last day for topping up CPF/SRS and Jan 1 is the first day to top up again

Post by PNGMK » Fri, 26 Nov 2021 6:06 am

The other psychological reason is that the incentive for SRS is quite strong IME. As the year draws to a close the thought of paying 3k extra in tax looms and I find it easy to find the $15,300.
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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