Before the year 2022 ends, let’s talk about Tax Savings and how opening or contributing to a Supplementary Retirement Scheme (SRS) account can help reduce your tax burden.
Re-cap on SRS
SRS is a voluntary contribution scheme which offers attractive tax benefits and helps to accumulate funds for your retirement. Each dollar of SRS contribution will reduce your income chargeable to tax by a dollar and may even lower your income tax bracket.
How it works – Reduce Taxes by up to $3,366
The maximum allowable contribution is $15,300 (for Singaporeans) and the tax savings you would enjoy is dependent on your tax bracket.
For example, if you are a Singaporean earning a chargeable income between $80,000 -$120,000 (Tax Bracket 11.5%), your tax savings will be $1,750.50 ($15,300*11.5%).
Accumulation of Retirement Nest Egg
While reducing your taxes, your SRS contribution can also be put to more efficient use through investing in a wide range of retirement solutions including Institutional Funds.
What Are Institutional Funds?
– Institutional funds are low-expense investments intended for large institutions and Accredited Investors (income > $300k/yr OR Net Assets > $2mil)
– Such funds are not readily available on Retail Platforms / Banks
– One of our Recommended Funds has been performing more than 10%pa over the last 10years
Regular Savings Makes A Golden Retirement
If you make annual contributions to your SRS account for 20 years, your SRS can potentially grow up to >$505,000 if you invest and reap a modest return of 5.5%p.a. Now, this is what we call saving and growing your nest egg effortlessly!
Important: The information and opinions in this article are for general information purposes only. They should not be relied on as professional financial advice. Readers should seek independent financial advice that is customised to their specific financial objectives, situations & needs. This advertisement or publication has not been reviewed by the Monetary Authority of Singapore.
I am a wealth management coach who encourages and motivates women, individuals and families seeking financial stability and freedom for their future. I work with clients to create personalized insurances and investment strategies to achieve their objectives. (Refer to my clients testimonials on their experiences)
I have more than 20 years experience in the financial industry and have worked in various international financial institutions in different capacities. A few years ago, I made a switch from Private Banking to become a financial advisory manager at Financial Alliance.
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