I always say this to my clients:
“Either you earn more, or spend less; and what you do with the difference will determine how fast you can reach financial independence”
These are contractual savings or investment plans to help you save consistently, to reach your financial goals.
As a foreigner, you do not have the safety net from CPF like Singaporeans & PRs to fund your future retirement lifestyle.
Usually mid-term plans from 5-10yrs would be a good start to build your wealth.
If you have longer-term plans in Singapore, you can consider plans ranging from 10-15 years.
2022 has been a volatile year, with most investment assets suffering losses.
If your goal is to preserve your capital or receive steady retirement income, it’s best to allocate your spare funds to capital guaranteed plans.
Examples of such plans include endowments (pays lumpsum at end of term), passive income (income payouts within 5yrs) or annuities (income payouts from retirement age).
Did you know? Policies in Singapore are protected under the Policyowners Protection Scheme, which is managed by the Monetary Authority of Singapore.
Investment -linked plans are investments done through insurance companies with the following benefits:
If you have a 5-10year investment horizon, this would be the best time to take advantage of market volatility to build your investment portfolio.
As you may know, the S&P500 went into a bear market in June 22 after falling >20% from 3Jan high. Historically, the average duration of a bear market is 19months. In this case, the next 12months would be crucial to start your regular investment for the next 10years to meet your retirement and other long-term goals.
Ideally would be to use a platform which allows you to invest more (through welcome/start-up bonus) to buy more units during these periods of volatility, as well as protect your investment from downside risks.
Supplementary Retirement Scheme (SRS) is a tax deferment scheme which allows you to reduce your taxable income.
The contribution is voluntary and you may contribute up to $35,700/yr.
For example, if you contribute the maximum amount of $35,700 and your tax bracket is 20%, you would have saved $7,140/yr in taxes!
Read more on SRS contributions and tax relief here
Once you have contributed to your SRS account, you may use these funds for selected capital guaranteed and investment plans.
SRS is a great tool for saving tax and growing your wealth at the same time. If you contribute and invest $35,700/yr over the next 10 years at 5%pa, you would have accumulated $450,000!
If you’d like to know which is the best way to grow your Wealth, do drop me an email at winniechan@fapl.sg or chat with me here
Related articles:
Financial Planning for Foreigners in Singapore
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.
Winnie Chan is a distinguished Certified Financial Planner (CFP) with over a decade of expertise in financial advisory services. Her commitment to her clients has led many to achieve their financial aspirations while ensuring their families’ protection. Winnie‘s extensive experience in insurance claims has been instrumental in securing successful payouts, providing crucial financial relief during challenging times.
Her passion for community engagement is evident through her financial education initiatives. She has conducted insightful financial talks for esteemed organizations such as Carousell Group, Singapore National Eye Centre and Singtel, empowering their employees with valuable financial knowledge.
Outside of her professional commitments, Winnie balances her life with a passion for fitness and music. She enjoys rigorous workouts at the gym and is a pianist, recently awarded ABRSM Piano Performance Grade 6 (Merit).
