Benjamin Franklin said these famous words, “In this world, nothing can be certain, except death and taxes.” While Singapore has one of the lowest income tax rates in the world, being able to save on income tax is one of the surefire ways to accumulate wealth and plan for retirement. Tax savings, compounded over time, can form a significant part of your retirement wealth.

0:00 Introduction
11:18 CPF Special Account and Medisave top-ups and related tax reliefs
19:04 CPF top-up QnA
22:52 SRS 101
29:41 SRS investment options and why most people are placing money in cash 34:22 Why you should invest your SRS account
41:28 Why you should contribute earlier, and more into your SRS account
47:26 QnA Part 2
1:00:17 Dividend Withholding tax hacks for Singaporeans

Excerpts from the Presentation

Can Medisave be used to pay for private insurance premiums? (21:15)

Yes, Medisave can be used to pay for private health care insurance premiums (Integrated Shield Plans), up to a certain limit. That will be:

  • $300 per year for those at age 40 years and below on their next birthday
  • $600 per year for those at age 41 to 70 years on their next birthday
  • $900 per year for those at age 71 years and above on their next birthday

Should I top up SRS or CPF account if I want to get tax reliefs? (46:25)

For many young working adults in our 30s and even in our 40s, we have a long investment horizon of over 20 years. We can consider topping up our SRS over CPF top-up to try to grow our wealth at more than the CPF SA/MA rates of 4% by investing in a portfolio that holds more equities.

If you can afford to do both top-ups, you may want to do both since you can truly make full use of all tax reliefs, limited to the yearly $80,000 tax relief cap. Singapore tax residents should try to make full use of the tax relief as early and as young as possible for retirement planning purposes.

Is it possible to keep SRS investments without selling after the 10 year withdrawal limit? (49:58)

It is possible to transfer your stocks from your SRS accounts to your CDP account instead of liquidating it. Regardless, you still have to pay taxes, if applicable, for the value of the stocks that you are holding in SRS at retirement.

What do you mean when you say that SRS top-ups are tax deferred? (50:32)

It is a form of tax deferral because you only do not have to pay take for the contribution, but later on your withdrawals may be subjected to income tax (50% of the withdrawal amount). Effectively you are deferring an amount of taxes paid now, to potentially pay later on.