Good time to start SRS investments for 2013?

They say "Time in the markets is more important than timing the markets and every crisis presents an opportunity". In an unexpected incident, both the Bond and Equity markets crashed at the same time since the statement by the US Fed Chairman on the easing of liquidity on 22nd May 2013. 

Though, i don't believe in timing the market, the crash in both the markets present a very good opportunity to look at our SRS investments for current year. Most of the Asian indices have fallen around 9% and the Sovereign Singapore government bond has fallen around 4.5%. This is an excerpt from the straits times on the recent bond fall 

"But Singapore has one of the biggest foreign reserves in the world and its lenders are among the best-capitalised banks globally. It makes no sense for investors to suddenly lose their appetite over ultra-safe Singapore government bonds."

Please find below the details about SRS. The attached document illustrates how the tax benefits passively boost your returns in a huge way. Should you require more information, Please feel free to call (8113 3272) or email me. 

Benefits of Supplementary Retirement Scheme (SRS) :

According to a survey released earlier this year, Singaporeans want to retire before 60 but many feel they do not have the means to do so. In fact, only 14 per cent believed they were financially ready for retirement while 47 per cent were uncertain if they had enough money to retire on.

This is where SRS investments plays a huge hand and it’s an extremely useful tool to be retirement ready. Start today for an early retirement with sufficient balance in the bank account!!

Amount	Years of Investment	Potential Investment  Return	Current Tax Rate	Potential Tax Rebate	Future Value
Singapore Citizens & Permanent Residents
-12,750	20	5%	5%	637.50	$448,838.70
-12,750	20	5%	10%	1,275.00	$471,280.63
-12,750	20	5%	15%	1,912.50	$493,722.57
-12,750	20	5%	20%	2,550.00	$516,164.50
-12,750	30	5%	5%	637.50	$909,035.81
-12,750	30	5%	10%	1,275.00	$954,487.60
-12,750	30	5%	15%	1,912.50	$999,939.39
-12,750	30	5%	20%	2,550.00	$1,045,391.18
Employment Pass Holders
-29,750	10	5%	5%	1,487.50	$395,561.15
-29,750	10	5%	10%	2,975.00	$415,339.20
-29,750	10	5%	15%	4,462.50	$435,117.26
-29,750	10	5%	20%	5,950.00	$454,895.32

Assumptions:

• Investment returns ARE NOT guaranteed and 5% is taken for illustration purposes only.

• Returns INCLUDE one-time charges of 5% for investment in different Mutual funds. 

• Tax rate is based on individual's income and could vary based on the income levels.

• 50% tax is payable on withdrawal post-retirement , phased withdrawal could help lower tax rates.

• 105% of the withdrawal amount is payable for premature termination.

• Tax rebate is considered similar to dividend re-investment for insurance purposes.

• Maximum Limits of $12,750 for PR/Singaporeans and $29,750 for Employment Pass holders.

What is SRS?

The SRS is part of the Singapore government’s multi-pronged strategy to address the financial needs of a greying population by helping Singaporeans to save more for their old age. It began in 2001 and is operated by the private sector. The SRS complements the Central Provident Fund (CPF). CPF savings are meant to provide for housing and medical needs and for basic living needs after retirement. Unlike the CPF scheme, participation in SRS is voluntary. SRS members can contribute a varying amount to SRS (subject to a cap) at their own discretion. The contributions may be used to purchase various investment instruments.

Benefits

·         The SRS offers attractive tax benefits. Contributions to SRS are eligible for tax relief, investment returns are accumulated tax-free and only 50% of the withdrawals from SRS are taxable at retirement (referred to as a “50% tax concession”).

·         Einstein said, "Compound interest is the eighth wonder of the world." – Make the tax benefits and the return on your principal work for you during your retirement period.

·         Tax chargeable at withdrawal would be at a reduced tax rate compared to your current tax rate, thus resulting in huge savings.

Investment Options

·         Knowledge Savvy investors could choose from a wide range of funds, stocks and there is always the option of Fixed Deposits as well.

·         Investments are managed by professional fund managers with a great track record and a long term target of around  5%. is a realistic expectation.

Call NOW to grow your wealth wisely.. .