Saving for your retirement is a viable investment decision to secure a comfortable life in your golden years. But, that’s barely possible with the current taxation schemes taking a significant part of your hard-earned pennies that could have been useful for the future. That’s why having a supplementary retirement scheme (SRS) account and contributing to it comes in handy. These accounts offer much more than you can imagine, and their benefits are far better than what other retirement investment accounts provide. Here are the cons of contributing to an SRS account in Singapore.
1. Tax Relief on Contributions
SRS account contributions are eligible for tax relief, making it a viable retirement investment. SRS accounts have become so sought-after in Singapore since other investment accounts hardly offer tax benefits. Reducing your chargeable income is pretty straightforward, and every dollar you add to your account contributes to your tax relief for the following year of assessment. With an SRS account, your income determines your payable tax until you reach the threshold. And the good thing is that you don’t have to commit to paying it.
2. Your Investment Returns Are Tax-Free
Not only are your SRS account contributions tax-free, but your investment returns are also exempt from tax charges. Although taxation applies on withdrawal, the taxman would hardly deduct any of it while it stays in your account. If you’re considering having an SRS account in Singapore, please visit the https://www.ocbc.com/personal-banking/investments/supplementary-retirement-scheme-account.page. Of course, as you stash your retirement funds, investing further is usually out of the question. Your savings only earn you a little return, but investing further multiplies them.
3. You Can Invest in Your SRS Account Further
As much as you earn from your tax benefits, you can further invest in your SRS account, allowing you to save more for your retirement. And as said before, this investment is usually exempt from tax obligations, so you have an incredible chance of saving sufficiently. Your savings will accrue without deductions, much better than other accounts like the central provident funds (CPF). And once you reach the legal age of retirement, reaping big isn’t so far-fetched.
4. As Little as 50 Percent of Your Withdrawals Are Taxable at Retirement
Of course, your withdrawals are taxable, but your investment is usually not touchable as it lies in your account. But as much as it’s taxable when you withdraw it at retirement, only half of it will be legible for tax deductions. So, you’ll get the rest as complete as it is, but pay a little summation to the taxman. That’s a reprieve compared to other retirement investment accounts, hence your reason to invest in an SRS account.
An SRS account helps you save better due to its tax benefits. Besides, it’s also possible to invest further, unlike with the central provident fund or other retirement savings accounts. These accounts also offer the advantage of minimal tax on withdrawals, and the taxman won’t touch a penny in your account. If anything, having an SRS account is everything you need to secure your future and live through your golden years comfortably.