A Detailed Look at the SRS: A Practical Retirement ProgramA Detailed Look at the SRS: A Practical Retirement Program
According to studies, many Singaporeans still underestimate retirement planning. About 80% of them, in fact. While it is safe to say that many of them are going to live comfortably, it can be said that there is plenty of room for improvement. This is most true if you have a retirement planning SG beside you that can help you in various monetary decisions.
Remember, retirement planning is all about having a financial program that is both comfortable, robust, and everything in between. And the right retirement planning advisor can play a key role in helping you achieve one.
Now, it should be noted that there are several retirement plans out there that you can choose from, and it is best to analyze them to find out which one perfectly fits your preferences, budget, and the like. One of the most notable amongst them is the Supplementary Retirement Scheme or SRS.
Check it out here and seek retirement planning advice in Singapore before signing the dotted line.
SRS explained
The SRS is a government scheme that–together with Central Provident Fund (CPF)–is specifically designed as well as set up to help Singaporeans who want to make sure that they are financially stable upon retirement.
The SRS came into fruition as a supplementary to Singapore’s CPF, a compulsory comprehensive savings and pension plan for Singaporean employees as well as permanent residents. It can deliver very basic retirement income, and just that. While it can cover food, medicines, and other necessities, it is not meant to allow you to live a, say, affluent lifestyle.
That is where the SRS (Supplementary Retirement Scheme) comes in. In very basic terms, it is an account that you can open to stash your retirement savings or funds. On top of this, aside from offering financial stability during retirement years, it is important to note that SRS contributions are voluntary incentive programs that are eligible for tax relief the following year. That being said, if you contribute to your SRS account by January 2022, you are going to enjoy tax relief in the Year of Assessment, which is 2023.
Can you utilize your funds for SRS investments?
If you ask any retirement planning advisor in Singapore, he or she would immediately say yes. That is because you can and you should. In line with this, it is important to note that putting your money in an SRS account and not doing anything is like putting money into waste.
Putting the said factor into consideration, rather than letting the money in your account lose its value due to inflation as well as other related factors, it is way better to put those funds into investments. And the best part? Your investment is not going to get taxed.
There is, however, a caveat: you can only invest your SRS funds in programs that are approved by the Singaporean government. They include, but are not limited to the following:
- Index funds
- Unit trusts
- Blue chip shares
- SGD fixed deposits
- Endowment insurance plans
- Singapore Savings Bonds
In line with this, if you are not sure which one to go for, it is best to ask the opinion of a professional who is experienced and knowledgeable in retirement planning advice in Singapore. He or she can give essential pointers on where you can use your SRS funds.
Summing up
These are only some of the basics of the government’s SRS program. In line with this, it is important to note that arguably the best reason it has become popular to many is its tax relief advantage. That being said, it is best to seriously consider the said program, especially if you want to achieve financial stability in your retirement years.