I started serious Investing Journey in Jan 2000 to create wealth through long-term investing and short-term trading; but as from April 2013 my Journey in Investing has changed to create Retirement Income for Life till 85 years old in 2041 for two persons over market cycles of Bull and Bear.

Since 2017 after retiring from full-time job as employee; I am moving towards Investing Nirvana - Freehold Investment Income for Life investing strategy where 100% of investment income from portfolio investment is cashed out to support household expenses i.e. not a single cent of re-investing!

It is 57% (2017 to Aug 2022) to the Land of Investing Nirvana - Freehold Income for Life!

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Sunday, 29 November 2015

SRS - Annualized Return Over 3 Years!


Since Uncle8888 is retiring next year in 2016; and with no more wife and children tax relief for Assessment Year 2015, he decided to open his SRS Account with DBS and top up $12,750 to get some tax relief. 

He was given $50 SRS Cash Rebate for this SRS Account opening. Together with his small tax saving and $50, he will annualise it over three years as Return since he plans to withdraw the full amount of $12,750 (hopefully more) at 62. At the same time, he will need to look for one yield stock to invest soon as the interest rate in SRS Account is really suck!
 
But ... his real Total Return over 3 years may turn out to be negative so he has to be wise enough not to lose his hard earned money for this SRS Top Up. 

He observed that people tend to be more eager and rush to invest their SRS fund same like CPFIS once they see some money left idling in these accounts. 

Next year, he will top up another $15,300 for Assessment Year 2016 and annualized the tax saving over three years i.e. 2016 to 2019. It will be game over for SRS as unemployed doesn't have to pay any income tax!

 $15.3K will be withdraw at 63.


Posted by Createwealth8888 at 08:08
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11 comments:

  1. Siew Mun29 November 2015 at 10:21:00 GMT+8

    Good move, I started topping up SRS since last year and channelling my tithes to an IPC arm of the Church to reduce what owed to Caesar quite a bit

    ReplyDelete
  2. Createwealth888829 November 2015 at 10:35:00 GMT+8

    Once we annualized the tax saving over the number of lock up years and think rationally and mathematically SRS's real return on tax saving may be just so so since we can alternatively invest with our cash account without being lock up.



    ReplyDelete
  3. Siew Mun29 November 2015 at 10:59:00 GMT+8

    Think we still can invest in equities via SRS albeit that there is extra fees of $25.

    ReplyDelete
    Replies
    1. Createwealth888829 November 2015 at 12:16:00 GMT+8

      Ya.

      From my conversation with those SRS holders, I observed that these SRS holders tend to rush into investing their SRS fund once they have top up. Probably, due to super low interest rate in SRS account that discourage patience and waiting. Interesting to know how long one holds after topping up SRS?

      Delete
  4. Siew Mun29 November 2015 at 12:24:00 GMT+8

    I am been holding for 2 years. The length of my holding without rushing to invest depends on equity market and building a sizable SRS war chest. Money is rotting in SRS for the last 2 years :-(

    ReplyDelete
  5. la papillion29 November 2015 at 20:33:00 GMT+8

    Hi bro8888,

    I'm very happy to hear that you're retiring in sept 2016! I'll arrange a celebration party for you when it comes nearer :) This kind of event is worth celebrating!

    ReplyDelete
  6. Siew Mun30 November 2015 at 11:20:00 GMT+8

    Can I join in the celebration?

    ReplyDelete

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