The Supplementary Retirement Scheme, or
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”.1
It is similar to the Central Provident Fund (CPF) in that it is a retirement
savings scheme, but the SRS is voluntary and there is some flexibility to it as
compared to the CPF.
You
could open a SRS account with any of the three local banks; DBS, OCBC and UOB,
but you can only have one SRS account at any one time.
The SRS
has some tax benefits, one of which is that contributions are eligible for tax
reliefs. To qualify for the tax relief for your next year’s tax returns (in
this case, for 2017), you would need to contribute funds to the SRS account by
31 December 2016.2 Therefore in a way this post is apt as a reminder
at this time of the year as you have slightly more than one month in deciding
whether to partake in this scheme.
The
Bedokian Portfolio, including rules on asset class diversification and
rebalancing, can be applied using your SRS funds, similar to a Bedokian
Portfolio built with your disposable income.
If you
have an existing Bedokian Portfolio funded from your disposable income and you
wish to apply the portfolio using the SRS, you have a choice of either
combining the two into one Bedokian Portfolio, or maintain two separate
Bedokian Portfolios, though the latter would be more tedious administratively.
Another way would be to adopt the core-satellite strategy3 whereby
the SRS can be used on core financial instruments and the satellite ones are
maintained by your own funds.
http://www.mof.gov.sg/MOF-For/Individuals/Supplementary-Retirement-Scheme-SRS
(accessed 21 Nov 2016)
2 - Inland Revenue Authority of Singapore.
SRS Contributions. https://www.iras.gov.sg/irashome/Individuals/Locals/Working-Out-Your-Taxes/Special-tax-schemes/Supplementary-Retirement-Scheme--SRS-/SRS-contributions/
(accessed 21 Nov 2016)
3 - The Bedokian Portfolio, p122-123
No comments:
Post a Comment