Wanting to enjoy more for our retirement nest egg doesn’t always mean we have to work harder at our job. By tapping on various schemes available to us, we can accumulate more in our retirement nest egg without needing to work longer hours.
One scheme we can tap into is the Supplementary Retirement Scheme (SRS). The SRS is part of the Singapore government’s multi-pronged strategy to address the financial needs of Singaporeans in our latter years by helping us to save more for our retirement.
Unlike CPF, where contributions from our salaries are compulsory, contributions made to our SRS account are voluntary. Voluntary contributions made are also eligible for dollar-for-dollar tax relief of up to $15,300 for Singapore citizens, and $35,700 for foreigners.
If we are intending to open and top-up our SRS account, presumably to enjoy the income tax relief, we should do so before the end of the year. However, be mindful that contributions made to our SRS account, when left un-invested, will earn us only a paltry interest rate of just 0.05%.
Why Invest Our SRS Savings?
To grow our SRS savings, we need to work our SRS savings harder by investing it for a higher return to grow our retirement nest egg. If we don’t intend to invest, we would be better off just topping up our CPF Special Account instead, which earns a risk-free interest of at least 4.0% per annum.
One way to invest our SRS savings is through Exchange Traded Funds (ETFs) listed on the Singapore Exchange (SGX).
For investors who want diversification in their investments, ETFs can give exposure to different asset classes including Equities, Fixed Income, REITs & Gold ETFs. Some of these ETFs can give us overseas investment exposure.
Check out some of the other benefits of investing our SRS savings via ETFs in the graphics below.
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