This year, I decided to complete the maximum contribution of $15,300 to my Supplementary Retirement Scheme (SRS) account early before end of 1Q 2022 so that I can focus on building up war chest and long-term investment in the rest of the year.
The main benefit of SRS is to save taxes aka cash outlay to the taxman next year.
Another benefit is to build up a cannot-touch ultra-long term portfolio using SRS funds.
There are also other options of endowment or insurance plans, annuity plans, bonds, funds or robo-advisor investment portfolios that we could invest with SRS funds.
However, SRS savings may not be for everyone because of the long lock-down period. We can only withdraw up to $40k from SRS tax-free for 10 years from the first penalty-free withdrawal, upon reaching the statutory retirement age (63 w.e.f 1 Jul 2022). There is a penalty incurred for withdrawing funds from SRS prior to retirement age, on top of being slapped with tax on the withdrawn amount.
I believe SRS is only beneficial for people who are having income at least in the 7% tax bracket.
I have already contributed $1k to SRS early this year.
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