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Dear team Seedly, I am foreigner making 190K. I may stay in SG for couple of years and then move back to the USA. Do you think it makes sense to use SRS? My tax calculation says it can reduce a significant amount of tax. if yes, what investment instruments you advice for 7+ % gains?
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Colin Lim
16 Apr 2020
Financial Services Consultant at Colin Lim
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SRS: Expats can contribute up to $35,700 per annum.
Major Benefits.
1. Only 50% of the funds invested in an SRS account are taxed at withdrawal.
Taxation is assessed at your income tax level at time of withdrawal.
Withdrawal can be spread out over up to 10 years, creating a regular income stream in retirement.
Flexible investment options: SRS contributions can be used to purchase a wide variety of investments including; unit trusts, ETF's shares, bonds.
IF you are earning 190k, your income tax tier is 160k: 13,950, next 40k: 18%
13950+ (30*18%)=19350.(total)
You can reduce your tax payable through tax reliefs. If u contribute to SRS.
You can drop to below tier... 120k: 7950,40k: 15%... So u have to caculate your srs contribution so that you do not need to contribute the max amount.
You can use FSM, stashaway(my fav robo advisor) to do investment.