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Paul Cheong

27 May 2019

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General Investing

If I do not have to pay any taxes in a particular year because I have enough reliefs/rebates that reduce my tax to $0, does it still make sense to contribute to SRS?

Should I still contribute to SRS if payable tax is already zero?

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Alvin Teo

27 May 2019

Aviva Relationship Consultant at Aviva Affinity Channel

Short answer: no

longer answer: SRS is mainly to reduce taxes so since you have reduced your tax so much, why lock your money as opposed to having liquid cash? You can use liquid cash to buy investments and ice cream, SRS can only buy the former.

Assuming you are years away from your retirement, there is various penalties and/or restrictions on your SRS money. maybe when your taxable incomes becomes sizable then parking some money aside to reduce taxable income can be considered. That is not to say you should max out the contributions every time.

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