If today you’re a self employed and have $20k set aside for tax reduction, which would you choose and why? CPF voluntary contribution VS CPF Cash Top up relief VS SRS contribution?

Hi anon,

I did RSTU and then CPF Cash Top Up till the annual limit.

I am leaving SRS for later on my life when RSTU is no longer possible and I have to rely on SRS for tax reliefs.

There is however nothing wrong with doing all 3, depending on what you prefer

CPF top ups are able to help grow all 3 accounts and after 55, you can withdraw SA and OA in excess of FRS if you don't do property pledge. It is however, illiquid. It does have a decent return thought (2.5% to 4%). Not many options available for CPF investments for OA and SA monies.

RSTU is even more illiquid as RSTU monies will specifically be set aside to be put in RA. Returns are good (4%). SA investment options are the most restricted in terms of approved products.

SRS has the most flexibility as it is practically cash. If you really need the money, you can withdraw it since there is only the 5% penalty as a barrier. But if one ever really needs the monies, that 5% will be insignificant compared to the absolute amount of money in the account. It doesn't have good returns (bank interest) so you'll have to invest it. However there are plenty of investment options for SRS.

So it depends on what you would prefer.

I will try my best to claim eveything under buisness expense. Till i have a unprofitable buisness😉