facebookUnderstand that all cash value withdrawn from SRS is taxable. If I put in total $100K in SRS and manage to grow it until 500K, doesn't it mean that I will be taxed at $500K income instead? - Seedly

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Anonymous

15 Dec 2020

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General Investing

Understand that all cash value withdrawn from SRS is taxable. If I put in total $100K in SRS and manage to grow it until 500K, doesn't it mean that I will be taxed at $500K income instead?

Understand that all cash value withdrawn from SRS is taxable, albeit only 50% of them when we reach retirement age. And that is also higher than the initial amount that I've put in.

Discussion (12)

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Endowus

15 Dec 2020

Hi Anon,

You can choose to withdraw your SRS monies across 10 years at retirement age, and only half the amount withdrawn will be taxable.

We can grow our SRS to even 1 million with consistent top-ups and still be better than paying tax upfront and growing our wealth through cash investments.

You can read more here: https://endowus.com/insights/solving-the-srs-to...

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If your money grows from 100k-500k that's a happy problem. The tax amount is also by half. You can also drawdown on a 10 year basis. with some tax relief, you probably dont need to pay any tax.

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I always find it amusing when people get lost with huge numbers. Let's calculate your actual tax pay...

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