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Elijah Lee

Helping busy professionals achieve their financial dreams & goals with sound, logical advice & planning. Next seminar in link:

Elijah Lee

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Independent Financial Advisor at Phillip Securities (Jurong East)

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Helping busy professionals achieve their financial dreams & goals with sound, logical advice & planning. Next seminar in link:

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Independent Financial Advisor at Phillip Securities (Jurong East)

Elijah Lee

Top Contributor

Independent Financial Advisor at Phillip Securities (Jurong East)

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Milelion

Miles

I've flown Business on Thai, SQ, ANA, Finnair and United (haha). Guess the best one would be SQ by far. Still the only airline that greeted me by name when I boarded the plane (how on earth they knew it was me still beats me), and the massive seat/bed just added to it (2006 J). The SQ cabin crew know how to have that slight edge on other airlines (very attentive with refills, clearing, tidying up my seat while I went to the toilet, etc), it's something I cannot explain, but if they didn't, Thai and ANA would have been my next favourite experiences. Thai just kept stuffing me with garlic bread, and the ANA service was in all aspects what you'd come to expect from the Japanese. Finnair was good, just not in the same league as the Asian carriers. Dear United....2-4-2 in business is not business.....

Retirement

CPF

Supplementary Retirement Scheme (SRS)

Hi LH, SRS as a scheme was conceived to encourage Singaporeans to save more for retirement. To attract people to contribute, tax relief on SRS contributions was introduced. My thoughts and the key things you need to take note are: - You can open an SRS account online with a local bank. Just put a dollar in. There's no need to go down to the branch - Contributing to your SRS will 'lock in' your future withdrawal age at the prevailing retirement age when you contribute (currently age 62). So just lock it in first, even if you don't intend to contribute - Contributions are voluntary , subject to a cap (Cap amount is depending on whether you are SC/PR or foreigner). Even if you have high income tax to pay, but you need the cash flow (e.g. due to family expenses), then it might be better not to contribute even though you won't be able to reduce your tax, as your cash is needed for day to day matters - Your SRS contribution will reduce your income tax as it confers tax relief. If you don't have any income tax or low income tax to pay, it may not be worth contributing . If you have a lot of reliefs (I see this often with working mothers), it may also not be worth contributing too. Generally, I'd recommend looking at SRS if you are in the 7% bracket, and definitely contribute if you are in the 11.5% bracket. - Your SRS monies can be used to invest (please don't leave it lying in the bank) in various asset classes, and you will need to know the pros and cons of each asset class to see what suits you, along with how this ties into your overall retirement planning. - Your SRS can be withdrawn prematurely but with a penalty, unless under exceptional circumstances. Foreigners may withdraw if they leave Singapore for at least 10 years. - After you reach retirement age, your first withdrawal will trigger a 10 year withdrawal period whereby you should withdrawal your SRS holdings by the end of this 10 year period - Half of your withdrawal is considered your income stream (still subjected to income tax calculations). If you don't withdraw, you can keep your assets in the SRS account. A complete analysis of SRS and how it fits into your financial situation will be possible if you are able to provide more information, or if you sit down with an advisor to discuss. But those key points should provide you with some information to start. Due to practical limitations and to prevent this answer from turning into a novel, I can't elaborate on all the points above in writing. To answer your second question on how many people actively claim the tax relief, I was able to find the number of SRS account holders at end Dec 2018 to be 156820, so I can hypothesize that the number will be around there. ( https://www.mof.gov.sg/docs/default-source/mof-for/individuals/srs/compiled-srs-statistics-2019.pdf ) Incidentally I am conducting an SRS seminar in Dec, and you might want to drop by to hear more. I'll put the link in my profile soon.

Milelion

Miles

Hi anon, Buying miles would cost US$40 per block of 1000 miles, or around 5.6 cpm, which is a ridiculously high cost. That is around US$320 to get that business class ticket to Tokyo. What I can suggest is to front load some spending. Buy grocery vouchers. Buy gift cards. Buy Gift cards. Bring forth your dental treatments. Bring forth purchases for things that you would have gotten anyway (like a new kettle if the one at home is old) Hopefully that'll bring down your shortfall to something more managable, and then you can just buy the remaining miles. I'm sure Aik Kai and the rest might have more suggestions on how to conjure miles quickly, so I'll leave it to them to add on. Take note that if for some reason you book the award flight and have to cancel, the miles will be redeposited into your KF account, except for the ones that were purchased outright . Be very careful of this and make sure your tracel dates are locked in. And this is the very reason why I prefer to keep my miles on the bank side rather than credit to KF, and with a card where miles do not expire, so that I will always have emergency stash to transfer over.

Insurance

Investment Linked Policies (ILP)

Endowment Policies

Hi anon, There is a very big difference between the plans. Both aim to accumulate wealth, but ILPs can have protection elements. Here is a list of key points to note (not exhaustive) - Endowment plans have a guaranteed return. ILPs do not - Endowment plans will usually have a fixed maturity . ILPs do not . The exception would be perpetual endowments which have no end dates, but even those will have a guaranteed surrender value that increases over time - Endowment plans will give an additional return based on the performance of the fund (comprised of policy holder monies pooled together, and invested). Each time a bonus is declared from this fund, it is vested and becomes guaranteed. The fund is also managed by the insurer. So your policy guarantee will increase over time. ILPs have none of these, the fund choice is usually on the policy holder, and there is no guaranteed return from a fund, nor any form of vesting - Endowment policies do require you to commit premium for the whole duration . ILPs can have a premium holiday whereby the premiums can be paused, but the plan continues to run - ILPs can have riders added that will pay out a lump sum upon CI or death, etc. Endowments can have riders added that will waive the premium upon CI or death, etc, but there will be no payout. Any consideration for getting such plans should be done only have you have sorted out your basic insurance (medical, CI, death/TPD) and establish an emergency fund.

SG Budget Babe

Family

Retirement

You can write a will as long as you are above 21. Unfortunately, most people will not have written one yet. Once you have assets, you should ensure that in the event of your demise, they are distributed the way you want them. If you didn't write one, you die intestate and the Intestate Succession Act takes over, distributing your assets according to the 9 rules (and the last rule, if reached, means your assets goes to the government...do you really want that happening?) The sole exception is if you are of Islamic faith, then my understanding is that different rules apply (I am not trained in this area. Even more reason for you to have a will to make sure your beneficiaries get what is intended by you, not the state) Additionally, to start to distribute the assets, you'll need to apply to the court for a Grant of the Letters of Administration if there's no will, or a Grant of Probate if there is a will. Guess which takes longer? Now, even with a will it doesn't mean things will go smoothly. I've seen complex cases when it comes to estate accounts and in-fighting within the beneficiaries...and that's with a will in place. The distribution of assets dragged for 3 years . Imagine if there wasn't any. It would be far worse. Beyond just having a will, the Lasting Power of Attorney is equally important, it is basically the instruction manual for someone (donee) in the event that you are alive, but unable to manage your affairs any more. And the Advanced Medical Directive is also another factor for consideration.

MSIG TravelEasy

Insurance

Hi Hamzah, You would have to look at MSIG Travel Easy Pre-ex, not the original Travel Easy plan. Please note that you'll be subject to a few questions when you apply to ensure that you do indeed qualify for the plan. The actual policy wording as follows: The insured person must meet all the following conditions to be eligible for TravelEasy Pre-Ex cover: 1. The insured person is following his treating doctor's advice for all his pre-existing medical conditions. This includes not refusing or delaying any monitoring, medical appointment, medical test, medication, treatment or surgery. 2. The insured person does not have any medical condition or symptom which he has not consulted a doctor for or for which he is waiting for medical test, medical result, diagnosis, treatment or surgery. 3. In the last 12 months, the insured person has not had any pre-existing medical condition which has required them to: - Receive treatment at a hospital's Accident and Emergency Department more than once; - Stay in a hospital as an inpatient for more than three days in a row; and - Stay in a hospital as an inpatient for more than once.

Investments

Stocks Discussion

Stocks

Hi Kelly, A number of reason combine to form a lethal cocktail, namely - Listing fees - Very high compared to other exchanges, in the region of $100K minimum from what I heard - Brokerage fee - SGX has clearing and trading fees, other exchanges seem to be lower - Penny stock crash - This sullied the reputation of the exchange - Focus - Singaporeans tend to back stable dividend stocks, not fanciful high-tech ones. If Tencent listed here, it probably would not have had explosive growth I'm sure there are other factors too. SGX has known this for a while now and their focus has shifted to the derivatives market, which is their fastest growing segment. Well, at least shares are in lots of 100 now, if not it would be worse. Can you imagine trying to buy 1 lot (1000) of DBS or Jardine? That'll set a number of people back quite a fair bit.

CPF

Hi Martin, All OA monies will earn 2.5%, with the first $20K earning 3.5% (but the 1% is credited to your SA). You cannot deposit more than $37740 into your CPF. This amount is known as the annual limit. (This excludes SA/RA specific RSTU) This $37740 will be allocated to your 3 accounts according to your age group. In the event that MA and SA are full, the MA contribution will spill over to OA, so it does make OA grow faster.

Insurance

Hi Kuri, Yes, it's important to have your own personal coverage. Your company policies are probably part of a group policy. Hence, the ownership of the policy lies with your company and not you. Should you change jobs or retire, you will lose that coverage. Also, your company can choose to change the insurer and you might end up with a different level of coverage than what you have been used to. Hence, get your own coverage, especially for medical, critical illness and death. (How much coverage will depend on your individual situation) That way, you can have peace of mind kowing that you are covered regardless of which company you may work for in your lifetime. When claiming, it would be better to claim on your company first, before claiming on your personal insurance when it comes to medical. This way, your personal insurer won't have excessive claims which may cause an increase in premiums later on. For other types of coverage, you are allowed to claim on both company and personal.

Property

HDB BTO

Hi Vivian, You won't be able to. You'll have to sell off your private property and wait 30 months prior to applying for a BTO. The official word from HDB is as follows: For a new flat application, all the listed owners and essential occupiers must not own, dispose, or have an estate or interest in any other local or overseas property: - Within 30 months before the date of the new flat application, and up to the date of taking possession of the new flat You'll probably need to dispose a property, and move in with your parents or rent for a while before applying for a BTO
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