SG Budget Babe
Supplementary Retirement Scheme (SRS)
Asked on 03 Dec 2019
How do I go about it? is it worth giving it a shot? any viable alternatives that I should consider instead?
Tons! In a nutshell, your SRS monies can be used for
Single Premium Retirement Policies
SG listed stocks/REITS/ETFs
SG Listed bonds
Just don't leave it in the bank doing nothing.
There is no right or wrong answer as to what to deploy your SRS monies in. So I would say that you should take some time to understand all asset classes and what their pros and cons are, before you dive in. Remember that SRS monies are meant for retirement, so you should plan with that in mind.
If it were me, I'd invest in slightly safer instruments. SRS, along with CPF, will form the backbone of my retirement and I'd like just a little more certainity with what I'm going to get. I'll be sharing more during an SRS seminar next week, link's in my profile.
04 Dec 2019
I like iFast a lot because they are a platform which earns fees from various sources. However, one downside is they are a financial platform which means during downturn, people may pull out their funds and iFast may earn lesser.
If you're thinking of investing for the long term, you should consider visiting iFast corporate websites and seeing their latest financial results! During the next crisis, you could also load up VICOM too!
Most importantly, if figuring out how to analyse a company is too time consuming, you could follow Isabel's approach of looking at some stable and attractive policies.
As what many people have pointed out, you can invest in
SGX listed securities
Roboadvisors ( Moneyowl, Endowus, Stashaway)
As a young working adult, with a small contribution on SRS, I dont like any investment products that generate dividends because it is difficult to invest the dividends cost and time efficiently. I was invested in STI ETF because I like diversification, but the dividends of a few hundred dollars are just costly to reinvest
I have recently shifted my investments on SRS to Endowus 100-0 portfolio. You can read more about why Endowus is a good choice here.
SRS helps you to
Reduce income taxes
Help plan saving and investments for longer-term retirement plans
There are lots of SRS options:-
stocks, REITS, ETFs in singapore
bonds in singapore, including singapore saving bonds
unit trusts, funds
some type of insurance policies
Since SRS is for the long term, i believe a great way to hold for long term for best returns is holding ETF, Reits and stocks.
They need a long time frame so you are good for it with SRS (since you have to hold till retirement for reducing your income tax)
I think ETF is an option you can consider, and specifically STI ETF.
STI ETF has no rights issue, and it picks the best blue chip stocks for you. So I think it can be a good consideration.
SRS Investing can be used for many Invesmtents such as
Using for Shares
Invsurance Investment products
Fixed Deposits etc
That said, my recommendation is to use SRS for shares purchase because SRS is a long term finance instrument where one withdraws at about teh age of 62. This means one should invest with a long term horizon with SRS money
That said invest in shares which has good business fundmanetals. Don't use our SRS money for short term trading
It depends on your risk appetite - there are a whole suit of products that you can invest in.
Personally, I treat SRS as "savings" more than "investments" hence I'm going for safe assets. As the long term rates are low currently short term endownment policies are a good option - most are offering 2.0-2.5% for 3 years currently. The bad side is you need to evaluate your options again 3 years later.
Before you start investing, it will be best to understand your objective. Here are some questions to help you:
What is your capital?
How will you want to invest your capital? E.g. lump sum or an amount on a regular basis
How long will you want to stay invested? E.g. 10 years
What is your risk appetite? E.g. How do you feel about short-term volatility?
What is your objective for investing?
For SRS investment, you may consider to have a balanced portfolio (depending on your risk appetite) of asia equity and bonds. Thereafter, rebalance and fine tune the portfolio from time to time to ensure that you are not overexposed to unnecessary risk.
Alternatively, you may choose to put your money in to a life annuity - guaranteed stream of income for retirement purpose.
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