Supplementary Retirement Scheme (SRS)
Asked 3w ago
Which would you choose?
I presume you are talking about CPF SA topup via RSTU or CPF MA-VC. Both will reduce your taxable income and I would personally do that first as there is the added benefit of growing the monies at 4% which is very decent.
Yes, there is no way I can touch my MA monies, and my SA only becomes accessible after I set aside the FRS at 55, but by starting early, I can let compounding work in my favour, helping me to meet BHS and FRS faster. Should I need to continue to reduce my taxable income after maximizing my CPF top ups, I would then turn to SRS.
If you are savvy in investment, top up to SRS is fine.
If you are not savving in investment, top up to CPF is fine.
If you have too much tax to reduce, top up both is even better.
Its not a either or, but whether which suits you more.
Take care to ask for help for SRS investments too (stashaway at least) for passive investment.
While CPF SA top-ups yields at least 4% per annum and SRS contributions yield 0.04% per annum if just left untouched, I’m going with SRS contributions because 1) I’m itching to diversify into StashAway and Endowus and 2) if I really need my money before 62, I can subject myself to the 5% penalty and withdraw my SRS contributions
Top up CPF of yourself and family member(s) first. If you have sufficient cash leftover, you can then top up your SRS.