Maximising your SRS with an Endowment Plan

SRS (Supplementary Retirement Scheme) was once a household word when it was introduced and somehow now it has lost its pizazz. However, it is still a worthwhile consideration for your retirement and tax planning in Singapore

For people who are beginning to set aside money for their retirement plus tax planning and are not familiar with SRS, here're some examples:

SRS example in Singapore
                                              Another Example:
TM Retirement@63
In a nutshell , the things you need to know if you are utilising your money for SRS are:
  1. There will be annual savings in your income tax if you belong to the higher tax bracket.
  2. Your SRS contribution can be used to buy Insurance policies which appreciates with time & get you more for retirement.
  3. Upon withdrawal, only 50% is subject to tax & you can expect greater savings should you spread your withdrawals over a 10 years period.
  4. The interest rate on balances in the Supplementary Retirement Scheme (SRS) Account which are not invested is currently approximately hovering at 0.05% p.a. (POSB 2012)
  5. Moves you into lower tax bracket
  6. SRS contributions must be made by 31st December each year
  7. Singaporeans annual cap-$12,750, Foreigners annual cap-$29,750 (as they do not have CPF)
Singapore Tax Rates Table 2012
So that leads us to the reason why this post is written. Tokio Marine has launched a single premium endowment policy called TM Retirement@63 on 8 January 2015. It basically provides 10 annual Cash Benefits starting from policy anniversary at which the assured reaches age 63 on next birthday (which is also the payout date). Once the client receives all 10 annual payouts, the policy then terminates.
The nice thing about the plan is that it is also available in cash mode & is a guaranteed acceptance policy. As with most insurance, there is also some form of death benefit unlike other SRS investments which basically returns you whatever is left in the account at the point of death (which at times can mean a loss in capital).

If you are still wondering which insurance plan is suitable for SRS, then look no further and contact this FPC for more details about TM Retirement@63 !

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