A conversation with a reader:
Hi AK,
As i browse through your blog, I realized that I do have another question. I am wondering if you would recommend individuals to open a SRS account to have tax relief first or to top up and ensure our CPF has met the mim sum first? Which option would be a long term wiser strategy to go for?
Regards,
C
My reply:
Hi C,
The CPF is always my first preference because it earns relatively attractive risk free returns of 2.5% to 5.0% per annum. For MS-Top Ups of up to $7K a year to the CPF-SA, we will enjoy income tax relief too. The downside is the minimum lock up period to age 55.
The SRS is called "Supplementary" for a good reason. If our income is higher and we would like to enjoy more income tax relief, the SRS is a good ......
