Responsible working adults do things like tax planning ahead of time. Naturally, I waited until the absolute last day to do it… the literal last hour, actually, in between drinks at a New Year party last week wondering what to do.
Earlier in the day on New Year’s Eve, I pulled the trigger and transferred the maximum amount I could to my Supplementary Retirement Scheme as the deadline was 7PM that day. Later at night, in between shots of whiskey 15 minutes before 2021, I decided that I was not going to contribute to my CPF Special Account after all.
Why I contributed to SRS
With the current maximum contribution cap of $15,300 a year, SRS can provide tax relief for a bit of money, and still provides flexibility of withdrawals should I need it in future.
I think it fits with my plan to FIRE when I’m in my mid-forties – 5% penalty in 10-15 years’ isn’t too bad if you are saving more than 5% of tax right now....