Should You TOP UP To SRS, CPFSA Or Medisave For Tax Relief? | Financial Planning Tips

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If you are thinking of topping up into CPFSA, medisave or SRS for tax relief, this video is for you. SA and medisave contribution has a max of $8,000 in tax relief and SRS contribution has a max of $15,300 in tax relief. I'd show you what I chosen and my SRS portfolio performance!
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0:00 Introduction
1:10 Telegram question
2:10 Topping up to SA or medisave
3:55 Supplementary retirement scheme SRS
6:58 Josh Tan finance summit
7:53 My srs investment records
10:41 Conclusion
We do not make any recommendations on whether a security is a buy/sell as every investor has different investment goals and risk profiles. The presentation of ideas from Josh Tan and TheAstuteParent are strictly for education purposes. You are advised to perform independent research yourself or seek a qualified financial adviser. We will not be liable for any losses directly or indirectly from the material. Some of the referral links in the video summary are products and services personally used by Josh Tan and they may pay an affiliate commission or referral bonus.
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Josh holds a degree in Accounting from NTU. In 2016, he co-founded the financial education website TheAstuteParent to provide detailed insurance plan analysis and financial planning tips.
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[@joshconsultancy]

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[@FoodieWarrior]

I always top up my MA yearly. 😉

[@eeyonglin7889]

Hi Josh. Thanks for sharing. It is worth noting that your medisave top up will be refunded without interest if you hit annual contribution of $37740 and needless to say you will not enjoy any tax relief. so topping up of medisave is only for those who earn below annual income of $102k.

[@joshconsultancy]

Hi @eeyonglin7889 , thats the old scheme. Now medisave top up limit is separate from VC. Medisave top up is only capped by BHS. Hope it clarifies

[@eeyonglin7889]

Hi Josh, based on faq in cpf website it says that "Do remember to consider your mandatory CPF contributions which you will be receiving for the calendar year, before making voluntary top-ups. If the total mandatory CPF contributions and voluntary top-ups exceed the CPF Annual Limit in the calendar year, any excess voluntary top-ups will be refunded without interest in the following year." www.cpf.gov.sg/member/faq/growing-your-savings/top-up-your-cpf-accounts-to-build-your-savings/what-is-the-voluntary-top-up-limit-to-my-three-cpf-accounts So am i right to say that if your annual income is $102k, u r not eligible for top up to medisave since the amount will be refunded with interest and the amount u top up will not be eligible for tax relief?

[@HoneyMoneySG]

Great sharing Josh, though I will prefer the CPF method first!

[@joshconsultancy]

Hey Chris! No probs. Ready for your big one? =)

[@Ben-gp5ty]

More interested how you get so much relief for life insurance

[@joshconsultancy]

That’s cpf relief. You also have if you’re in employment

[@lisacheng8592]

如果主播可以加华文字幕就太棒了 谢谢

[@Laughmao]

Hello Josh! May I know how does how does Providend fund/Life Insurance under Reliefs work? Thanks!

[@joshconsultancy]

Its CPF contribution - Im self employed. Employed will be your own portion of the contribution from pay

[@MrBoontatt1982]

Hi Josh, my understanding for employee like me the max tax reliefs for provided fund/Life Insurance is about 20,400. How will you get 36,400 for self employed? Is there anything I never claim in year 23.

[@stella5600]

Thanks for information. Which trading platform are you using to invest using SRS considering long term investment and platform's fee?

[@joshconsultancy]

Local stockbrokerage. I’m using LimTan If you’d like a referral drop me an email an [e-mail] , I’d get the bonus signup for both

[@stella5600]

@@joshconsultancy it is to consider safety for long term investment?

[@Longtermalwayswins]

Thanks for sharing Josh. For srs i understand back then there were no options to invest srs into s&p500 etf funds. If u had invested in that instead, would it likely improve your srs gains?

[@joshconsultancy]

No probs. Cant see it as that way my friend... An even better option would have been to keep the SRS as cash and put into Bitcoin isnt it? 😅 We cannot control returns... Investing is into what you know and understand well Investing is into what you believe as good value None of the principles are regarding past returns which is a dangerous lead Hope it answers well =)

[@Longtermalwayswins]

thanks!@@joshconsultancy

[@byng138]

Invest in equities like SPH a defensive stock & noble , how ah ?

[@joshconsultancy]

Stock investing need to track business quarterly results to understand if need to exit 👌🏻🙏

[@weehong1968]

Josh, question if my wife has reach ERS for her RA, can i still top up for her MA for tax relief? , for this case my wife MA is only 40K. thanks in advance .

[@joshconsultancy]

I believe so provided she does not have more than $4k/Year income. Double check w iras k

[@tonywee4883]

For those above 55 and still employed, would the $8k medisave top up qualify for tax relief if they continue to have CPF Contribution through their employment during the year and can easily meet the yearly medisave increase cap.

[@joshconsultancy]

Yes can. Medisave top up subjected to CAP of $68,500 (basic healthcare sum).

[@CL-it3zy]

71k next year in 2024 😢

[@applered91]

how can i use my SRS To buy SGD stock?

[@joshconsultancy]

Use a traditional broker. If need a referral email me @ [e-mail]

[@edmundchan6601]

Hello Josh! For self-employed, will I get tax relief if I do voluntary CPF contributions to all 3 accounts? Thanks for the awesome content!

[@joshconsultancy]

Thank you for the high praise Edmund. Yes I believe so. That’s why I topped up also. Do always double check w cpf board

[@stylerho6278]

For those between 55 to 64, I am wondering if this group should still top-up their CPF OA and SRS assuming they have more than S$250K in each account. They also have already achieved the FRS scheme…

[@joshconsultancy]

Top up SRS is for tax relief if still working k Top up OA no relief k do note. Even top up to RA, no relief when there is FRS

[@stylerho6278]

@@joshconsultancyif SRS keeps growing, say S$400K to S$500K, I thought the withdrawal tax will be quite high?

[@SoloMetal]

I have a question. Wouldn’t it be more worth to pay the tax with cash rather than through many channels that you have shared to claim for tax reliefs then at the end of the day one still need to pay the tax albeit little less?

[@joshconsultancy]

I understand the question. Simple answer is withdraw out srs only when no income in retirement. Then no need to pay tax.

[@CL-it3zy]

Even if u withdraw after retirement age and no longer working, it's still considered taxable income if more than 20k is withdrawn because the first 20k withdrawn has no tax. So let's say withdraw 100k at 70 years old. 50% of 100k which is 50k is taxable....of that, first 20k no tax but rest of 30k will be subjected to the tax rates as of that year it was withdrawn.

[@SoloMetal]

Josh I see you have a donations of $10k deduction tax relief. Assuming a 3x tax deduction, one would need to donate $3k? Am I missing anything?

[@joshconsultancy]

It’s 2.5x. Donation portioned to me is $4k. I’ve this previous sharing on my commitment to help disadavantaged student via josh tan bursary. Gave the rest of the tax donation deduction to my wife :) kzbin.info/www/bejne/hKvMXqJpjtx_hs0si=a8DBvpgIqNgpwXrp

[@KaiChen]

Can self employed do vcma and get the $8,000 tax relief? If yes how do we do it? 🙏🏻

[@joshconsultancy]

Yes can - Log into cPF - ecashier - my request - contribute to my MA. All the best

[@KaiChen]

I did that for some time but seems like the amount top up to MA is not reflected in the retirement dashboard under the tax relief section. Only if I do a cash top up to SA then it will be reflected there 😢 not sure why 🤷🏻‍♂️

[@zhenxiong5389]

you donate a lot. Great man!

[@joshconsultancy]

Lets always try to help more =)

[@Zenus21]

He is my learning example, than the agent that wears 60k outfit and teaches others to use others people money to buy stupid things. Stay humble

[@MrDeedeeck]

Hmmm if I going to buy house, isn’t it a no brainer to top up 8k to OA which I can funnel to my downpayment and reduce tax for next year also?

[@tansongpor7026]

I doubt you get tax relief for OA cash topup

[@joshconsultancy]

If employee, Only SA top up can get tax relief.

[@draxuan]

You cannot do a direct top up to your OA. You can only either top up your SA via RSTU, top up your MA via VCMA or top up 3 accounts according to your age band via VC3A. However, if you already have used your OA for housing, e.g. downpayment or for mortgage, you can do Voluntary Housing Refund (VHR) to your OA using cash to reduce the principal and AI for housing.

[@lalajdhfbdj]

For srs top ups, wouldn't there be a certain income level where it will be feasible to just top up for the tax relief as even after 5% penalty. Assuming withdrawal is not too much each year, over all there will still be savings?

[@joshconsultancy]

The math part doesn’t work. What’s withdrawn is 100% taxable and adds to income bringing the person even higher

[@dovetofree]

Try not to withdraw srs before the eligibility age. Once you withdraw, you will be penalised not only the 5% but you won't be able to contribute srs in future

[@joshconsultancy]

You're right. Definitely as a super last resort

[@CL-it3zy]

Wow this is news to me. Once withdraw (regardless of amount withdrawn) can't contribute in future?? Are you able to link the iras website that touch on this. I always thought of srs as emergency fund.

[@dovetofree]

@CL-it3zy you can always call them to check

[@edwin9395]

just in time for the year end tax relief !

[@joshconsultancy]

Yes!

[@see8161]

My husband is self employed. If his medisave already hit BHS, can he still top up to medisave to get tax relief?

[@joshconsultancy]

Cannot unfortunately. Max is BHS

[@yapjunwei_]

QCR $8k is because you have 2 child? How many years can this QCR be for? Thank you.

[@joshconsultancy]

Yes $4000 each. Until child 21 i think

[@jironghuang4895]

I suspect you are heavily in REITs for your srs. Which is clobbered. For my household SRS funds, we deploy in SSB. SRS + tax gains already 7+% 10 year xirr

[@joshconsultancy]

Yes Ive been buying amidst the distress there =)

[@jironghuang4895]

When ssb rates come down, I have to rethink the strategy for my SRS funds haha.

[@joshconsultancy]

@@jironghuang4895 i posted something in telegram group, cya inside

[@jironghuang4895]

@@joshconsultancy tks will check out

[@Longtermalwayswins]

@@jironghuang4895putting money in ssb is never a good thing because you lose out on the 5-7% risk premium compared to being in equities and securities over the long run. However, case by case, some people might not have that long runway or risk appetite for volatility

[@ivanseah84]

How does one increase the item called 'Provident Fund / Life Insurance' YoA presented in 0:39 beyond $20,400?

[@joshconsultancy]

I’m self employed. All VC is tax relief. Under employment the 20% is counted which is capped around $20,400. Hope it clarifies

[@ivanseah84]

@@joshconsultancy certainly does and thanks for the prompt response!

[@kenchin28]

Hey Josh, appreciate the sharing. What is the strategy behind going for SG equities in SRS against SPDR S&P 500 ETF? I hope to understand your thought process since S&P 10 year avg ~10%.

[@joshconsultancy]

Thank you =) How market trends for the next 10y moving forward no one knows BUT Good investing is about understand the price you pay for the thing you invest in. That is MAIN thing you can control as an investor. Good investing is not about choosing the one with best 10y average. Usually this gets you something who's price is already inflated. Once youve understood this, you'd understand who are investors are who likes the popular opinion...

[@Longtermalwayswins]

I put srs funds in endowus for s&p500 funds. The returns over a 10-20yr period will be safer. Inflation and div adjusted realistically would be 7-8% yoy

[@ahsaw1394]

Hi Josh, thanks for the video. My CFP contribution is more than $5k and I cannot qualify for Provident Fund/Life Insurance relief. Your Provident Fund/Life Insurance relief is >$30k. How did you achieve that?

[@joshconsultancy]

I’m self employed. All voluntary contribution to cpf is tax deductible

[@ahsaw1394]

Understand. Thank you!

[@lowcolin]

Full dumb sum?😅

[@joshconsultancy]

Retirement Sum Caption error?