Monday, 26 December 2016

Time to contribute $$ to CPF for tax relief again

It's the time of the year again - time to contribute money to your CPF or your parents' CPF accounts if you are looking for some income tax rebate. Better do it soon too, because there are less than 5 working days to new year (and to qualify)!
Another way of getting the tax rebate is to do some good by donating back to society. :)

Here is the IRAS link to check out the top-up relief limits: CPF-Cash-Top-up-Relief

(For self is $7000 and for family members is $7000 too. So the maximum rebate amount is $14000.)

And not forgetting, there is also the elusive Supplementary Retirement Scheme (SRS) which you could contribute to...
What is SRS?
More on SRS contributions

If you are lazy to analyse for yourself on whether you should put your money into the SA or SRS, here is a good article that can help to shed some light.

It might be a good alternative to annuity or perhaps even life insurance (if you are already quite aged and need to pay very high premiums).

Note that SRS member can withdraw up to $40,000 per year from his SRS account tax-free from age 62 onwards. Early withdrawal would result in penalty. (If you make a withdrawal before the retirement age of 62, 100% of the sum withdrawn will be subject to income tax. You will also face a 5% penalty for premature withdrawal. - source POSB website)

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IMO, if you have no idea on how to invest your SRS money for better returns (than your cpf money) then there is no point in putting the money in the bank's SRS account. The only good thing you can reap out of it is the tax benefit, which would appeal more to the higher earners with spare cash to park somewhere.

For me, I prefer liquidity (and I am terrified of penalty!). So I chose to put the money in my parent's RA since the money can be activated as monthly payout anytime.

Happy New Year! (I think my next post would be in 2017.)

Friday, 16 December 2016

Past tense, Present tense, Future tense of stock market

Past tense = dividends, P/E
Present tense = current share price, NAV, news
Future tense = prospect / business analysis, projected earning, speculation

Some people like to make decision looking at the rearview mirror, some people like to make decision based on trend and gut feel, some people like to analyse and try to foresee things.

Which describes you?

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My stocks portfolio adventure in 2016:

- Earned an ok dividend of 4.3% by year end
- My worst paper loss this year was -29% in January
- Rode through the boring market period and terrible paper loss by not capitulating and just taking dividends as panadol
- Did some diversification of portfolio as it was over-concentrated in certain equities
- Paper loss (current) is about double the amount of absolute $ of my dividends gained


Looking to do some rebalancing of my portfolio to welcome 2017.
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