SRS was a topic I used to blog about pretty often.
I have not been blogging about it as much since I have not been making contributions in recent years.
Reason is because I no longer pay income tax.
If we are still paying income tax, contributing to our SRS account makes sense to enjoy some tax relief.
Of course, we want to put our SRS money to work or we would get a very miserable interest rate.
For many years, I used the SRS money to buy plain vanilla endowment policies.
They were savings plan with some insurance thrown in.
In fact, I still have one or two of those with NTUC Income using SRS money.
In recent months, I also used the money to buy T-bills with yields being so much higher than a couple of years ago.
Dividends paid by my investments in stocks using SRS money are used for this purpose.
Yes, I also use SRS money to buy stocks of businesses which I think make good investments for income.
I have blogged about this before and shared what kind of stocks I would buy with SRS money.
Basically, the businesses must be good income generators with strong balance sheets; nothing which is likely to do rights issues.
The very practical reason is because we must have the excess funds in our SRS account to take part in rights issues.
This can be difficult to ensure.
I shared my SRS portfolio of stocks before but that is outdated by now.
See:
Win and win again with SRS.
I had SATS in the portfolio.
Of course, regular readers would know that I sold it shortly after it announced the decision to buy WFS.
SATS just didn’t have sufficient resources to do what they suggested.
They had to raise funds from shareholders.
It was something unexpected.
So, I took the opportunity to sell when there was a bounce in the stock price.
In place of SATS, there are ComfortDelgro and OCBC in my SRS investment portfolio now.
This is what the portfolio looks like now:
Based on the purchase prices, it is not difficult to guess that DBS and ST Engineering have been in the portfolio for some time now.
So, like what I did?
Paid less income tax and put the money to work to generate more tax free passive income?
We can certainly win and win again with SRS.
If AK can do it, so can you!
Reference:
How AK used his SRS money?