Self Employed Citizens (Why Contribute To SRS OVER CPF!)

I work as an adviser and also under the “Self employed” category.

If you are too, then you’d kind of understand the “missed” compulsory contributions by employer to CPF. Hence, our retirement planning has a bigger hole to fill.

To save more for your retirement, there is the SRS contribution and CPF contribution schemes available. While you “catch-up” on building retirement funds, you get tax relief when assessing next year.

CPFSA vs SRS contribution: what’s the difference?

CPFSA contribution is via RSTU (retirement sum topping up scheme).

Tax relief is up to $7,000.

SRS contribution on the other hand has tax relief to $15,300. An SRS account opened with DBS/OCBC/UOB.

In summary, this answers common questions you may also have.

As a self-employed, you could use both schemes if you are of a high income bracket to really bring down your chargeable income level.

This could save you taxes and help you catch up with those employed in building up retirement savings.

However, also do also note the max relief cap of $80,000 and that whatever you contribute now is FOR NEXT YEAR”S tax assessment.

Read more on CPFSA VS SRS for tax relief here

Two reasons for you to prioritise SRS contribution over CPF contributions

As a self-employed, you don’t have a forced contribution to CPF. Your income is entirely on CASH.

That is where your decision for retirement planning & tax savings come in. These are two reasons to prioritise contribution to SRS over CPF (either through RSTU or VC).

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