As I am still young, I definitely choose blue chip stocks and high yield REITs over bonds. Blue chip stocks mainly for growth and high yield REITs for the dividends and potentially some capital gain.
I prefer CPF for now as the compounding in SRS means that eventually I still have to pay tax at a later time because I would amass a sum larger than the tax free withdrawal amount and with my current salary, the tax savings is not significant yet. With CPF, I can withdraw without worries about paying tax and the interest from the special account can be considered as a good dividend rate, though at the expense of liquidity which is similar to SRS. The main limitation with CPF is that the amount I can top up is lesser than SRS which limits my ability to fully maximise it for tax savings.
At my current age, I would prefer to hold off SRS to avoid having to pay large sums of tax when I withdraw it. I think I would only consider it when I’m in my mid-late 40s.
Which Stock is Your Retirement Pick?
Some Tigers said: “I’m counting on OCBC for my retirement."
There are different choices for Singaporeans.
Bank-retirement camp: Holding bank stocks long-term = steady happiness.
REIT camp: Relying on cash flow for retirement feels more secure.
It’s really about that feeling of “getting paid every year”: CICT, MIT, FLCT, MLT.
These can also be bought with CPF or through Endowus, making long-term holding even easier.
CPF balances can be used to buy Singapore stocks.
Endowus helps with tax savings and gives access to a wider variety of funds!
So, which is your retirement stock?
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