Simple Ways to Maximise Your Savings This Year End
The art is not in making money, but in keeping it.
— Proverb
As we head to the end of 2022 and prepare for the upcoming year, we're here with some simple ways to help you maximize your savings, minimize your tax bill, and perhaps kickstart some new and exciting financial goals.
Maximise Your Retirement Contributions via SRS
The latest IRAS annual report showed that year-on-year tax collection had risen considerably compared to the previous pandemic-affected years. Personal income tax formed nearly one quarter of the total tax revenue collected, with an 11.6% year-on-year increase (see diagram below).
Collection of taxes is necessary for nation building and to fund various programs. We are also fortunate to benefit from one of the lowest tax jurisdictions in the world.
With the upcoming rise in GST from 7% to 8%, as well as the imposition of GST on all online purchases from the first dollar onwards in 2023, it will be difficult to reduce that exposure — unless you stop consuming goods and products altogether. However, there is a way to lessen your personal income tax if you are still in the workforce. Additionally, you can use this to save and invest for your retirement.
So don’t forget to deposit these savings (S$15,300 for Singaporeans and Singapore PRs, and S$35,700 for foreigners) into your SRS bank account before 31 Dec 2022. As for efficient ways of deploying and investing these savings, come and chat with us to find out more.
Take Advantage of Charitable Giving Tax Benefits
Charitable giving offers a way to financially support philanthropic causes all while enjoying tax benefits for your generosity.
Donations to the Community Chest or any approved Institution of a Public Character (IPC) enjoy tax deductions of 2.5 times the qualifying donation amount. These donations must be made before the year ends for the tax deduction to be included and processed in the following year’s tax reporting.
While cash donations are the most common, there are also other methods to give such as shares donation. Visit the IRAS website for more details.
Invest in The Next Generation:
Start a Million Dollar Builder Plan
Take advantage of the current depressed market prices to start an education or savings plan for the younger generation. Creating a systematic way to save and invest, we have developed a simple way to reach a million dollars within 25 to 35 years. This type of plan is great for those who wish to put something aside for their young children or grandchildren. It also works well for young adults who may be just starting out in the workforce.
The best part is that it doesn’t take much to kickstart this plan — the lowest option starts at an upfront contribution of $5,000, coupled with $600 in monthly savings.
Visit the Mustard Seed Million Dollar Builder page for more details.
