The Supplementary Retirement Scheme (SRS) is a voluntary scheme introduced by the Singapore government to encourage individuals to save for retirement. It offers attractive tax reliefs, making it an appealing option for people to save on taxes as well.
Instead of leaving your SRS funds idle (which earn a nominal interest rate of 0.05% p.a.), investing them can help you significantly grow your retirement nest egg.
One increasingly popular way to invest SRS monies is through robo-advisors. In this article, we’ll delve further into what SRS is, how to invest your funds, and compare three prominent robo-advisors in Singapore – Endowus, StashAway, and AutoWealth – to grow your monies.
More About SRS
SRS is a non-compulsory retirement scheme to encourage Singaporeans, Singapore Permanent Residents, and foreigners to save for their retirement.
Contributions are eligible for tax relief. The yearly maximum contribution for Singaporeans and Singapore Permanent Residents is $15,300 while for foreigners is $35,700.
Source: IRAS
You may make penalty-free withdrawals from your SRS account over 10 years starting from the date of your first withdrawal. Withdrawals do not attract the 5% penalty only if they take place on or after the statutory retirement age (currently at 63) that was prevailing at the time of your first SRS contribution.
While SRS offers a safe haven for your retirement funds, the low interest rate of 0.05% p.a. is insufficient to outpace inflation.
Read Also: Step By Step Guide To Opening Your Supplementary Retirement Scheme (SRS) Account
What Investors Can Invest In To Grow Their SRS Monies?
SRS funds can be invested in various financial instruments to achieve potentially higher returns. These include:
Singapore Government Securities: Investors have the option to buy Singapore Savings Bonds and other government securities through SRS.
Exchange-traded funds (ETFs): These allow you to diversify your investments across a range of assets, reducing risk.
Stocks and real estate investment trusts (REITs): Investing in individual stocks and REITs can offer higher returns, but it also comes with additional risks.
Insurance products: Certain insurance products like annuity plans can also be purchased using SRS funds.
Robo advisors: These are digital platforms that provide automated investment management services based on your risk profile and financial goals.
While various investment options are available to those using SRS, investing through robo advisors is a seamless way to grow money.
One attractive feature of investing your SRS monies with robo advisors is that they give you exposure to diversified, global funds that you would not easily access otherwise.
Robo Advisors: A Convenient Option For SRS Investments
Robo advisors have gained popularity in recent years with their low fees, user-friendly interfaces, and automated portfolio management.
Four prominent robo advisors in Singapore allow you to invest your SRS monies: Endowus, StashAway,AutoWealth and Syfe.
Here’s a quick comparison of the robo advisors:
Endowus
StashAway
AutoWealth
Syfe
Features
Offers cash management solutions and access to institutional-grade funds comprising global equities and fixed-income
Get access to general investing and thematic portfolios, on top of cash management solutions
Allows for investment in a range of portfolios consisting of bonds and equities
Offer a range of portfolios including Core Equity100, Income+, Cash+ Flexi (SGD)
Initial Minimum Investment
S$1,000
(no minimum for Cash Smart)
No minimum
S$3,000
No minimum
Fees
0.15% – 0.40% p.a.
0.15% – 0.80% p.a.
0.4% p.a. + US$18 p.a.
0.25%-0.65%
More Information
Click here for Endowus
Click here for StashAway
Click here for AutoWealthPromotion: Receive a $20 top-up into your account once you fund it with the minimum amount.
Promo code – DOLLARSANDSENSE
Click here for Syfe
Each robo-advisor has unique strengths and advantages. For example, Endowus offers a curated selection of institutional-grade funds, typically reserved for high-net-worth individuals and institutions.
Their investment philosophy centres around building diversified portfolios with low-cost, globally diversified funds from reputable asset managers such as PIMCO and Dimensional Fund Advisors.
Endowus also offers personalised advice from financial experts, making it a suitable choice for those who seek professional guidance alongside a robo-advisor’s convenience.
On the other hand, StashAway’s portfolios consist of globally diversified ETFs, spanning various asset classes such as equities and bonds. Its proprietary risk management technology, ERAA (Economic Regime-based Asset Allocation), dynamically adjusts the portfolio based on prevailing market conditions.
Read Also: Step-By-Step Guide To Opening An AutoWealth Account For New Singapore Investors
Secure Your Retirement With The Robo Advisors
Growing your SRS monies is a crucial step in securing your retirement goals. Robo advisors provide a convenient and accessible avenue to achieve this goal.
By carefully considering your investment objectives, risk tolerance, and the specific features of each robo advisor, you can make an informed decision and select the platform that best aligns with your needs.
Remember, it’s never too early or too late to start planning for retirement. Visit each of the robo advisors’ websites right away to explore the various SRS investment options. You can click on the links below to check out some special promotions that DollarsAndSense have with each of the robo-advisors.
Endowus
StashAway
AutoWealth (promotion: Receive a $20 top-up into your account once you fund it with the minimum amount. Promo code – DOLLARSANDSENSE)
Syfe
Top Image Credit: IRAS
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