Smart Money Moves To Save You Thousands Of Dollars Before The Year Ends | Money Mind | Singapore

Key Concepts

• Supplementary Retirement Scheme (SRS)
• Central Provident Fund (CPF)
• Tax Relief
• Government Credits (e.g., CDC vouchers, Life SG credits, Active SG credits)
• Dynamic Pricing (in travel)
• Subscription Audit

Smart Money Moves Before Year-End

This video outlines several strategic financial actions Singapore residents can take before the end of the year to save money and potentially increase their wealth. These moves are presented as ways to avoid losing money unintentionally due to inaction.

1. Supplementary Retirement Scheme (SRS)

• Mechanism: Contributions to SRS reduce taxable income dollar-for-dollar.
• Example: A Singapore resident with a taxable income of $110,000 can save $1,760 in taxes by topping up the maximum SRS contribution of $15,300. This represents a significant saving of almost $2,000.
• Deadline: December 31st. Missing this deadline means paying the full tax amount.
• Contribution Limits:
  • Singapore Citizens/PRs: Up to $15,300
  • Foreigners: Up to $35,700
• Investment Growth: While SRS contributions offer tax savings, the SRS account itself earns a low interest rate of 0.05%. Experts recommend investing the SRS funds for growth.
• Investment Projection: Investing the maximum $15,300 in an equity-focused account earning 8% could result in approximately $700,000 in 20 years. This is particularly beneficial for individuals planning for retirement, such as a 42-year-old aiming to retire at 62.

2. Central Provident Fund (CPF) Top-Ups

• Benefit: CPF top-ups can lower taxable income and provide safe, risk-free returns.
• Tax Relief: Up to $16,000 in tax relief can be obtained by topping up one's own and loved ones' CPF accounts.
• Deadline: All top-ups must be completed before December 31st to be offset against income within the same calendar year. Missing the deadline prevents claiming tax relief in the following year.
• Caution: It is advisable not to wait until the last minute to make these top-ups.
• Relief Cap: There is an $80,000 relief cap. Once this cap is reached, further top-ups will not reduce the tax bill.
• Strategic Top-Ups:
  • Utilize the IRAS calculator to determine your income tax bracket and the amount needed to move down one or more brackets.
  • Calculate the minimum top-up required to reach the next lower tax bracket. For example, if a $4,000 CPF top-up is sufficient to drop into a lower tax tier, consider if topping up an additional $4,000 (which provides no further tax relief) is beneficial. The advice is to "do just enough to drop into the next tax bracket."

3. Unused Government Credits

• Issue: Many Singaporeans overlook or forget to use government credits, which can expire at the end of the year. Unused credits represent lost "free money."
• Examples: CDC vouchers, Life SG credits, Active SG credits. These can amount to several hundred dollars.
• Action: Claim and use these credits before their expiry date.
• Ease of Use: Using a few hundred dollars in Singapore is generally easy, for instance, through supermarket purchases or hawker takeaways, and can be consumed within a month.
• Checking Eligibility: All eligible credits can be viewed on the Life SG app by logging in with Sync Pass.
• Types of Credits:
  • Large family Life SG credits (for families with three or more children).
  • Child Life SG credits.
  • NS credits (for current NSF, NSmen, and past NSmen).
• Expiry Dates: Be aware that different credits have different expiry dates, with some expiring at year-end. Prioritize using those with imminent expiry.
• Assistance: Help family members and friends by reminding them of their unused credits.

4. Holiday Planning for 2026

• Strategy: Book flights and hotels 6 to 9 months before travel dates, and begin planning 9 to 12 months in advance.
• Savings Potential: This early planning can lead to savings of up to 50% on bookings.
• Consequences of Delay: Waiting too long results in paying more and having limited choices due to dynamic pricing.
• Dynamic Pricing: Hotels and airlines use dynamic pricing, where prices increase with demand. This can lead to fewer direct flight options and inconvenient flight timings.

5. Subscription Audit

• Problem: Many subscriptions (streaming services, app renewals) auto-renew around the year-end, leading to unnoticed budget drains.
• Digital Age Impact: The ease of subscribing in the digital age often leads to accumulating services that are not fully utilized due to time constraints.
• Mental Load: Having too many subscriptions can create a "mental load" of invisible costs that impact finances at month-end or year-end.
• Action: Conduct a quick year-end audit to identify and cancel unnecessary subscriptions.
• Redirect Savings: Redirect the money saved from cancelled subscriptions into SRS or a travel fund.

Conclusion

The video emphasizes that proactive financial management before the year ends can prevent unintentional financial losses and create opportunities for savings and growth. Key actions include leveraging tax relief through SRS and CPF top-ups, utilizing all available government credits, planning travel well in advance, and decluttering digital expenses by auditing subscriptions. These "smart money moves" aim to help individuals start the next year with a leaner and more financially sound position.