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PR Newswire
15-01-2013, 11:15 PM
If your marginal tax rate is high (>15%), it means you are earning good income and the key to your financial well being may lie in grooming your ability to save and invest, over a period of 15-20 years during your peak earning years. In this case SRS is not likely to form a large pot of your final reserve as you head into your sunset years.
If youar marginal tax rate is low, you get little benefit from the tax savings - just pay and have your capital on hand (either as cash or in the form of liquid investments) if you need it for some reason.
Still, some people find it hard to maintain savings discipline and SRS provides some sequesteration to make their savings plan "work". Others have said they treat SRS as very long term money and they can therefore "invest it differently" - whatever that means. I used to contribute for 3 years, but no longer do so as I find it better to pay the tax and hold the cash unencumbered.
If youar marginal tax rate is low, you get little benefit from the tax savings - just pay and have your capital on hand (either as cash or in the form of liquid investments) if you need it for some reason.
Still, some people find it hard to maintain savings discipline and SRS provides some sequesteration to make their savings plan "work". Others have said they treat SRS as very long term money and they can therefore "invest it differently" - whatever that means. I used to contribute for 3 years, but no longer do so as I find it better to pay the tax and hold the cash unencumbered.