- All annualised returns have factored in stock splits and dividends.
- The SPDR S&P 500 ETF (S27.SI) is one of the better options for domestic listings. Although it has a low trading volume, it had a 8.05% annualised return over the last 5 years (Aug 2014 - Aug 2019).
- The popular SPDR Straits Times Index ETF (ES3.SI) performed poorly in comparison, growing at an annualised rate of 1.81% per year over the same period.
- You can also take a look at the returns of other ETFs that I've been tracking.
- The VOO annualised rate did not factored in the 30% US dividend withholding taxes. With VOO's dividends usually at 2%, the annualised rate might drop by 0.6% per year. Even factoring this in, the SRS is still a worse option.
- Some might argue that the benefit from SRS can be further increased, if doing regular withdrawals over the 10-year draw-down period instead of a lump-sum withdrawal. This is because each withdrawal will hit a lower income tax bracket. However, if you plan to contribute to the SRS every year for 10 years or more, you will be withdrawing at least a full year's contribution every year anyway.
- Treatment for SRS withdrawal: If withdrawing before the retirement year, 100% of the withdrawn amount will be subject to income tax, and 5% of the withdrawn amount will be forfeited. If withdrawing on or after the retirement year, 50% of the withdrawn amount will be taxed.