A method and system for service-aware parity placement in a storage system, including after receiving the service notification specifying a target SD: writing a RAID stripe to the persistent storage, where the parity block of the RAID stripe is stored on the target SD and none of the data blocks in the RAID stripe are stored on the target SD. The method further includes performing a modified garbage collection operation that includes identifying a live RAID stripe in the persistent storage, writing a new RAID stripe to a new location in the persistent storage, where the new RAID stripe includes a copy of at least a portion of data from the live RAID stripe and a parity block in the new RAID stripe is stored on the target SD, and issuing a removal notification when the modified garbage collection operation is completed.