SRS – What is it and who’s it for? 

The Singapore government established the Supplementary Retirement Scheme (SRS) as an initiative to help the greying population save more for their retirement.

It is a voluntary scheme and unlike the Central Provident Fund (CPF) scheme, the SRS is open to Singaporeans, Permanent Residents, and Foreigners.    

It can serve as an additional retirement planning tool to save more for retirement and at the same time enjoy the following:   

• Tax relief   

• The capacity to choose where you’d like to invest your SRS contributions   

• Potential 50% tax reduction on withdrawals

Tax relief   

All contributions to your SRS account get dollar-for-dollar tax relief. The annual contribution cap is currently: 

SRS contributions must be made by 31 December each year in order to qualify for SRS tax relief in the following Year of Assessment. It is recommended that you check with your SRS bank operator (DBS/POSB, OCBC or UOB) about the cut-off date for monthly SRS contributions. 

Investing your SRS contributions through SRS approved funds  

Optimise your SRS contributions by investing them in SRS-approved funds. Investment funds present an attractive option for retirement planning or any other future financial goals you may have and offer the potential for greater returns and a certain level of security. Moreover, any investment returns obtained in your SRS remain tax-free until you decide to withdraw. This enables you to capitalise on the power of compounding interest by reinvesting your returns.

Withdrawing your SRS funds  

SRS serves as a long-term investment scheme with specific withdrawal considerations:

• When you start to withdraw funds after reaching the Statutory Retirement Age (currently 63), only 50% of the withdrawn amount will be subject to taxation. Please be aware that the taxable portion of your withdrawal will be added to your overall taxable income and taxed according to the prevailing rates.

• You have a period of up to 10 years from the date of your first withdrawal to complete your withdrawals.

• For foreign SRS account holders, a one-time complete withdrawal is possible if the account has been maintained for at least 10 years from the date of the initial contribution. In this case, only 50% of the lump sum will be subject to taxation at prevailing rates.

Plan for your retirement and future financial goals with the flexibility and tax advantages that SRS offers.

To find out more about SRS Contact us Today

Source:

• IRAS: SRS contributions and tax relief

• IRAS: Tax on SRS withdrawals

Important information

 This article is intended for general circulation and for information purposes only. It may not be published, circulated, reproduced or distributed in whole or part to any other person without prior consent of Synergy Wealth. This article should not be construed as an offer, solicitation of an offer, or a recommendation to transact in any products mentioned herein. The information does not take into account the specific investment objectives, financial situation or particular needs of any person. Advice should be sought from a licensed wealth manager regarding the suitability of the investment product before making a commitment to purchase the investment product. Whilst we have taken all reasonable care to ensure that the information contained in this article is not untrue or misleading at the time of publication, we cannot guarantee its accuracy or completeness. Any opinion or estimate contained in this article is subject to change without notice. The above article may contain data obtained from third parties and as such we cannot guarantee the accuracy of this data. Synergy Wealth, representing Synergy Financial Advisers Ltd licensed by the Monetary Authority of Singapore, FA Licence No. FA100050.