What is Supplementary Retirement Scheme (SRS)
The Supplementary Retirement Scheme (SRS) is a voluntary scheme to encourage individuals to save for retirement, over and above their CPF savings. Contributions to SRS are eligible for tax relief.
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How SRS saves taxes
By contributing to your SRS account (up to your maximum yearly contributions), you can reduce your total taxable income by the same amount*
The maximum yearly SRS contributions as of 2016 (i.e. YA 2017) onwards is:
$15,300 - Singapore Citizens/ SPRs
$35,700 - Foreigners
Total annual income
SRS contributions
*For each Year of Assessment (YA), a personal income tax relief cap of $80,000 applies to the total amount of all tax reliefs claimed (including relief on SRS contributions).
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Taxable income
Personal tax reliefs
Without SRS
With SRS
Attached below is an illustration of the possible tax savings one can enjoy with contributions to his or her SRS account:
Invest your SRS
Your SRS balance grows at an interest of 0.05% p.a. Maximise this growth by investing your SRS funds to potentially higher returns. Moreover, investment returns are tax-free before withdrawal.
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Withdrawals of SRS funds
You can withdraw funds from your SRS account any time and in any amount. Each withdrawal is subjected to tax.
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Maximise your returns by withdrawing funds on or after the statutory retirement age (currently at 62) to enjoy penalty-free withdrawal at a tax concession of 50%. Additionally, spread your withdrawals over 10 years from the date of your first penalty-free withdrawal to decrease the amount subjected to tax.
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Assuming the total amount to be withdrawn in the SRS account is $400,000 and that there is no other sources of taxable income:
