Enrich your retirement life with SRS Tax Savings Retirement Scheme in Singapore

How much tax savings can I enjoy?

SRS tax savings retirement scheme

Welcome to SRS

- Are you worried about your retirement finances? Do you think that you will have enough money to cover your costs when you retire? If so, then it is time that you start thinking about ways to make sure that happens.

- If you are 18 years old or older, you may be eligible to join the Singapore Retirement Saver Scheme (SRS). This is a tax saving program that can also serve as future retirement need by investing in various instruments including government securities.

Who is eligible for SRS Tax saving retirement plan

Tax saving investments singapore

You are a Singaporean, Permanent Resident (PR) or foreigner

Eligible for retirement scheme in singapore

At least 18 years old and not an undischarged bankrupt

Have no existing or pending SRS account with another bank

Have no existing/ pending SRS Account with another bank

Singaporean Permanent Resident, PR or Foreigner:

A Singaporean Permanent Resident (PR), or a foreigner who has been granted PR status, is eligible for the Senior Citizens' Savings Scheme (SRS). If you are a foreigner who has been living and working in Singapore for at least one year (or works here as an employee of a company with at least 10 employees), then you are eligible to join the Retirement Savings Scheme (SRS). The SRS helps pay for your retirement, by investing your money into government-issued securities or approved instruments. This means that not only will you get generous interest rates on your investment, but any capital gains or losses on these investments will also be excluded from your taxable income.

At least 18 years old and undischarged Bankrupt:

Yes, you can apply for SRS in Singapore as an adult. At least 18 years old and undischarged bankrupt are eligible for tax saving program in Singapore. This means that you no longer have to worry about not having enough money to support yourself during your retirement years. With proper planning and guidance, you can make sure that your retirement is as comfortable and joyful as possible.

Benefits of SRS tax saving account in Singapore

Benefits of SRS singapore

There are many benefits to using a SRS tax saving account in Singapore. By investing the money in a SRS account, you can secure your future and reduce your tax burden.

Here are just a few of the key benefits:

  • You can save for retirement without incurring taxes on the gains made.

  • Your money is sheltered from inflation and market fluctuations, which means it will be worth more over time.

  • You may qualify for special investment incentives offered by your bank or fund provider, such as bonus schemes or reduced fees.

  • SRS accounts offer peace of mind when it comes to estate planning - you know that your investments will be preserved no matter what happens with the economy down the road only if done the right way.

Note: Withdrawals before applicable statutory retirement age is subject to 100% tax, plus 5% penalty. 50% tax concession only applies to withdrawals from the statutory retirement age.

Best SRS funds investment in Singapore

Maximize growth of your SRS by investing it. By doing so, you earn potentially higher interest, as your balance in the SRS account earns only 0.05% interest per annum. What’s more, you get to accumulate tax-free returns on your investments.

There are a number of different types of SRS funds that investors can choose from when it comes to investing in Singapore. However, before making any investments, it is important to do your research and decide which type of SRS fund will work best for you.

There are a number of ways of investing SRS in Singapore. Here are some of them:

  • Singapore Savings Bonds

  • Singapore Government Securities (SGS) or Singapore Savings Bonds

  • Fixed Deposit

  • Foreign Currency Fixed Deposit

  • Shares

  • Single Premium Insurance

  • Unit Trusts

Best SRS investment singapore

How Supplementary Retirement Scheme in Singapore Gets You Tax Savings

SRS account tax saving
  • 1.

    Contributions to SRS are eligible for tax relief (capped at a maximum of $15,300 per year for Singaporeans and Permanent Residents, and S$35,700 for foreigners);

  • 2.

    Investment returns are accumulated tax-free.

  • 3.

    Only 50% of the withdrawals from SRS are taxable at retirement.

If you withdraw money out of your SRS account before you reach the statutory retirement age, the whole withdrawal sum will be deemed taxable and a 5% penalty will apply.

The more you contribute, the more you save on taxes, up to maximum yearly contribution applicable to you. Of course you don't have to contribute the maximum amount. Ideally, you should set aside enough to drop you to a lower tax bracket.

Income Tax Calculator Singapore

How much tax savings can I enjoy?

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Who is eligible to open an SRS account?

All Singaporeans, Singapore Permanent Residents (SPRs) and foreigners who :
- Are at least 18 years old
- Are not undischarged bankrupts
- Are not of unsound mind

What is Supplementary Retirement Scheme?

The SRS is part of the Singapore government's multi-pronged strategy to address the financial needs of a greying population, which were highlighted in the Report of the Inter-Ministerial Committee (IMC) on the Ageing Population, released in November 1999.

The SRS complements the Central Provident Fund (CPF). CPF savings are meant to provide for housing and medical needs and for basic living needs after retirement. Unlike the CPF scheme, participation in SRS is voluntary. Participants can contribute a varying amount to SRS (subject to a cap) at their own discretion. The contributions may be used to purchase various investment instruments.

With the SRS, the government hopes to encourage Singaporeans to save more for their old age, by means of voluntary contributions to their SRS accounts. The SRS will be effective from 1st April 2001. It will be operated by the private sector.

The SRS offers attractive tax benefits. Contributions to SRS are eligible for tax relief, investment returns are accumulated tax-free (with the exception of Singapore dividends), and only 50% of the withdrawals from SRS are taxable at retirement.

Source: Ministry of Finance

If you would like to find out more about SRS Scheme you can log on to the Ministry of Finance Website http://www.mof.gov.sg/ or contact any of the 3 SRS operators.

How do I open a Supplementary Retirement Scheme Account (SRS)?

SRS Accounts are managed by three SRS operators. You can open an SRS account with one of these 3 SRS operators:

- DBS Group Holdings Ltd

- Overseas-Chinese Banking Corporation (OCBC) Ltd

- United Overseas Bank (UOB) Ltd

How do I make payment for a SRS purchase?

You will have to ensure that there are sufficient monies in your SRS account. We will request payment for the purchase from your SRS agent bank. You need not have to issue a cheque.

Do I get a cheque for the sales proceeds, after selling the units purchased through my SRS account?

No. All sale proceeds must be returned to the SRS account; the proceeds will be credited into your SRS account directly.