WELCOME TO SRS
Enrich your retirement life with SRS Tax Savings Retirement Scheme in Singapore
What is Supplementary Retirement Scheme (SRS)?
The Supplementary Retirement Scheme (SRS) is a voluntary savings program that enables individuals to save for retirement in addition to their Central Provident Fund (CPF) savings contributions.
In order to meet the financial needs of a graying population, the Singaporean government has adopted a multifaceted policy that includes encouraging Singaporeans to save more money for their golden years. It has been going on since 2001, and the private sector runs it.
Savings from the CPF are intended to cover basic living expenses after retirement as well as housing and medical costs. Unlike the CPF program, SRS participation is optional. Subject to a cap, SRS members may make varying contributions to SRS at their discretion. Different investment instruments may be purchased with the contributions.
Contributions to SRS are eligible for tax relief. Investment returns are tax-free before withdrawal and only 50% of the withdrawals from SRS are taxable at retirement.
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Make your SRS funds work harder for you
Find out how much you could earn if you invest your SRS funds.
Your expected accumulated SRS amount at age 62, based on your risk profile.
Based on an estimated return of 0.05% p.a. from holding 100% cash.
Based on an estimated return of 2.5% p.a from holding a diversified portfolio of 50% in Unit Trusts and 50% in insurance.
This is S$0 more than if you had held 100% in cash.
Based on an estimated return of 4.00% p.a from 100% investment in equities.
This is S$0 more than if you had held 100% in cash.
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Who is eligible to open for SRS Tax saving retirement plan Account?
Individuals who are Singapore Citizens, Singapore Permanent Residents (SPRs), or foreigners earning any form of income are eligible to make SRS contributions in the present year. You must be:
If you are least 18 years of age and not an undischarged bankrupt.
If you don't have a mental disorder and Capable of managing yourself and your affairs.
If you are an employee, your employer can contribute to your SRS account.
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.
If you are an employee, your employer can contribute to your SRS account:
Starting from 1 October 2008, your employer has the ability to make contributions to your SRS account on your behalf. These contributions are considered fully tax-deductible as staff costs for the employer. However, as part of your overall remuneration package, they will be subject to taxation and reported by your employer in your Form IR8A for the appropriate year. Once the SRS operator provides the necessary information, you will be eligible to claim tax relief for these contributions in the following year of assessment.
If this is your first time to participate in SRS, you can open an SRS account with one of these 3 SRS operators:
• Development Bank of Singapore (DBS) Ltd • Overseas-Chinese Banking Corporation (OCBC) Ltd • United Overseas Bank (UOB) Ltd Please note that you will not be permitted to open a new account if you previously had an SRS account which was closed after withdrawing all the monies due to the following reasons: 1. Having attained the prescribed retirement age. 2. or On medical grounds.
Note: You are only allowed to have one SRS account. Opening multiple SRS accounts with different operators is considered a violation and carries penalties.
Benefits of contributing to SRS tax saving account in Singapore
There are many benefits to using an 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:
● SRS relief subject to the $80,000 cap
Starting from the Year of Assessment 2018, the personal income tax relief cap of $80,000 is applicable to SRS contributions made on or after 1 Jan 2017.
It is essential for SRS members to be aware that once SRS contributions are made, they cannot be refunded. Therefore, it is advisable for SRS members to consider the overall personal income tax relief cap and assess whether they would benefit from the tax relief on their SRS contributions. Based on this evaluation, they can make an informed decision about their contributions.
● You can claim tax relief for contributions made to SRS.
For every dollar you contribute to your SRS account, an equivalent reduction will occur in your taxable income.
● Gains from investments will accumulate tax-free in SRS.
Except for Singapore dividends paid before 1 January 2008, where the payer company deducts or can deduct tax under section 44 of the Income Tax Act, these dividends will be subject to taxation at your individual tax rate.
●Tax will be payable only when you withdraw your savings from SRS
Upon retiring, when you withdraw your savings, only half of the amount withdrawn will be taxable. To meet your financial requirements, you have the option to spread out your withdrawals over a maximum period of 10 years. By choosing to spread out your withdrawals, you can generally achieve higher tax savings.
Note: 50% tax concession only applies to withdrawals from the statutory retirement age.
Latest Enhancement to the SRS
Recent SRS improvements include the following:
Enabling SRS withdrawals to be done as investments beginning on July 1, 2015
You have the flexibility to invest in various financial assets, including products offered by financial institutions other than your SRS operator. It is recommended that you reach out to your product providers to gather information about the specific SRS products they offer, as the decision to provide such products typically rests with them.
However, please note that direct property investments are not permitted. Additionally, there are specific conditions that apply to life insurance products for SRS.
Granting a tax exemption of up to $400,000 for SRS funds that are fully withdrawn due to a terminal illness or are declared removed upon death
SRS members who have not made any specified withdrawals prior to their current withdrawal (either due to deemed withdrawal upon death or full withdrawal on the grounds of terminal illness) will be eligible for the full tax exemption of $400,000 on their current withdrawal.
However, if the SRS member has made prior withdrawals, the exemption amount of $400,000 will be reduced by:
(i) $40,000 for each year from the first year of the prior specified withdrawal up until the year immediately preceding the year of the current withdrawal (inclusive of both years).
(ii) Additionally, the exemption amount will be further reduced by the lower value between $40,000 and the total amount of all prior specified withdrawals made in the year of the current withdrawal. This applies to the application of exempt amount for tax withheld or collected by SRS operators for actual withdrawals made by non-citizens.
Starting from 1 July 2016, if a non-citizen SRS member makes a full withdrawal due to being diagnosed with a terminal illness or disease, the amount subject to tax withholding or collection by the SRS operator will be reduced by the specific amount of withdrawal that is exempt from tax. It's important to note that withholding tax or tax collection by the SRS operator is applicable only to actual withdrawals made by non-citizens and does not extend to deemed withdrawals upon death.
Increasing the SRS contribution cap.
Starting from 1st January 2016, the yearly SRS contribution cap will rise to:
For Singaporeans and SPRs, the contribution cap amounts to $15,300 per year, while for foreigners, it is set at $35,700 annually.
You can contribute any desired amount to your SRS account, within the limits of your SRS contribution cap.
The specific cap is calculated by multiplying the applicable SRS contribution rate with an absolute income base. This allows you the flexibility to contribute based on your income and the prescribed contribution rate.
The SRS contribution rate for Singaporeans and Singapore Permanent Residents (SPRs) stands at 15%. However, the contribution rate for foreigners is set at 35% due to their ineligibility for tax relief from CPF contributions.
As a foreigner, it is necessary for you to provide a written declaration confirming your foreign status. This declaration is required annually so that the SRS operator can calculate your SRS contribution cap accurately.
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
Foreign Currency Fixed Deposit
Single Premium Insurance
How Supplementary Retirement Scheme in Singapore Gets You Tax Savings
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);
Investment returns are accumulated tax-free.
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.
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"SRS website is an invaluable resource for anyone interested in planning for retirement. It offers a comprehensive guide to the scheme, explaining its benefits and tax advantages in clear, easy-to-understand language. Navigating the website is a breeze, thanks to its user-friendly layout and intuitive design. I particularly appreciate the wealth of calculators and tools available to help users estimate their retirement needs. Whether you're new to SRS or a seasoned investor, this website is a must-visit for planning your financial future."
"Srs.sg is very useful to help me understand the benefits of srs account and the idea of deferred tax payment can help myself grow the account value before retirement age."
"SRS website has consistently provided me with up-to-date and reliable information about the scheme. It's clear that the administrators prioritize keeping users informed about any changes or updates. The website's blog section and newsletters are excellent sources of financial insights and retirement planning tips. The educational resources available have been instrumental in helping me make informed decisions about my retirement savings. I highly recommend this website to anyone seeking trustworthy information on SRS."
"One of the standout features of the SRS.sg is the accessibility to support and information. I had questions or needed clarification, the FAQ section is thorough and covers a wide range of topics, making it easy to find answers to common queries. This level of responsiveness and support sets a high standard for other financial websites. I feel confident knowing that I can rely on the SRS website for assistance with my retirement planning journey."
"SRS goes beyond being just an information hub; it's an educational platform that empowers users to take control of their retirement planning. The resources available, such as retirement calculators and tax calculator, have been instrumental in helping me make informed decisions about my financial future. The website's commitment to financial literacy is commendable, and it has played a significant role in enhancing my understanding of retirement planning. I believe that this website is an essential tool for anyone looking to secure a comfortable retirement."
Get Your Answer
Do I need to pay taxes on the dividends received from unit trusts that were purchased using SRS funds?
Dividends and distributions that are one-tier exempt, received from unit trusts purchased using SRS funds and deposited into the SRS account, are not subject to taxation at the time of credit into the SRS account. However, any amount withdrawn from the SRS account will be subject to tax.
Is it possible for an SRS account holder to transfer the balance from their SRS account to the CPF Special Account?
Transferring the balance from an SRS account to the CPF Special Account is not permitted. This restriction exists because the SRS and CPF are separate retirement schemes with different tax treatments. Unlike the CPF scheme, which is completely tax exempt, the SRS scheme is a tax deferral scheme. While SRS contributions are eligible for tax relief, 50% of the withdrawals made at or after retirement are taxable. Transferring balances out of the SRS account is considered a taxable withdrawal.
The CPF scheme enjoys more favorable tax treatment compared to SRS as it caters to basic retirement needs, while SRS caters to supplementary retirement needs. Allowing the transfer of funds between the two schemes would blur the distinction and contradict the purpose of having two separate schemes in the first place.
Is it possible for me to transfer my SRS account from one SRS Operator to another?
Absolutely! It is indeed possible to transfer your SRS account from one SRS Operator to another. However, please note that if you have already made a withdrawal from your account upon reaching the relevant retirement age* or due to medical reasons, you will not be allowed to make new contributions to your account following the transfer.
(* The retirement age specified by the law at the time you made your initial SRS contribution.)
How do I make payment for a SRS purchase?
You will have to ensure that there are sufficient monies in your SRS account. The merchant will request 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.