3 Ways To Make The Most Out Of Your SRS

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Prudent individuals go through great lengths in order to build retirement fund. Many Singaporeans completely rely on the government-mandated Central Provident Fund (CPF). It is a savings plan to fund important expense categories such as retirement, housing, and healthcare. Unbeknownst to some, there is a scheme that is meant to complement the strength of CPF. I am talking about the Supplementary Retirement Scheme (SRS). SRS flourishes your retirement savings by providing tax relief and investment options. Unlike CPF, SRS is a voluntary scheme. SRS members are free to contribute varying amounts which are subjected to a specific limit.

Make the most out of your SRS account by employing these tips:


While helping you cultivate your future, SRS simultaneously reduces your tax expenses at the present moment.

There are different types of tax relief that you can claim, such as the Earned Income Relief, Qualifying Child Relief, NSman Self Relief, and Parent Relief. The first one refers to the deduction of taxable income for every dollar deposited into the SRS account. Furthermore, you can reap tax-free investment gains made through your SRS account (i.e., not applicable to Singapore dividends).


Let us be honest! You can withdraw funds from your SRS account even before you retire. Unfortunate instances such as medical emergencies and bankruptcy are among the significant reasons why this happens. Withdrawals can be completed in the form of cash or investments.

You must strategize your withdrawals to receive the most profitable scenario. You see, there is a chance that you will end up paying more tax if you withdraw the entirety of the SRS account upon retirement. By “more”, I am referring to the comparison between the “withdrawal tax” and the income tax savings. Consider scheduling your withdrawals spanning the period of 10 years.


SRS is more than just a scheme to reduce your tax as it is an efficient tool for growing your retirement funds. It is meant to supplement your retirement money by embracing investment options. An increasing number of Singaporeans had been making contributions to their SRS accounts. For instance, the contributions made until December 2015 reached more than S$4 billion.

Why are people drawn to investing their SRS funds? For starters, gains are non-taxable. Furthermore, the long-term returns are higher when invested as compared to leaving your SRS fund in idle. From the retirement age and beyond, only 50% of your withdrawals will be taxable. It goes without saying that your bigger risk appetite is subject to the volatility of the stock market.

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A local institution that allows using SRS funds for unit trusts, index funds, unit trusts, or blue chip shares is OCBC.

Sources: 1 & 2

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