I am on my target to maximize my Supplementary Retirement Scheme (SRS) contribution for the year 2022. I opened my Supplementary Retirement Scheme (SRS) account with OCBC in 2016 for the purpose of tax relief. This post is to remind myself that we are only one month away to the end of the year. All contributions to SRS must be made before the year end in order to be eligible for tax relief.
Contributions to the Supplementary Retirement Scheme account are eligible for tax relief and only 50% of the withdrawals from Supplementary Retirement Scheme are taxable at retirement.
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.
Where to open a SRS account? SRS accounts are managed by 3 bank operators. They are DBS Group Holdings Ltd, Overseas-Chinese Banking Corporation (OCBC) Ltd and United Overseas Bank (UOB) Ltd.
Are SRS contributions investable? Yes, you can invest your SRS contributions in investment products such as stocks, unit trusts, certain insurance products and Singapore Savings Bonds.
What is the maximum SRS contribution allowed? In this year 2022, SRS contributions by Singaporean and Permanent Residents (PR) are eligible for tax relief of up to S$15,300. For foreigners, the maximum allowed is S$35,700.
When can you withdraw money from SRS for retirement? You may make penalty-free withdrawals from your SRS account over 10 years starting from the date of your first penalty-free withdrawal.
In my case, I can start withdrawing S$40,000 from my SRS account at age 62 and only 50% of the amount withdrawn is taxable. Taking Year of Assessment (YA) 2022 as an example, no tax needs to be paid as the tax rate is zero for the first $20,000 of the individual’s chargeable income.