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SRS - Maximising Your SRS Withdrawals

Updated: Oct 8, 2021

When it comes to SRS, the main advantage is for the tax breaks.

If you do participate in SRS contributions, the amount of tax savings you can benefit goes hand in hand with the amount of your income.

According to this table by IRAS, your gross tax payable will increase with the amount of chargeable income you report in that year.

Once your annual income crosses the $40,000 mark, you will notice a significant increase in your income tax payable. Thus, to enjoy some income tax savings, you may want to consider contributing some of your earnings to your SRS account and this will help to reduce the amount of tax you are obliged to pay in that financial year.

However, you should take note that there is a contribution limit to your SRS account; this amount is capped at $15,300 per year for Singaporeans and PRs, and up to $35,700 for foreigners.


When it comes to cash withdrawal from your SRS account, you should bear in mind these important rules that apply.

1. Early withdrawals of funds before retirement age

While there is no restriction to when you can withdraw money from your SRS account, there is a 5% penalty fee on the amount withdrawal should you choose to do so before the statutory retirement age. Furthermore, you are subject to tax on 100% of the amount withdrawn from your account. Hence, it is important to time your withdrawals strategically to maximise your tax advantage from these contributions.

2. Withdrawals made due to special circumstances

In the following cases, the various rules will apply:

  • Withdrawal in Full on Terminal Illness and Deemed Withdrawal Upon Death

    • A tax exemption of up to $400,000 would be granted for SRS funds withdrawn in full to ensure that SRS members are not at a disadvantage due to terminal illness or death

    • 50% of any remaining amount of such a full withdrawal or deemed withdrawal will be subjected to tax

    • 5 % penalty for early withdrawal will not apply in this case

  • Withdrawal on Medical Grounds

    • For withdrawal on medical grounds, you must be physically or mentally incapacitated from employment or suffering from terminal illness

    • 5% penalty for early withdrawal will not apply in this case

  • Withdrawal due to Bankruptcy

    • 5% penalty for early withdrawal will not apply, however, 100% of the amount withdrawn will be subjected to tax

3. Withdrawals of funds at or after retirement age

Upon crossing your statutory retirement age, you are able to spread out your withdrawals over a 10-year period, starting on the date of your first withdrawal. By doing this, only 50% of your SRS withdrawal will be subject to tax. By adopting this strategy may be a sensible decision to minimise any income tax during the 10 years by spreading it out and withdrawing it only after your retirement when you stop earning an income.

Furthermore, based on the income tax bracket, the tax rate is zero for the first $20,000 of an individual's chargeable income. Thus, if you were to withdraw $40,000 in a calendar year and have no other sources of income, you will not be required to pay any income tax on your SRS withdrawals.

To illustrate the above points, here is an example. Assuming you have an account balance of S$400,000 and withdraw S$40,000 over 10-year period with no other income stream, you will not have no tax liability at all in your retirement.

There are certainly many factors to think about when it comes to optimizing your SRS account. However, with proper planning, SRS can be an effective tool to help you save more for your golden years, as well as to enjoy the other benefits it can offer.

To find out more about SRS, join us on an educational webinar with subject experts from St. James's Place, and Dollars and Sense. Full details of the webinar can be found below.

Important notes

The levels and bases of taxation and reliefs from taxation can change at any time. The value of any tax relief depends on individual circumstances. You are advised to seek independent tax advice from suitably qualified professionals before making any decision as to the tax implications of any investment.


Date: 21st October, Thursday

Time: 2pm to 3pm

Retirement planning may sound like a topic that is unnecessary and daunting for many, particularly so when you are far from the retirement age. However, in today’s world where life expectancy is increasing, the way we live and plan our finances for our future have changed significantly.

Please join us as we speak with Dinesh Dayani, Co-Founder of Dollars and Sense, and Elson Goh, Head of Asia Portfolio Management of St. James’s Place, on how we can prepare our finances for the road ahead and how SRS can complement our retirement aspirations.

Important notes

This webinar is a general communication being provided for informational purpose only. It should not be relied upon as financial advice and it does not constitute a recommendation, an offer or solicitation. No responsibility can be accepted for any loss arising from action taken or refrained from based on this publication. All information presented herein is considered to be accurate at the time of production, but no warranty of accuracy is given and no liability in respect of any error or omission is accepted.

The value of an investment with St. James’s Place will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than the amount invested.

St. James’s Place (Singapore) Private Limited is regulated by the Monetary Authority of Singapore and is a member of the Investment Management Association of Singapore and Association of Financial Advisers (Singapore). Company Registration No. 200406398R. Capital Markets Services Licence No. CMS100851.

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