How to build your golden nest egg with SRS?

The Supplementary Retirement Scheme (SRS) was started in 2001 to complement CPF LIFE and help Singaporeans save for a comfortable retirement. It is a voluntary savings scheme that allows participants to contribute any amount of money, any number of times in a year, subject to an annual cap of $15,300 for Singaporeans and $35,700 for foreigners. The best part is contributions made towards your SRS account help you unlock dollar-for-dollar tax relief.

In this article, you will learn about:

  • How SRS contributions can help you save on your tax bill
  • The various financial instruments in which you can invest your SRS funds
  • How to make the best use of your SRS funds with insurance
  • Tax concessions on withdrawals made from your SRS account

1. Potential tax relief on SRS contributions:

Every dollar contributed to the SRS reduces your taxable income by the same amount. And, the higher your income, the more tax you can save with an SRS account, as depicted in the table below:

Taxable Income

Tax chargeable without SRS account

Tax chargeable after $15,300 SRS Contribution

Total Tax savings

















You can check your SRS tax savings by using this calculator.

Please note there is a cap of $80,000 for total personal income tax relief, including SRS contributions and anything else that entitles you to relief such as Working Mother's Child Relief and donations.

2. Make your SRS savings work harder with insurance:

As of Dec 2019, 27% of SRS funds are invested in insurance as per Ministry of Finance (MOF) figures, thereby making it one of the most popular investment choices to park your SRS funds.

Opting to purchase selected endowment savings plan is a great way to grow your SRS funds. These insurance products are designed to pay-out a steady income in guaranteed and non-guaranteed options and can help you build a healthy retirement corpus over a period of time.

Insurance plans also provide cover for some of life’s unfortunate events offering financial protection to your loved ones. Some SRS Insurance Options listed here.

3. Enjoy further tax concessions on your SRS withdrawals:

On reaching the age of 62 years, you can start making withdrawals from your SRS account. The added advantage of the Supplementary Retirement Scheme is that 50% of your withdrawals are tax-free.

If you make withdrawals amounting to $40,000, the first $20,000 will be tax-free, and since the next $20,000 falls below the taxable bracket, you will not have to pay any tax for the year. Of course, this is assuming that you do not have any other source of income at the time. Do note that any withdrawals made before age 62 will invite a 5% penalty and will be taxable.

Open your SRS account today!

Retirement might seem years away, but time flies! Not only that, the retirement age will be increased to 63 years by 2022 and 65 years by 2030. However, if you open your SRS today, and contribute just $1, you would be able to make withdrawals from your SRS account at age 62, without paying any penalties, even if the retirement age is raised to 65 in the future. So head over to any of the authorised SRS operators (DBS/POSB, UOB & OCBC) and open your account today!

To conclude:

The Supplementary Retirement Scheme offers you an easy way to build a nest egg for your silver years and reduce the amount of money you hand over to the taxman annually. And the best time to open an SRS account is now! Because, the earlier you start saving, the easier it is to achieve your saving goals and build a sizeable corpus for the autumn of your life.

The information in this article does not necessarily reflect the views of Prudential Assurance Company Singapore Pte. Ltd. Certain information in this article may be taken from external sources, which we consider reliable. We do not represent that this information is accurate or complete and should not be relied upon as such.

This article is for your information only and does not consider your specific investment objectives, financial situation or needs. We recommend that you seek advice from a Prudential Financial Consultant before making a commitment to purchase a policy.