Tell me frankly, have you heard of the Supplementary Retirement Scheme (SRS)? Few Singaporean have heard of the SRS even though the scheme was established in 2001. And for some, they thought it meant for oldies. In fact, the SRS was created to complement the CPF by giving wage earners like you and me an incentive to save for retirement.
Cash invested in an SRS account is taxfree. Currently, the maximum which a Singaporean can put into his SRS account is $11,475 per year. One can also use the money in the SRS account ti buy unit trusts, insurance policies or stocks listed on the Singapore Exchange.
So what's the catch? An early withdrawal of cash from an SRS account will attract a penalty fee of 5%. The sum withdrawn is also considered as part of the investor's taxable income for that year. But once the mandary retirement age is reached, the 5% penalty no longer applies and only 1/2 the sum withdrawn in any year would be subject to income tax.
Cash invested in an SRS account is taxfree. Currently, the maximum which a Singaporean can put into his SRS account is $11,475 per year. One can also use the money in the SRS account ti buy unit trusts, insurance policies or stocks listed on the Singapore Exchange.
So what's the catch? An early withdrawal of cash from an SRS account will attract a penalty fee of 5%. The sum withdrawn is also considered as part of the investor's taxable income for that year. But once the mandary retirement age is reached, the 5% penalty no longer applies and only 1/2 the sum withdrawn in any year would be subject to income tax.
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