As you may be aware in year 2001 the Singapore Government launched a savings scheme called Supplementary Retirement Scheme [SRS in short]. SRS is part of the Government's multi-pronged strategy to address the financial needs of our greying population.
SRS complements the Central Provident Fund [CPF]. CPF savings are meant to provide for housing and medical needs for basic living needs after retirement. Whereas SRS is a voluntary scheme. Indeed, it is a voluntary scheme to encourage working individuals to save for retirement, over and above their CPF savings.
Participants can contribute a varying amount to the SRS [subject to a cap] at their own discretion. The contributions may be used to purchase various investment instruments. How? Please feel free to drop me a note and I would be more than delighted to share with you on how it works.
SRS also offers attractive tax benefits.
> Tax Relief on SRS contributions (subject to certain limits)
at the tax rate applicable to the top slice of your income.
> Investment gains accumulated tax-free.
> Only 50% of the amount withdrawn on retirement will be taxed.
You can spread your withdrawals over 10 years to enjoy greater tax savings.
> Full amount taxed if withdrawn before
retirement. Further penalty at 5% will be imposed
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