16th July, 2026
As we are coming close into year end, it is a good time to take a look at your Supplementary Retirement Scheme (SRS) monies.
Many of you are already familiar with CPF, their various schemes and count on them to fund for your golden retirement years. However, not many know about SRS. So what exactly is SRS?
SRS is a voluntary savings scheme that encourages saving for retirement over and above your CPF savings, while providing tax benefit. You can open a SRS account with any one of the three local banks in Singapore – DBS, OCBC or UOB.
SRS helps to lower your tax
Savings contributed to SRS account are eligible for dollar-for-dollar tax relief. The amount to contribute into SRS is entirely up to you, but there is a cap on the maximum contributions that you can make. Currently, the SRS contribution cap is S$15,300 for Singaporeans and PRs, which can be offset from your income in the year you made the contribution.
Both Mr Luigi and Mr Mario heard that contributing into SRS will allow them to enjoy tax savings. Let’s take a look at the scenarios
- No contribution,
- Partial contribution of $7,000
- Full contribution of $15,300
and the potential tax savings under the different situations.
As seen in the examples above, both Mr Mario and Mr Luigi save the most if they contributed the maximum amount, more than partial or no contribution.
Mr Mario naturally saves more taxes as Singapore personal income tax rates are progressive. That means, a higher income earner like Mr Mario pays proportionate higher tax than Mr Luigi.
Choosing the right strategy
While contributing to SRS allows you to enjoy tax benefit, the balance in your SRS account only earns an annual return of 0.05%. Investing it allows you to earn potentially higher returns thereby maximising your SRS savings.
The above illustrates the differences between leaving your SRS savings idle versus investing it. You get to enjoy the flexibility of using your SRS monies to invest in a right investment plan that suit your needs and risk profile such as approved single premium insurance plans and unit trusts. The returns on these investments will be directed back to your SRS account, where it can grow steadily and tax free.
Investing in SRS funds is easy, it offers you the opportunity to build up your retirement nest egg along with tax benefits. Act before the year end!
Speak to our advisers on what options are best suited for your retirement. You can do it at your convenience through a zoom call or if you prefer a face to face meet up, have our advisers to get in touch with you.