When Can I Withdraw My SRS Funds? Can I Withdraw Anytime?
When Singaporeans and Permanent Residents (PR) register for their Supplementary Retirement Scheme (SRS) account, they will be informed that they can only make a withdrawal after their statutory retirement age (currently at 62 years old), without incurring additional penalties.
If you withdraw from your SRS account anytime before the statutory retirement age, you will have to pay tax for 100% of the amount withdrawn, in addition to a 5% penalty fee.
On the bright side, if you only withdraw your SRS funds after reaching your retirement age, as intended by the government, only 50% of your withdrawn amount will be taxed. This tax saving withdrawal period is only applicable for 10 years after your first withdrawal when or after you reach the statutory retirement age.
However, investments in life annuities are exempted from this 10-year period. As long as you continue to receive income from your annuity streams, the 50% tax concession still applies.
If you are a foreigner, you will have to maintain your SRS funds for at least 10 years from the date of the first contribution, before you can withdraw. If you decide to withdraw your SRS funds after 10 years, you will have to withdraw in full, where only 50% of your SRS funds will be subjected to tax.
Knowing this, you can start strategizing your withdrawal plan so you can fully utilise the tax benefits.
Are There Any Special Withdrawal Conditions Without 5% Penalty Charges?
Yes. If you:
- declare bankruptcy
- withdraw on medical grounds (physical/mental incapacity, and partial withdrawal for terminal illness)
- withdraw in full for terminal illnesses
In the event of these withdrawals, you can only withdraw in cash, not equities. For withdrawals due to bankruptcy, your withdrawal sum is fully subjected to tax; whereas if you withdraw on medical grounds, only 50% of your withdrawal sum will be subjected to tax. However, if you withdraw in full on grounds of terminal illness, 50% of your withdrawal amount after deducting tax exemption will be subjected to tax.
| Type of withdrawal | Amount subject to tax | 5% penalty imposed? | |
| Penalty-Free withdrawal | Withdrawal on or after prescribed retirement age (withdrawal can be spread over 10 years from the date of first penalty-free withdrawal) |
50% of withdrawal sum | No |
| Withdrawal in the form of annuities | 50% of annual stream | No | |
| Withdrawal on medical ground (e.g. physical/mental incapacity and partial withdrawal on grounds of terminal illness) |
50% of withdrawal sum | No | |
| Withdrawal in full on terminal illness | 50% of full withdrawal sum less exemption* | No | |
| In the event of bankruptcy | 100% of withdrawal sum | No | |
| Withdrawal in one lump sum by a foreigner (excluding Singapore Permanent Resident) He/She must have maintained the SRS account for at least 10 years from the date of first contribution and have been a non-Singaporean for a continuous period of 10 years before date of withdrawal. |
50% of lump sum | No | |
| Other Withdrawals | Early withdrawals before retirement age | 100% of withdrawal sum | Yes |
*From Year of Assessment 2016, a specified amount of SRS funds withdrawn
in full on the grounds of terminal illness would be exempt from tax.
Strategising your SRS
withdrawals over 10 years
| Age | Account balance | Withdrawable amount |
Taxable amount* |
Tax liability |
| 62 | S$400,000 | S$40,000 | S$20,000 | S$0 |
| 63 | S$360,000 | S$40,000 | S$20,000 | S$0 |
| 64 | S$320,000 | S$40,000 | S$20,000 | S$0 |
| 65 | S$280,000 | S$40,000 | S$20,000 | S$0 |
| 66 | S$240,000 | S$40,000 | S$20,000 | S$0 |
| 67 | S$200,000 | S$40,000 | S$20,000 | S$0 |
| 68 | S$160,000 | S$40,000 | S$20,000 | S$0 |
| 69 | S$120,000 | S$40,000 | S$20,000 | S$o |
| 70 | S$80,000 | S$40,000 | S$20,000 | S$0 |
| 71 | S$40,000 | S$40,000 | S$20,000 | S$0 |
*First 50% of each withdrawal upon reaching 62 years of age is taxable, but because $20,000
falls below the tax bracket, the tax liability for the following assesment year is S$0.
How Can I Withdraw Without Getting Taxed?
Scenario A:
In an ideal scenario where you have $400,000 in your SRS account and no other taxable income, you can spread your withdrawal of $40,000 over a period of 10 years and pay 0 tax. This is because only 50% of your withdrawn sum is subject to tax, and you will not be taxed for the first $20,000 of your total chargeable annual income.
Withdrawn amount (every year for 10 years): $40,000
Amount taxable after 50% tax concession: $20,000
Tax payable: $0
Scenario B:
You have $500,000 in your SRS account, and have no other taxable income. You can choose to stagger your withdrawal over 15 years, by withdrawing $40,000 each year during the first 10 years, and withdrawing $20,000 from the 11th to 15th year, without incurring any tax.
Withdrawn amount (every year for 10 years): $40,000
Amount taxable after 50% tax concession: $20,000
Tax payable (every year for 10 years): $0
Withdrawn amount (every year on the 11th-15th year): $20,000
Amount taxable (100%): $20,000
Tax Payable: $0
Scenario C:
You have $400,000 in your SRS Funds and no taxable income, but you signed up for a life annuity plan. As mentioned, only 50% of your life annuity income is subject to tax, even after the 10-year period. So you should withdraw $40,000 each year and continue enjoying tax concessions on your annuity streams.
Withdrawn amount (every year for 10 years): $40,000
Amount taxable after 50% tax concession: $20,000
Tax payable: $0
Annuity stream per annum: $40,000
Amount taxable after 50% tax concession: $20,000
Tax payable: $0
What Happens To My SRS Funds When I Pass Away?
SRS accounts do not have any nomination of a beneficiary, as the government intended for SRS funds to be for the individual’s own retirement purposes. That being said, if you pass away, your SRS balance will be part of your assets, and be distributed according to your will or the law, if you do not have a will.
There will be no 5% penalty fees on withdrawal, and only 50% of the amount in your SRS account after deducting the sum of deemed withdrawal upon death is subject to tax.
With strategic investments and withdrawals, you will be able to maximise your SRS tax savings and returns. Planning for retirement with a SRS account can be overwhelming.
Check out our SRS-approved endowment plans or contact us to learn more on how to maximise your SRS returns today!
This is for general information only and does not constitute financial advice. This advertisement has not been reviewed by the Monetary Authority of Singapore.