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Seedly SRS $1 Hack + SRS Account Opening Promo 2021

Supplementary Retirement Scheme Hack: Top Up $1 to Your SRS Account Before 2022

profileKenneth Lou

You’ve probably read or heard this piece of advice many times in Seedly or even among your savvier circle of friends.

“Top up $1 to your Supplementary Retirement Scheme (SRS) account to lock-in your retirement age!”

Wondering why you should do that?

Source: SpongeBob SquarePants | Giphy

Hint: it’s to do with retirement planning and massive tax savings if you play your cards right

To help you, I’ll even show you a step-by-step guide on how to open an SRS account.


TL;DR: Here’s Why You Should Contribute $1 To Start Your SRS Account Today

With an SRS account, you can:

  • reduce your taxable income by $15,300 every year
  • invest your SRS monies and enjoy tax-free returns
  • withdraw up to $40,000 per year from your SRS account tax-free on or after reaching the statutory retirement age (that’s $400k over 10 years tax-free)

You can open it anytime.

So why do it now?

Well… it’s all thanks to this particular paragraph that I found in a 29-page PDF put up by the Ministry of Finance:

Source: Ministry of Finance

Government policies are updated pretty often, so we never know when they might raise the current statutory retirement age from 62 years old to higher.

.

.

.

Oh, wait… they ALREADY did.

Yep, the statutory retirement age will be raised from 62 to 63 in 2022 and further increased to 65 by 2030.

So if you want to be able to withdraw your SRS monies at 62, you should make your first contribution to your SRS account before 2022.

IF you’re on the fence about this, your first contribution could be as little as $1.

Just don’t put more than that if you haven’t figured out how your SRS account can help you in retirement planning yet.

Interested?

Check out these SRS Account Promotions:

SRS Account Opening Promo 2021

New SRS Account Opening PromoGiftInvest With New SRS Account PromoAdditional GiftValid Till
DBS/POSB SRS PromoOpen new SRS Account via digibank (online) & contribute min $10,000
- First 4,000 only
$50 cash giftPurchase Unit Trusts and/or Insurance with new SRS Account funds via digibank or at any DBS/POSB Branch
- First 4,000 only
$30 cash gift
($1,000 to $5,000)
5 December 2021
$40 cash gift
($5,001 to $10,000)
$50 cash gift
(more than $10,000)
OCBC SRS PromoTBA
UOB SRS PromoTBA

Note: I’ll update this article again once OCBC and UOB releases their promos


What is the Supplementary Retirement Scheme (SRS)?

The Supplementary Retirement Scheme was started in 2001 and is part of the Singapore government’s multi-pronged strategy to address the financial needs of a greying population.

It’s basically a way to help Singaporeans to save more for their old age.

Over and on top of their Central Provident Fund (CPF) monies, of course.

Think of the SRS as an extra savings and investment account for retirement planning.

It is a purely voluntary scheme, unlike our CPF, where you can contribute any amount subject to a cap of $15,300 yearly.

You can choose to open your SRS account with any of the following banks in the private sector: DBS, OCBC, or UOB.

You’ll only earn the standard 0.05% p.a. return as you would with a regular bank savings account.

But if you want to, you can also use your SRS monies to invest in various financial instruments and products to increase your returns.

What Is the Difference Between Topping Up SRS vs. CPF Special Account vs. Holding Onto Cash?

When it comes to retirement planning and tax savings, a lot of people are confused between topping up their SRS Account vs. their CPF SA.

To give you a better overview of what’s the difference and what’re the potential returns you can get, I’ve created a comparison table.

FYI: I’ve also included holding onto cash in your bank savings account as a point of reference too.

SRS vs. CPF vs. CashSupplementary Retirement Scheme (SRS)CPF Special Account
(CPF SA)
Cash
(Savings Account)
Interest Rate0.05% p.a.

Note: returns can be higher depending on what you choose to invest in
4 to 5% p.a.0.05 to 2% p.a.
Yearly Contribution Cap$15,300
(Personal)
$7,000
(Personal)

$7,000
(Family member)
No
Tax Deductible?YesYesNo
Withdrawal ConditionsAt 62 years old
(retirement age)

Note: if withdraw before, subject to 5% fee
At 65 years old
(default)

At 55 years old
(if you have met Basic Retirement Sum)
Anytime
How To StartOpen with DBS, OCBC, or UOBAutomatically enrolled for Citizens or PROpen with any bank

Regardless of what you do, don’t just leave your money in your regular bank savings account which only gives you a paltry 0.05% p.a.

At least put it into a high-interest savings account while you figure out if you want to do an SRS or CPF SA top-up.

Now that you have an overview, here’s a more in-depth look at the 3 various options I’ve presented to you.

1) Supplementary Retirement Scheme (SRS)

Pros of Putting My Money in SRS:

  • You can lock in your retirement age at 62 years old
  • You can save more on tax every year with a higher contribution amount than topping up your CPF SA
  • You can withdraw your money before 62 years old (although at a 5% fee) if you need the money urgently

Cons of Putting My Money in SRS:

  • You get 0.05% p.a. like a regular bank savings account
  • You can choose to invest your monies, but the investment returns are non-guaranteed because it depends on your decisions as an investor

2) CPF Special Account (CPF SA)

Pros of Putting My Money in CPF SA:

  • You are automatically enrolled and start contributing once you start work (if you’re a Singapore citizen or PR)
  • You get 4 to 5% p.a guaranteed by the Singapore government
  • You can use it as a ‘bond’ option in your portfolio where the maturity is at 55 or 65 years old

Cons of Putting My Money in CPF SA:

  • You can only contribute a maximum of $7,000 cash top-up for self-contribution and another $7,000 for family members
  • You cannot touch the money until 55 or 65 years old even when you really need it

3) Cash in Bank

Pros of Putting My Money in the Bank:

  • You get up to 2% p.a if you have a monthly salary and can fulfil the requirements set by the bank (eg. credit card spend, bill payment, insurance and etc)
  • You can withdraw the money anytime
  • You can decide what you want to do with your money any time (either to save or invest and earn potentially higher returns)

Cons of Putting My Money in the Bank:

  • You don’t get any tax-deductions at all
  • Your money will lose its value over time since inflation is much higher than 0.05% p.a. if you just hold on to it and don’t invest it at all

Step-by-Step Guide To Opening and Topping Up Your SRS Account

It’s really simple.

I did it in less than 5 minutes via DBS/POSB’s digibank platform.

Disclaimer: we’re not sponsored, I just decided to open my SRS account with DBS since I have most of my money with them

Step 1: Log in to your bank’s iBanking website

Step 2: Apply for a Supplementary Retirement Scheme account

Just follow the instructions and you should get it opened almost immediately.

Step 3: Make a $1 Top Up to Your SRS Account

Topping up your SRS account is almost like you’re transferring money from one savings account to another.

It’s really that easy!

And that’s it!


SRS Account Opening 2020: Start Your SRS Account Today with $1

If you’re convinced that an SRS account is useful for your retirement planning and you want to lower your taxes.

Here are some SRS account opening promotions for new SRS account holders (sorry, existing SRS account holders):

SRS Account Opening Promo 2021

New SRS Account Opening PromoGiftInvest With New SRS Account PromoAdditional GiftValid Till
DBS/POSB SRS PromoOpen new SRS Account via digibank (online) & contribute min $10,000
- First 4,000 only
$50 cash giftPurchase Unit Trusts and/or Insurance with new SRS Account funds via digibank or at any DBS/POSB Branch
- First 4,000 only
$30 cash gift
($1,000 to $5,000)
5 December 2021
$40 cash gift
($5,001 to $10,000)
$50 cash gift
(more than $10,000)
OCBC SRS PromoTBA
UOB SRS PromoTBA

So there you have it!

I hope this helps you to think about how an SRS account can help in your retirement planning.

While lowering your taxes!

If you need help with retirement planning, or just want to discuss it more with like-minded individuals, head on over to the Seedly right now!

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About Kenneth Lou
Co-founder of Seedly. Passionate about helping people make smarter financial decisions.
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