Why You Should Top Up $1 Into Your Supplementary Retirement Scheme (SRS) Account
Been thinking ’bout retirement? Nope?
Worry not, because I (unfortunately) fall in the same camp. But as insurance ads often remind us, it’s never too late to start.
Enter: the Supplementary Retirement Scheme (SRS), which was introduced in 2001 to supplement your CPF retirement savings.
While it works on a voluntary basis, topping up your SRS essentially means you’re guaranteed your withdrawal amount at the current statutory retirement age of 62 – no matter if this is adjusted to, say, 65 years old several years down the road.
On that, here’s everything to know about SRS, and where it stands against the CPF Special Account (SA).
We’ve so far laid out the pros and cons of SRS, but how does it fare against planting your money in CPF SA – or a savings account?
|Supplementary Retirement Scheme (SRS)||Special Account (CPF SA)||Cash (Savings Account)|
|Interest Rate||0.05% p.a (savings) |
6-7% p.a (invest)
|4-5% p.a||0.05 to 2% p.a|
|Yearly Contribution Cap||$15,300 (personal)||$7k (personal)|
$7k (family member)
|Withdrawal Conditions||62 years old (Retirement age)|
If before, 5% fee
|65 years old (default)|
55 years old (if you have enough above basic retirement sum)
|How To Start||Open with DBS, OCBC, or UOB||Automatically enrolled for Citizens or PR||Your savings account|
As you can see, it really comes down to what you’re looking for in retirement (I know, what an annoyingly PC statement – but whatchu want?).
It doesn’t take much effort to supplement your CPF savings, though.
Here’s how starting your SRS with as little as a dollar could set you up for an earlier withdrawal.
Setting Up Your SRS Account
It’s an easy three-step process to kickstart your account:
- Login to your iBanking account
- Under Apply, click on Supplementary Retirement Scheme (SRS)
- Transfer a dollar to your newly set-up SRS account.
You’re all set!
Would you set up an SRS account, or do you reckon your CPF SA savings would be sufficient for retirement? Tell us on our Facebook page!