What is it?
The Supplementary Retirement Scheme (SRS) was established on 1st April 2001 to encourage individuals to save for their retirement by offering tax incentives.
Who is eligible?
* Singaporeans, Singapore PRs and foreigners 21 years and above
* Not a bankrupt or of unsound mind
* Has an earned income in the preceding year
* Passive incomes such as interest, dividend or rental are not eligible
What are the Benefits?
* Your contribution to the SRS will be granted Tax Relief against your Income for that year of assessment.
* Only 50% of your SRS savings taxable when withdrawn on retirement.
* Withdrawals may be staggered over 10 years to avoid the minimum ceiling for tax.
What are the minus points?
* Full amount taxed if withdrawn before the statutory retirement age.
* Further penalty at 5% will be imposed.
How much can you contribute in 2007?
$11,475 for Singaporeans and SPRs
$26,775 for Foreigners
Where can I start my SRS account?
* Open up an account with our 3 local banks. DBS, UOB and OCBC
* Internal Transfer your funds or write a cheque to your own name and SRS account
Is there any charges for opening or maintaining an account?
* Currently "No"
What can I do with the SRS monies?
* You can keep in the account, invest it or get an endowment plan from a Local Insurance Company.
In my next posting, I'll write about how you will get a guaranteed profit from your SRS in your investments.
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