Supplementary Retirement Scheme (SRS) withdrawal

Lifetime Membership Following my previous article, “My first CPF top up”, a member of SG Wealth Builder wrote in to enquire on how retirees could withdraw their Supplementary Retirement Scheme (SRS) monies without incurring income tax. In this article, I will share some of my insights on SRS withdrawal.

In accordance with the Retirement and Re-employment Act, the statutory retirement age in Singapore is raised to 63 in 2022. In the context of SRS, this change is significant as it could affect the penalty and tax liability upon SRS withdrawal.

SRS withdrawal

Unlike CPF withdrawal, you can make SRS withdrawal anytime. However, if the SRS withdrawal is made before the statutory retirement age prevailing at the time of the first contribution, 100% of the sum withdrawn will be subject to tax. A 5% penalty for premature withdrawal will also be imposed.

According to IRAS, “Withdrawals are penalty-free only if they take place on or after the statutory retirement age (63 effective from 1 Jul 2022) that was prevailing at the time of your first SRS contribution (i.e. prescribed retirement age). If you have already opened an SRS account and made your first contribution, any subsequent change in the statutory retirement age (e.g.

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Preserve wealth amid COVID-19

COVID-19 has upended the entire global economy and caused millions of people to lose their jobs. Over in Singapore, the Ministry of Trade and Industry (MTI) projected the GDP growth for 2020 to be -7.0 to -4.0 per cent. This is certainly a very frightening period of time in the modern day history. Against this backdrop, is it even possible for a retiree to preserve wealth amid COVID-19?

A retiree who is in his twilight years has a short runway and limited timeframe to build wealth. So at this phase of his life cycle, the strategy should be to preserve wealth instead  growing wealth through the stock market. The recent sharp corrections in the stock market should be a stark warning on how risky the stock market can be, especially for the seniors.

Furthermore, with no active income, it will be a challenge for a retiree to do capital injections into his investment portfolio. So when you reach retirement, it is important to protect your money and preserve wealth. This means that the seniors must look beyond the stock market to preserve wealth and ensure they have enough money to sustain till the end of life journey.

preserve wealth

Maybank 2.05% Fixed Deposit

It seems that COVID-19 pandemic has rolled back the time.

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Legacy planning for my family

Sign up for only $19.99! Recently, my mom wanted to do up a Will for herself and suggested that we seek the aid of a legal firm. Incidentally, the following day, one of my readers requested me to do a topic on legacy planning. Henceforth, in this article, I will pen down my thoughts and insights on legacy planning. I also hope that readers will benefit from my research on this topic.

Most people tend to procrastinate on legacy planning. Indeed, in life, there are many priorities that take up our time and resources. But you should note that death is an inevitable part of our life journey. If you don’t do a proper legacy planning, your loved ones could be at a loss of what to do if you suffered from an unfortunate event. Just imagine the emotional turmoil and the prospect of navigating through the financial maze when family disaster strikes.

legacy planning

Legacy planning involves more than just crafting a Will. A proper legacy planning also need to factor in retirement planning and the potential event of total incapacitation. A Will is only effective upon the Will-maker’s death while Lasting Power of Attorney (LPA) operates after the donor loses his mental capacity.

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SRS withdrawal for retrenchment benefits?

During the National Day Rally 2019, Singapore government announced that retirement age will be raised to 65 by 2030. In addition, it was also announced that the proposed adjustments will not affect CPF withdrawal policies or age. The adjustments are necessary due to Singapore ageing workforce and the need to ensure that Singaporeans will be financially independent in their twilight years. Nonetheless, the increase in retirement age will impact the Supplementary Retirement Scheme (SRS) withdrawal age as it is pegged to the statutory retirement age.

In this article, I will share my view on how the increase in statutory retirement age will impact the SRS withdrawal. As usual, this article is not meant to be a form of financial advice. Please consult a financial advisor if you have doubts. I am writing this article because I am planning to open an SRS account and is sharing my research with readers. If there is any mistake contained within this article, please let me know.

SRS withdrawal

10-year SRS withdrawal period

Although both CPF and SRS serve to provide the retirement needs, there are major differences between the two schemes. CPF focused primarily in housing, medical, education and retirement needs. CPF monthly contribution is also compulsory.

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Supplementary Retirement Scheme (SRS) strategies

Supplementary Retirement Scheme (SRS) is part of Singapore government’s effort to address the retirement needs of Singaporeans and is meant to complement Central Provident Fund (CPF).

Over the years, SRS had grown in popularity in Singapore as contributions surged from $0.16billion in 2001 to an explosive $8billion in 2017. During this period, the number of account holders also increased 10 fold, surging from 11,890 to 140,695. Given that so many people had jumped into the bandwagon, it is worthwhile to examine the merits of the supplementary retirement scheme.

While both SRS and CPF are retirement schemes, they work differently and address different financial needs. CPF focuses on housing, healthcare and retirement needs while SRS is a scheme that provides tax relief, investment and saving opportunities.


Generally speaking, SRS is a scheme that Singaporeans and foreigners should consider in the early years of their careers because it comes with many benefits and flexibility. In this article, I will share my strategies and insights on how to leverage SRS to boost your retirement income. I would also highlight the best possible way to exit the fund.

SRS for retrenchment hedge

Firstly, contributions to CPF is mandatory while SRS is purely voluntary. You can choose to contribute to your SRS anytime and as often as you like.

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Singapore Savings Bond versus OCBC 360

Singapore Savings Bond is a new type of government bond that was launched by the Monetary Authority of Singapore in 2015. The bond is considered to be a safe and flexible product that allows Singaporeans to meet their savings and investment needs.

However, demand for Singapore Savings Bonds had been lacklustre in the initial years, presumably because products like OCBC 360, had been giving it a run for its money (literally). Nonetheless, recent developments had caused Singapore Savings Bond to be very attractive. And that led to a change in my view of this bond.

In my previous article on Astrea IV bonds, I shared that I am not ready for fixed income at this stage of my life yet. My stance has not changed. Basically, my family is looking at a safe financial product to store our emergency fund. Thus, we are looking at Singapore Savings Bond from the perspective of wealth protection, rather than wealth building.

In this article, I will share my insights on how Singapore Savings Bond can play a part in strengthening your wealth portfolio through passive income and how it fair in comparison to the popular OCBC 360 account.

Locked-in Interest rates

The first criteria for my family is safety when it comes to managing our emergency fund.

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Understanding CPF LIFE (Lifelong Income for Elderly)

Sometimes, you really have to hand it to the policymakers for coming out with an acronym like CPF LIFE, which stands for Lifelong Income for Elderly. As the name aptly suggests, CPF LIFE provides you with a lifetime monthly pay outs.

Introduced in 2009 by the Singapore government, this annuity scheme ensures that Singaporeans do not outlive their CPF savings.

There is a marked difference between the previous scheme, CPF Retirement Sum, and the current CPF LIFE. It is important that Singaporeans understand how this improved system works so that they can plan their retirement needs appropriately. It should also be noted that the old scheme, CPF Retirement Sum, has not been phased out because there are many Singaporeans who may not qualify for CPF LIFE.

Another unique aspect of CPF LIFE is that it allows you to decide how much you wish to set aside for your loved ones upon your death while balancing the amount of monthly payouts. Thus, I feel that the CPF Advisory Panel [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]

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CPF Retirement Sum Scheme

55 is a milestone age for many Singaporeans as we all look forward to cashing out our hard-earned CPF savings accumulated through decades of hard work. But before you rejoice, it is important to understand the CPF Retirement Sum Scheme.

This is because the amount of cash you can take out may be vastly different from what you had been dreaming of all along. There might be heart pain. There could be disappointment, or even bitterness.

To put things into perspective, Central Provident Fund (CPF) is Singapore’s social security system and over the years, it has evolved to cover not just our retirement needs, but also housing, medical and education purposes. Despite these, the central tenet of CPF is still to ensure that Singaporeans save enough for retirement.

Since the CPF Retirement Sum Scheme is so important, have you ever really sit down and figure out what is it all about?

I was curious about CPF Retirement Sum Scheme and recently tried to gain a better understanding of the retirement policy. Boy, I was nearly blown away! The framework was indeed complicated. No, I am not exaggerating because if you read carefully and make the effort to think deeply, you would realize that the CPF Retirement Sum Scheme is actually not as simple as you thought it should be.

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Retirement strategy

It is everyone’s dream to achieve financial freedom and escape from the rat race as young as possible.  Like everyone else, I share the same aspiration. That is primarily one of the reasons for founding this wealth blog. In recent years, many local financial bloggers shared that they have attained semi-retirement status and left the corporate world for good. In this article, I will share my retirement strategy and how I aim to reach my goals.

According to BlackRock’s Global Investor Pulse Survey 2017, it was revealed that Singaporeans worry about outliving their retirement savings but not doing enough to prepare for retirement. Results showed 64% of Singaporeans worry about running out of money in retirement, the highest proportion in Asia-Pacific. Nearly nine out of 10 Singaporeans (87%) believe they are responsible for their own retirement income.


Everyone has their pathway in life and one should not compare their financial status with others. My retirement strategy is very simple – I plan not to retire at all. This statement may come across as oxymoron but simply put, I hope to extend my career shelf life as long as possible. I don’t relish the idea of idling around and being seen as not contributing to the progress of the society.

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You’ll Never Walk Alone with Central Provident Fund

For many football fans, the song “You’ll Never Walk Alone” is synonymous with English football club, Liverpool. The song is the anthem of Liverpool and has inspired many great comebacks for the football club. Although glory days are clearly over for Liverpool, many fans still adore the club because of its great tradition and core values.

Indeed, values define who we are and guide us through good times and bad times. The Central Provident Fund (CPF) was implemented in 1955 by the British authorities with the aim of abolishing the pension schemes in Singapore and introducing a national saving scheme. The scheme requires employers and employees to contribute a portion of the employee’s monthly salary into their CPF accounts.

The intent of the CPF scheme was to instill among Singaporeans the value of hard work and saving for retirement. Each of us is responsible for growing our wealth and save for rainy days.

Over the years, the CPF scheme had gone through significant changes, especially during the eighties, when the late Mr Lee Kuan Yew was at the peak of his power. These changes were needed to cater for the growing aspirations of Singaporeans. As a result, CPF was expanded to include healthcare, housing and investment purposes.

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Growing your CPF Retirement Fund (Part 2)

As a wealth builder, it is important to start compounding your CPF savings as early as possible when you are in your prime. This is because if you start early, the compound interests can work wonders for your retirement sum. When you reach 55 years old, your Special and/or Ordinary Accounts savings will be transferred to your Retirement Account to form your retirement sum. Your retirement sum can be used to join CPF LIFE or the Retirement Sum Scheme which provides you with a monthly payout of about 20 years.

After setting aside both the Full Retirement Sum or Basic Retirement Sum with sufficient property charge/pledge and the current MMS of $43,500, you can choose to withdraw​ the remaining cash balances in your Ordinary and Special Accounts, or continue to keep your savings in CPF to earn attractive interest.

For myself, I would be placed on the CPF LIFE scheme but when I saw the monthly payout for the Basic Retirement Sum (BRS), I almost fell off the chair. I mean what can you do with $700 per month? Thirty years down the road, with the onset of inflation, the diminishing purchasing power of money would mean that $700 would be equivalent to today’s $200.

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Growing your CPF Retirement Fund (Part 1)

A few weeks ago, I was pleasantly surprised to receive a letter from MINDEF informing me that I was eligible for the 3rd milestone of the NS HOME Awards and that they would credit $5000 into my CPF accounts ($3000 into my Ordinary account and $2000 into my Medisave account). Even more surprising was that due to the award, I have reached the Medisave Contribution Ceiling (MCC), which is currently $48,500. This caused the excess of the MCC to be transferred to my Special Account.

Many Singaporeans, including my wife, are clueless on what will happen to their Medisave accounts when the ceiling is reached. Many people also cannot appreciate the difference between the Medisave Minimum Sum (MMS) and MCC. Ignorance is certainly not blissful when it comes to managing your CPF retirement fund because if you are not given the right information, you may be misled by bloggers trying to stir up negative sentiments.

Before proceeding further, I think it is important to highlight the CPF schemes, especially for those who just started working. Every month, you and your employer will contribute to your CPF accounts which consist of Ordinary Account, Special Account and Medisave Account.

The current contribution rate totals 37%, with 20% deducted from your gross salary and 17% from your employer.

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Singaporeans should not depend solely on their CPF savings for their retirement

Singaporeans who thought that they can depend squarely on their CPF savings for their retirement need to adjust their mentality. Given today’s high cost of living, that amount of savings would probably last you a couple of years. So, before you and your partner knew it, there might be a need to press the panic button during your twilight years. Also, in today’s society where Singaporeans must compete with cheap foreign talents, all of us must not take things for granted and assume that we would be gainfully employed until the age of 67.

In fact, you are probably just one step away from financial disaster if you are hospitalized in ICU. The medical costs would probably wipe out all your hard-earned savings in your Medisave if you didn’t make a proper retirement plan. Clearly, Singaporeans need to establish alternative pathways to accumulate and build wealth so that we don’t have to suffer the pain of “money no enough” in retirement age.

CPFB employees guiding participants how to use the Retirement Estimator

Firstly, the purpose of this article is not to question nor criticize the merits of CPF. The aim is to highlight to fellow Singaporeans the importance of taking charge their personal finances and empower their future. Far too many young Singaporeans ignore the importance of retirement planning in their prime age and also tend to regard their CPF savings as their sole ultimate saving plan.

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CPF Retirement Planning Roadshows

According to a HSBC survey conducted in 2013, more than 50% Singaporeans felt that they are not planning adequately for their retirement. The study also revealed that poor health and not having enough money to spend in their later stage of lives are among Singaporeans’ greatest fears. The results of the survey are not surprising, given our aging population and high cost of living. If you are not careful with your personal finances in your twenties or thirties, chances are, you might not have a positive retirement lifestyle.

To prepare for retirement, the first thing we must ask ourselves is how much is needed in order for you to feel comfortable in retirement. The amount of money is subjective and varies across individuals but the rule of thumb is that the retirement fund should include your dependents’ needs, traveling, medical and other unforeseen expenses.

Once you establish your desired retirement nest egg, develop the financial roadmap to achieve this goal. For example if you need $2 million to retire, work out the monthly or annual savings you need to set aside. Besides the cash components, acquire income generating assets and passive income investments to support your retirement fund.

A common mistake made by Singaporeans is that we often fail to future-proof our financial planning.

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CPF adjustments

Below is a government press release announcing the changes in the CPF Minimum Sum and Medisave Minimum Sum. The increase in the CPF MS represented a 6.5% increase and the Medisave MS represented a 5.1% increase from 2012. Note that both rates are much higher than the core inflation rates in Singapore 2012.

Whilst I understand that the adjustments are necessary to help Singaporeans meet their retirement and healthcare needs, I question the need to peg the adjustments at a rate higher than the inflation rate.

Why is there a need to set aside so much money in our CPF Retirement and Medisave accounts? Does it really help and benefit Singaporeans? If so, why set so many restrictions for medical claims from our Medisave accounts?

The money in our Medisave Account belongs to us, so why restrict us from using it for medical costs? Obviously I am concerned as I am in my early thirties and at the rate it is going, the Minimum Sums could be half a million by the time I retire. I really hate to think that after slogging for decades, I cannot even touch or smell my hard-earned CPF monies.


CPF Minimum Sum
CPF members who turn 55 between 1 July 2013 and 30 June 2014 will need to set aside a Minimum Sum (MS) of $148,000 in their Retirement Account (RA).

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Retiring in Singapore

Recently, on a flight to Japan for work, I watched Andy Lau and Deanie Ip’s A Simple Life. The heartwarming film is based on a true story of a producer and his servant. It is about a relationship between a young master called Roger (Lau) and the servant of the family who raised him, Sister Peach (Ip). I had a lot of mixed feelings after watching the film and decided to blog down my thoughts.

Just like Hong Kong, Singapore is also facing the ageing population issue. To tackle the “silver tsunami”, the government is currently building up the infrastructure, such as nursing homes, community hospitals, training more nurses, doctors and therapists. But I suppose there is so much our government can do, in terms of hardware.
In Singapore, we are still lacking in software to manage the ageing issue. For example, every now and then, we read in the news of elderly who passed away unknown in their homes. Their decomposed were only discovered after their neighbours reported foul stench to the police. I believe as more and more Singaporeans choose to be single, the issue of providing community support to lone seniors will be a problem in the next few decades.
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