Smart move on your Income Tax

8 months ago I shared about the power of Supplementary Retirement Scheme account and was recently been asked….. how good it really is.

  1. It reduces your chargeable income tax while allowing you to invest that supposedly “payable tax amount”
  2. Investments returns in the SRS a/c are all tax-free until the date of retirement and only 50% of withdrawals are taxable.
    • How to not get tax on your withdrawal at age 65?
      • Be unemployed, do not withdraw more than $40k a year, $20k (50% of 40k) is subjected to tax as your chargeable income, you will be in the bracket of non taxable income group.  You can only do this for 10 Years before the account closes.
  3. An additional way to leave something for your family when you passed on
    • Better than CPF, you would be leaving hard cash for them


PeterPan (age 30) earns $50k a year and has a taxable income of $1,250. After learning more about SRS, he decided to contribute the maximum amount of $15.3k. Where he is total chargeable income tax would now be 34.7k.


  • Chargeable Income: $50k
  • Tax : $1,250


  • Chargeable Income : $34.7k
  • SRS Contribution : $15.3K
  • Tax: 364.5
  • Tax Saved : $885.5 / $28,336 (32 years)

PeterPan decided to invest in STI till retirement age 62 with a yearly maximum contribution to his SRS account. He would end up having $1,572,787.24 in his SRS account.


This Scheme really suits couples with low spending habit and would want to leave something for their kids when you leave this earth. If you’re an individual who is thinking about this plan, you do not need to max the contribution amount – $5k/yearly contribution puts u with $512k in your SRS a/c. 

The first $400k is tax-free while the remaining is subject to 50% tax.

There is definitely more than one way to reduce your income tax, but this would probably be one of the easiest ways for everyone.

p.s Know your spending habit before making any financial decision as it plays the biggest part of attaining financial independence.

“+1 Knowledge Point”

Let me know what you think!


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