By MoneyBees
Tax on SRS withdrawals: 50% taxable from your penalty-free age of 62, 63 or 64 over up to 10 years, or fully taxed plus a 5% penalty if you withdraw early.
It is the statutory retirement age when you made your first SRS contribution: 62 if that was before 1 Jul 2022, 63 from 1 Jul 2022 to 30 Jun 2026, and 64 from 1 Jul 2026. A later change to the retirement age does not move yours.
From your penalty-free age, 50% of each withdrawal is added to your taxable income. Before that age, 100% is taxable.
5% of the amount you withdraw, on top of tax on the full amount. There is no penalty for withdrawals on medical grounds, on death, in bankruptcy, or a foreigner's full withdrawal after holding the account for 10 years.
With no other taxable income, S$40,000 a year. Half of it, S$20,000, is taxable, and the first S$20,000 of chargeable income is taxed at 0%. Over the 10-year period that is S$400,000.
10 years from your first penalty-free withdrawal. Whatever is still in the account after that, including investments at market value, is treated as withdrawn and 50% of it is taxed.
Yes. The taxable half of your withdrawal is added to your other income for the year, such as rent or part-time pay, so it is taxed at your top rate. CPF LIFE payouts are not taxable and do not count.
In the Year of Assessment after the year you withdraw. Your SRS operator reports the withdrawal to IRAS, so you do not need to declare it.
A lump sum puts a large taxable amount into one year. S$400,000 in one year means S$200,000 is taxable and the tax is S$21,150. Spread over 10 years with no other income, the tax is S$0.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).