By MoneyBees
Plan SRS withdrawals over the 10-year window: tax year by year with half of each withdrawal taxable, the S$40,000 tax-free amount and when to start.
With no other income, about S$40,000. Only half of a withdrawal made after the statutory retirement age is taxable, and the first S$20,000 of chargeable income is taxed at 0%. Other income in the same year uses up that band first.
Up to 10 years, counted from your first withdrawal without a penalty. Whatever is still in the account at the end of the 10th year is treated as withdrawn, with 50% of it taxable.
Spreading usually costs less, because each year's taxable half starts again from the 0% band. S$400,000 taken at once makes S$200,000 taxable in one year and S$21,150 of tax. Over 10 years with no other income it can be tax free.
The 10 years start from your first withdrawal without a penalty, so you can wait until your income drops, for example after you stop work. Withdrawals before the statutory retirement age are fully taxable and carry a 5% penalty.
It is set by the date of your first contribution: 62 if before 1 Jul 2022, 63 from 1 Jul 2022 to 30 Jun 2026, and 64 from 1 Jul 2026.
In the year of assessment after the year you withdraw, at resident rates and together with your other income for that year.
Yes. Money still in SRS can keep growing while you draw it down, which raises each withdrawal. The planner sizes equal withdrawals that empty the account in the years you pick.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).