Benefits of SRS
Benefits of SRS
SRS stands for Supplementary Retirement Scheme and it is a voluntary program offered to employees in Singapore so they can save more than their usual contributions under the Central Provident Fund. Savings under the CPF is usually
enough to cover basic expenses upon an individual’s retirement. These expenses usually include housing, grocery, and medical bills. But through the SRS programs, employees can opt to save more and beyond their standard CPF and get various benefits including the following:
1. More savings
The basic point of saving for retirement is to have enough money to go about one’s daily activities when an employee retires from work. For some people, whatever they contribute to the CPF as mandated by law may be enough. But for those who wish to have basically more money by the time they retire then voluntarily participating in the SRS program will help them get what they want.
2. Tax relief
Additional contributions made to one’s retirement fund are non-taxable. Whatever additional amount is saved for future retirement won’t be subject to tax at the time of contribution and this is great news for the long term. Less of the retirement income will be taxed if the employee contributes more to his own fund under the SRS.
3. Bigger retirement fund
With additional contributions, an employee’s retirement fund will also literally get bigger. And by the time retirement comes, those contributed under SRS will also be taxed less which will further make the retirement fund even bigger. One can even choose to have more tax savings if the withdrawal of the retirement fund is staggered for a 10-year period rather than withdrawing the money all at once.
People who may seem to have a little extra from their salaries are the best candidates to participate in the Supplementary Retirement Scheme. After all, everybody wants to have a decent living once retired and one way of ensuring it is to have more savings through the SRS.Benefits of SRS