Why SRS accounts are a good way to save

(21-05-2015, 02:13 PM)etan Wrote: This statement is alarming:
Why is this so?

Note 2 : Under the Income Tax Act, where an SRS member dies, any sum standing in his SRS account shall be deemed to be withdrawn ('Deemed withdrawal' amount) on the date of his death even though no physical withdrawal may have been made on that day.

https://www.iras.gov.sg/irasHome/page04.aspx?id=166

i suppose this is only for tax purposes, which theoretically makes sense? it is not as if his money is "gone". His/her living spouse is still able to withdraw the money (lumpsum), less any tax payable.

(20-05-2015, 04:48 PM)Jacmar Wrote:

(20-05-2015, 04:30 PM)pantoo Wrote: Quoted from MOF's FAQ:

How exactly is the withdrawal period determined at retirement?

The withdrawal period starts when you make your first withdrawal at or after the statutory retirement age that was prevailing when you made your first SRS contribution. It will end 10 years from this date.

I think you misunderstood what this means. I still believe you cannot lock in. What this statement means is that if you start your withdrawal at 65, then you last withdrawal will be 75 yrs. At the moment you can start withdrawal at 62. However if tomorrow the govt change it to 66, then that would be the start irrespective of when you start the SRS deposit.

I somehow agree, I think it sounds stupid if different person at same age has different statutory retirement age.

As what quoted by pantoo, I interpret that an SRS member can start withdrawing from SRS account upon reaching the statutory retirement age prevailing when he first contributed into the SRS. It doesn't state that the SRS member is to be considered as statutory retired upon reaching that year.

As what quoted from IRAS:

The statutory retirement age for all SRS members is currently at 62.

I find that the phrase "currently"plays a significant role in this sentence, as it signifies possible changes in the future.

In short, what I am saying is that

(i) whoever contributing the first dollar into his/her SRS account now, he/she can withdraw from SRS upon reaching age 62.
(ii) reaching age 62 doesn't mean that the said SRS member is statutory retired
(iii) assuming that statutory retirement age is changed to 65, the said SRS member can then withdraw from his/her CPF account only when he/she is 65yo.

(21-05-2015, 04:39 PM)pantoo Wrote:

(21-05-2015, 02:13 PM)etan Wrote: This statement is alarming:
Why is this so?

Note 2 : Under the Income Tax Act, where an SRS member dies, any sum standing in his SRS account shall be deemed to be withdrawn ('Deemed withdrawal' amount) on the date of his death even though no physical withdrawal may have been made on that day.

https://www.iras.gov.sg/irasHome/page04.aspx?id=166

i suppose this is only for tax purposes, which theoretically makes sense? it is not as if his money is "gone". His/her living spouse is still able to withdraw the money (lumpsum), less any tax payable.

This is correct, please also see https://www.iras.gov.sg/irasHome/uploade...drawal.doc

(21-05-2015, 04:43 PM)valuebuddies Wrote:

(20-05-2015, 04:48 PM)Jacmar Wrote:

(20-05-2015, 04:30 PM)pantoo Wrote: Quoted from MOF's FAQ:

How exactly is the withdrawal period determined at retirement?

The withdrawal period starts when you make your first withdrawal at or after the statutory retirement age that was prevailing when you made your first SRS contribution. It will end 10 years from this date.

I think you misunderstood what this means. I still believe you cannot lock in. What this statement means is that if you start your withdrawal at 65, then you last withdrawal will be 75 yrs. At the moment you can start withdrawal at 62. However if tomorrow the govt change it to 66, then that would be the start irrespective of when you start the SRS deposit.

I somehow agree, I think it sounds stupid if different person at same age has different statutory retirement age.

As what quoted by pantoo, I interpret that an SRS member can start withdrawing from SRS account upon reaching the statutory retirement age prevailing when he first contributed into the SRS. It doesn't state that the SRS member is to be considered as statutory retired upon reaching that year.

As what quoted from IRAS:

The statutory retirement age for all SRS members is currently at 62.

I find that the phrase "currently"plays a significant role in this sentence, as it signifies possible changes in the future.

In short, what I am saying is that

(i) whoever contributing the first dollar into his/her SRS account now, he/she can withdraw from SRS upon reaching age 62.
(ii) reaching age 62 doesn't mean that the said SRS member is statutory retired
(iii) assuming that statutory retirement age is changed to 65, the said SRS member can then withdraw from his/her CPF account only when he/she is 65yo.

oh no, this post just made it confusing again. lol.

I think in conclusion, we want to know if we are able to "lock-in" the retirement age upon your first SRS contribution.

anyone else?

My suggestion to anyone seeking clarity is to ask the relevant agency directly; and not base it on your own interpretation. I have clarified this before and the answer is that YES - you can lock in your SRS withdrawal at the prevailing retirement age (which is 62 now) by making your first contribution.

Managed to dig out this piece of info on SRS – SRS booklet as of 18/2/2011:
It is very informative.
Look through it if you want to find out more – whether U are Singaporean, SPR or foreigner, it is spelt out quite clearly.
It probably could answer abt 95% of our FAQs, unless your case is unique which will not be covered.

http://www.mof.gov.sg/Portals/0/MOF%20Fo...8Feb11.pdf

(22-05-2015, 03:11 AM)egghead Wrote: My suggestion to anyone seeking clarity is to ask the relevant agency directly; and not base it on your own interpretation. I have clarified this before and the answer is that YES - you can lock in your SRS withdrawal at the prevailing retirement age (which is 62 now) by making your first contribution.

I agree. But I think most of us are also concerned about the withdrawal age for the funds in CPF

I checked from CPF website that it seems that all CPF member can withdraw from CPF partially at age 55 and then on monthly payout basis starting from age 65. So, what is the importance to determine the statutory retirement age then?

Technically SRS has nothing to do with CPF. Retirment age is creeping up so those schemes pegged to statutory retirement age will be impacted. Under new RRA, you cannot force retirement before 62, and option to renew upto 65, and encourage to 67.

(22-05-2015, 01:11 PM)specuvestor Wrote: Technically SRS has nothing to do with CPF. Retirment age is creeping up so those schemes pegged to statutory retirement age will be impacted. Under new RRA, you cannot force retirement before 62, and option to renew upto 65, and encourage to 67.

Sounds strange, meaning to say VBs' dream for early retirement will not be materialised? And if I choose not to work after my 50s, will I be penalised or put into jail?