Rosnah Ahmad, 63, retired in September 2026 after 30 years as a school operations manager. She has $300,000 in her Supplementary Retirement Scheme (SRS) account, no other taxable income, and has reached the penalty-free withdrawal age fixed by her first contribution. Her bank's withdrawal form asks how much she wants to take out, and she had planned to take all of it at once to clear the last of her flat loan.
The SRS lets Singaporeans defer income tax. Contributions reduce tax in the year they are made, investment returns inside the account are not taxed, and tax is paid when the money comes out. Only 50% of a withdrawal made at or after the statutory retirement age is taxable, and members can spread withdrawals over ten years.
Taken in ten equal withdrawals of $30,000, Rosnah's $300,000 attracts no tax. Taken in one year, it costs $12,450. The sections below set out the withdrawal rules, the tax at each withdrawal size, and the exceptions for illness and death.
How Are SRS Withdrawals Taxed?
According to the Inland Revenue Authority of Singapore (IRAS) page on tax on SRS withdrawals (checked 27 September 2026), the taxable amount depends on when and why the money is withdrawn.
| Type Of Withdrawal | Amount Subject To Tax | 5% Penalty? |
|---|---|---|
| On or after the prescribed retirement age (Rosnah) | 50% of the withdrawal | No |
| On medical grounds | 50% of the withdrawal | No |
| In full on terminal illness | 50% of the withdrawal less an exempt amount of up to $400,000 | No |
| On bankruptcy | 100% of the withdrawal | No |
| Lump sum by a foreigner after at least 10 years | 50% of the lump sum | No |
| Before the prescribed retirement age | 100% of the withdrawal | Yes |
Source: IRAS
The taxable part is added to the member's other income, such as employment or rent, and taxed at the resident rates (checked 27 September 2026). A withdrawal is taxed in the Year of Assessment (YA) after the year it is made. The SRS operator reports it to IRAS, so Rosnah does not declare it herself.
When Can She Withdraw Without A Penalty?
A withdrawal is penalty-free from the prescribed retirement age. This is the statutory retirement age in force when the member made the first SRS contribution. IRAS gives that age as 64 from 1 July 2026, and it is legislated to reach 65 by 2030.
The age is fixed at the first contribution. A member who first contributed when the statutory retirement age was 63 can withdraw penalty-free from 63, even after the age rises.
From the first penalty-free withdrawal, the member has ten years to withdraw the balance, and contributions stop. If Rosnah makes her first withdrawal in October 2026, her ten years run to October 2036.
How Much Tax Is Payable At Each Withdrawal Size?
The table assumes ten equal yearly withdrawals, no other income and no reliefs. It applies the resident rates to the taxable half of each withdrawal, and it ignores investment growth during the ten years.
| Yearly Withdrawal | Taxable (50%) | Tax A Year | Balance Withdrawn Over 10 Years | Tax Over 10 Years |
|---|---|---|---|---|
| $20,000 | $10,000 | $0 | $200,000 | $0 |
| $40,000 | $20,000 | $0 | $400,000 | $0 |
| $50,000 | $25,000 | $100 | $500,000 | $1,000 |
| $60,000 | $30,000 | $200 | $600,000 | $2,000 |
| $80,000 | $40,000 | $550 | $800,000 | $5,500 |
| $100,000 | $50,000 | $1,250 | $1,000,000 | $12,500 |
| $150,000 | $75,000 | $3,000 | $1,500,000 | $30,000 |
| $200,000 | $100,000 | $5,650 | $2,000,000 | $56,500 |
Source: IRAS resident tax rates from YA 2024
Rosnah's $30,000 a year sits between the first two rows, with $15,000 taxable and no tax. Larger balances pay more. At $150,000 a year, the taxable half is $75,000, the first $40,000 is taxed $550 and the next $35,000 is taxed at 7%, so the tax is $550 + $2,450 = $3,000 a year.
Read Also: Singapore Income Tax Rates For YA 2026
Three Ways To Withdraw Her $300,000
The timing of withdrawals changes the tax more than the 50% concession does. These figures use the resident scale, with no other income and no reliefs.
| Withdrawal Plan | Chargeable Income | Tax | Penalty |
|---|---|---|---|
| $30,000 a year for 10 years, from the retirement age | $15,000 a year | $0 | $0 |
| $300,000 in one year, at the retirement age | $150,000 | $12,450 | $0 |
| $300,000 in one year, before the retirement age | $300,000 | $40,550 | $15,000 |
Source: IRAS
The one-year and ten-year plans both use the 50% concession, so the $12,450 between them comes from spreading alone. The early withdrawal, which Rosnah avoided by waiting for her retirement age, would have cost $40,550 + $15,000 = $55,550, or 18.5% of the balance.
How Does Other Income Change The $400,000 Limit?
In an IRAS worked example, a member with $400,000 withdraws $40,000 a year for ten years. Each year, $20,000 is taxable. That is the top of the 0% band, so the member pays no tax in any year. IRAS describes $400,000 ($40,000 × 10 years) as the amount a member with no other taxable income and relief can withdraw tax-free.
Rosnah's balance is below that limit, so if her investments grow, she can raise her withdrawals towards $40,000 a year and still pay no tax. Other income in the withdrawal years lowers the limit, because rent, a part-time salary or a taxable pension fills the low bands first. Her former colleague Mr Lim has $20,000 of net rent a year, so he pays 2% on the first $10,000 of taxable SRS money a year and 3.5% on the next $10,000.
SRS withdrawals also count as income for a retiree's family. The IRAS parent relief page (checked 27 September 2026) includes SRS withdrawals in the dependant's annual income. A parent whose income passes $8,000 a year stops qualifying for parent relief, and a child supporting that parent can lose a relief of $5,500 or $9,000.
Rosnah's son Hafiz claims $5,500 of parent relief for her and his top tax band is 7%. In each year she withdraws $30,000, he loses relief worth $5,500 × 7% = $385, or $3,850 over ten years. That is still well below the $12,450 she would pay on a single withdrawal.
What Happens At The End Of The Ten Years?
Any balance left after the ten-year period is deemed withdrawn. The SRS operator reports 50% of the cash, investments and surrender value of insurance policies to IRAS, and that amount is taxed in the following year.
Life annuities bought with SRS money are treated differently. The ten-year period does not apply to them, and 50% of each annuity payment is taxable for as long as payments continue.
Read Also: SRS Or CPF Cash Top-Up: Which Cuts More Tax In 2026?
Medical Grounds, Terminal Illness And Death
A member who is physically or mentally unable to work, or who has a terminal illness, can withdraw at any time. Half the withdrawal is taxable and no penalty applies.
From YA 2016, a full withdrawal on terminal illness, or the balance deemed withdrawn on death, receives a tax exemption of up to $400,000. In an IRAS example, a member who died with $200,000 in SRS and no earlier penalty-free withdrawal had no taxable amount, because $200,000 is below the $400,000 exemption.
How Foreigners And Permanent Residents Are Taxed
There is no withholding tax on withdrawals by Singapore citizens such as Rosnah. For foreigners and permanent residents, the SRS operator withholds tax at the non-resident rate of 24% on the taxable part, and deducts the 5% penalty on an early withdrawal.
A concessionary withholding rate of 15% applies if the member withdraws no more than $200,000 in the calendar year and has no other income that year. Withholding tax is not the final tax, and a member assessed as a resident can apply for a refund of the excess.
Read Also: Work Out Your Household's Income Tax And Reliefs In Cashmere Pocket
Which SRS Members Pay The Least Tax?
Rosnah withdraws $30,000 a year for ten years and uses her CPF savings and cash for the rest of her flat loan. She pays no tax on the $300,000, against $12,450 on a single withdrawal, and Hafiz gives up $385 of tax savings a year.
Members who reach the prescribed retirement age with a balance of $400,000 or less, and little other income, can usually withdraw everything without tax. Members with rental income like Mr Lim, a pension or children claiming parent relief on them pay more, or cost their family a relief. The best plan depends on each member's balance, other income and the year of the first contribution.