Will you be "SRS-ly" ready for your Retirement?

Updated: Nov 24, 2021

Today marks the first day of my Supplementary Retirement Scheme (SRS) Account opening after many years of contemplating. I have never get down to opening one (even though it is a matter of second of clicking) because I'd hate the idea of being penalized for withdrawing MY OWN hard earned money that I would have parked aside for retirement if I were to make withdrawals before the statutory retirement age.

But, today I changed my mind after understanding some recent updates to the statutory retirement age. The statutory retirement age is currently being set at 62 years old and is expected to increase to 63 years old in 2022. Hence, your statutory retirement age for penalty-free withdrawal is based on the statutory retirement age prevailing at the time of your first contribution. If this is not a good enough reason to take action today, I cannot find another better compelling motivation to do so? Or is it?

To sweeten the whole SRS deal, DBS is offering cash gifts for new opening of SRS account. I have visited the 3 agent banks that offer the setting up of SRS account - DBS, OCBC and UOB. So far, I can see that by far, it makes the most sense to open an account under DBS because they are offering a cash incentive to do so right now.

After scourging through their terms & conditions (you can find it here), I personally find it most "worth it" to pump in $10,001 (I'll explain why the awkward $1 later on) into my newly set up SRS account as DBS is offering a $50 cash gift for a minimum $10,000 deposited via digibank (it seems that opening via digibank is a must based on their wordings on their website). Also, they are offering additional cash gift if you invest funds from your new SRS Account to purchase any investment of minimum S$1,000 based on the following tier:

a. S$1,000 to S$5,000 Investment Amount OR; $30 OR;

b. >$5,000 to $10,000 Investment Amount OR; S$40 OR;

c. >$10,000 Investment Amount : S$50

Total cash gift is capped at $100.

You see, to qualify for the additional $50 cash gift, the investment amount has to MORE than $10,000. Hence, to "play safe", I deposited $10,000 + $1. After all, why not right?

You may find more information via their website here.

Among the terms & conditions that I have scourged through, below are some key points to note (TLDR below for you:)

  1. the Cash Gift is limited to the first 4,000 Qualified Customers only;

  2. Cash gift will be credited by 28 February 2022;

  3. the Eligible Contribution must not be withdrawn at the time of crediting the Cash Gift or DBS reserves the right to forfeit the Cash Gift;

  4. Annual SRS contribution limits apply (Singaporean/PRs: S$15,300 and Foreigners: S$35,700);

  5. Eligible Investment refers to the purchase, of minimum S$1000, which:

i. is available with SRS;

ii. is funded from the new SRS Account via any product provider/platform/channel (need not be purchased with DBS/POSB);

iii. excludes purchases that are terminated and re-purchased; and

iv. is recognised after the free-look/cancellation period (i.e., free-look of 7 days for Unit Trust and 14 days for Insurance)

So... I have opened a SRS account. What's next?

I have went to explore my options to qualify for the additional $50 cash gift. I enquired with one of the endowment policies provider that I am aware of right now that is offering a reasonable rate - Etiqa - which is offering a 1.62% 3 year endowment single premium plan. But to my disappointment, they do not accept SRS. In fact, their CSO responded that they do not have any endowment policies right now that accept SRS funds.

I went on to explore DBS own website. My goal was to find a product that is "simple" (my own definition of simple is that it carries as little risk as possible and earns me a high-savings-account-equivalent-kinda rate and accepts single premium). And I chanced upon this SavvyEndowment 6 product under "Apply/Insurance/New".

After the transfer is done, I received an email from Manulife (the insurance policy is underwritten by Manulife) on the successful inception of my policy.

And da - da! I was all done for the whole SRS set up and investment!

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I hope this article can help address some of the questions that you might have. This is not a paid/sponsored post. However, please note that this is not financial advice or solicitation of investment. Please do your own due diligence before committing to any financial products.

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