Why Your SRS Account is Losing Money — And How SRS Insurance Plans in Singapore Can Help

Are you one of the thousands of Singaporeans with SRS money earning just 0.05% interest while inflation quietly erodes your retirement savings? You’re not alone. Many working professionals contribute to their Supplementary Retirement Scheme (SRS) accounts for the tax relief but leave their funds sitting idle in low-yield accounts.

In this guide, we’ll explore SRS retirement planning in Singapore, why low returns matter, and why SRS insurance plans in Singapore are a smart way to grow your retirement savings while enjoying tax benefits.

What is SRS and Why Low Returns Hurt Your Retirement

The Supplementary Retirement Scheme allows Singapore Citizens and PRs to contribute up to $15,300 annually with immediate SRS tax benefits in Singapore. However, most banks pay only 0.05%–0.25% interest per year — barely keeping pace with inflation.

The Cost of Doing Nothing:

• $50,000 in SRS at 0.05% grows to just $50,025 in one year

• With 3% inflation, your purchasing power declines

• Over 20 years, you could miss out on hundreds of thousands in potential returns

Read more: What is SRS and how can I open an SRS account

SRS Investment Options — And Why Many Fall Short

While there are multiple ways to invest your SRS money, not all are ideal for retirement planning in Singapore.

1. Stocks and ETFs

• Potential for higher returns (6–8%)

• Subject to market volatility; not ideal when approaching retirement

2. Unit Trusts and Robo-Advisors

• Professionally managed portfolios

• Fees and market fluctuations can reduce net returns

3. Bonds and Fixed Deposits

• Steadier income, but often low yields (2–4%)

• Inflation can still outpace growth

These methods require active management, higher risk tolerance, and offer no guarantees of preserving capital or providing steady retirement income.

Why SRS Insurance Plans in Singapore Stand Out

SRS insurance plans in Singapore combine growth, protection, and tax efficiency, making them ideal for most retirees who want low-maintenance, predictable outcomes.

Types of SRS Insurance Plans

• Endowment Plans — Capital protection with guaranteed maturity benefits, plus potential bonuses

  • Examples: Manulife ReadyBuilder II, Singlife Flexi Life Income II

• Retirement/Annuity Plans — Guaranteed monthly or annual payouts during retirement

  • Examples: Singlife Flexi Retirement II, Manulife RetireReady Plus III

• Investment-Linked Policies (ILPs) — Flexible investment in restricted funds while enjoying insurance coverage

  • Example: Tokio Marine goElite ILP, invested in Fundsmith Equity Fund

Key Advantages of SRS Insurance Plans

1. Tax-Deferred Growth — Investment grows inside SRS without yearly taxes

2. Capital Protection Options — Certain plans guarantee your principal

3. Guaranteed Payouts — Predictable retirement income

4. Death Benefit Protection — Wealth transfer to loved ones

5. Professional Fund Management — No need to constantly monitor the market

SRS Insurance Strategy by Age in Singapore

• 20s–30s: Focus on growth-oriented ILPs or endowment plans for compounding

• 40s: Balanced plans offering both growth and protection

• 50s+: Annuities or guaranteed payout plans for steady retirement income

The Tax Benefits You Can’t Ignore

Example:

• Annual SRS Contribution: $15,000

• Tax Bracket: 22%

• Immediate Tax Savings: $3,300

If your plan grows at 4%–5% annually instead of 0.05%, over 30 years, that difference can amount to hundreds of thousands more in retirement savings.

How to Start Your SRS Insurance Plan in Singapore

1. Open or Top-Up Your SRS Account — Available with DBS, OCBC, UOB

2. Consult a Licensed Financial Advisor — Match the plan to your age, goals, and risk profile

3. Start Early — Every year of delay reduces compounding and final retirement income

Common Mistakes to Avoid

• Leaving SRS idle — Miss out on compound growth

• Taking too much risk near retirement — Market downturns can hurt

• Ignoring tax benefits — Poor withdrawal planning reduces net returns

SRS Withdrawal Planning: Maximise Tax Efficiency

• Start at age 62 — Begin the 10-year withdrawal period

• Equal annual withdrawals — Spread over 10 years to optimise tax efficiency

• Manage income sources — Combine SRS withdrawals with CPF or other income

• Continue investing — Keep growing remaining SRS funds if possible

FAQ: SRS Insurance Plans in Singapore

Q1: What are the best SRS insurance plans in Singapore?
A: Plans like Manulife ReadyBuilder II, Singlife Flexi Life Income II, and Tokio Marine goElite ILP are popular options depending on your goals.

Q2: How can SRS insurance help with retirement planning?
A: It offers growth, guaranteed payouts, capital protection, and tax benefits — all in one plan.

Q3: What SRS endowment and annuity options are available?
A: Endowment plans provide lump-sum benefits at maturity, while annuity plans offer steady income during retirement.

Q4: How do SRS tax benefits work in Singapore?
A: Contributions are tax-deductible, investment gains are tax-deferred, and only 50% of withdrawals after age 62 are taxable.

Conclusion: From Idle SRS Funds to a Reliable Retirement

Your SRS account doesn’t have to sit idle earning minimal interest. SRS insurance plans in Singapore offer the balance of growth, protection, and tax efficiency, helping you build a stress-free, predictable retirement income.

Bottom line: Start today. Let your SRS work harder, not just sit in the bank.

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