The Supplementary Retirement Scheme (SRS) is a tax-advantaged savings scheme in Singapore that encourages individuals to save for their retirement. It was introduced by the government in 2001 to complement the Central Provident Fund (CPF) and to provide an additional source of retirement income.

One of the benefits of the SRS account is the flexibility to withdraw funds at any time. However, there are certain rules and regulations that govern SRS account withdrawals, and it is essential for account holders to understand them before making any withdrawals.

The first thing to note is that SRS account withdrawals are subject to tax. The amount withdrawn will be taxed at the prevailing income tax rates, and the tax will be payable in the year of withdrawal. This means that account holders should consider their tax liability before making any withdrawals and ensure that they have sufficient funds to pay the tax.

There are two types of SRS account withdrawals – partial and full withdrawals. Partial withdrawals allow account holders to withdraw a portion of their SRS funds while leaving the remainder in the account. Full withdrawals, on the other hand, involve closing the SRS account and withdrawing the entire balance.

For partial withdrawals, account holders can withdraw any amount at any time, subject to a minimum withdrawal amount of $1,000. However, there is a 5% penalty on the amount withdrawn if it is made before the age of 62. This penalty is to discourage premature withdrawals and to encourage account holders to keep their funds in the account for as long as possible to maximize the tax benefits.

For full withdrawals, account holders can only make withdrawals after the age of 62. Any withdrawals made before this age will be subject to a 5% penalty on the entire withdrawal amount. Additionally, account holders can only make one full withdrawal from their SRS account, and once the account is closed, they will not be able to contribute to it anymore.

It is also important to note that there are restrictions on how SRS funds can be used. Withdrawals can only be made for retirement purposes, and any funds withdrawn for non-retirement purposes will be subject to a 5% penalty on the entire withdrawal amount.

In summary, SRS account withdrawals in Singapore are subject to tax and penalties. Account holders should carefully consider their tax liability before making any withdrawals and ensure that they have sufficient funds to pay the tax. Partial withdrawals can be made at any time, subject to a minimum withdrawal amount of $1,000 and a 5% penalty if made before the age of 62. Full withdrawals can only be made after the age of 62, and any withdrawals made before this age will be subject to a 5% penalty on the entire withdrawal amount. Additionally, there are restrictions on how SRS funds can be used, and withdrawals can only be made for retirement purposes.