SRS Tax Savings for a $120,000 Income Earner in Singapore

At $120,000 chargeable income, a 38-year-old sits at the top of the 11.5% band, and saves exactly what someone on $100,000 does. Contributing the full $15,300 SRS cap saves an estimated $1,760 in income tax this year, cutting the effective tax rate from 6.6% to 5.2%. The figures assume $120,000 is chargeable income (after CPF relief and other reliefs), stays flat, and the full cap is contributed every year.

The whole $15,300 comes off income taxed at 11.5%, so every dollar contributed saves 11.5 cents of tax.

Contributing every year from age 38 to 64, the penalty-free age for anyone making a first SRS contribution from 1 July 2026, and investing at an assumed 5% annual return, grows the account to an estimated $821,138: $397,800 of contributions and $423,338 of investment gains. Left in cash at typical SRS interest of about 0.05%, most of those gains disappear.

Withdrawn evenly over 10 years from 64, that is $82,114 a year, of which half ($41,057) is taxable. That costs about $624 a year, an effective 0.8% on each withdrawal, against the 11.5% marginal rate saved on the way in. Total withdrawal tax comes to roughly $6,240.

Over 26 years of contributions, total tax saved is about $45,747. After withdrawal tax, SRS itself leaves you roughly $39,507 better off. The investment gains are not really an SRS benefit: Singapore does not tax capital gains, so you would earn similar returns investing the same money outside SRS, without the lock-up until 64.