Our Government has taken pains to assure us that changes to the statutory retirement age do not affect the time Singaporeans can withdraw their CPF monies.
This does not always mean that Singaporeans who have been conscientious with their retirement planning would be totally unaffected by these reforms.
Changes in the statutory retirement age affect the Supplementary Retirement Scheme (or SRS) account holders.
As the statutory retirement age will increase from 62 to 63 years old, tax-free withdrawal of SRS can be pushed back by one year if your SRS account is created after 2022. We want to avoid this by preemptively opening our SRS account before 2022.
The primary advantage of having an SRS account is tax relief. You can deduct up to $15,300 from your annual tax bill depending on your income.
For folks in the higher tax brackets, this can be a huge source of savings,