Old post: http://madstranger.blogspot.sg/2012/12/tax-relief-using-srs.html
I had 2 concerns:
1) possible higher income tax rates in the future
2) increase in withdrawal age
Only recently, I realised that the withdrawal age is actually "locked-in" after your first SRS contribution.
The IRAS webpage (http://www.iras.gov.sg/irasHome/page04.aspx?id=1170) stated that:
You can withdraw your SRS monies over 10 years from the date of your first penalty-free withdrawal. Withdrawals are penalty-free only if they take place after the statutory retirement age that was prevailing at the time of your first SRS contribution. The statutory retirement age for all SRS members is currently at 62.
It makes more sense to perform your "first SRS contribution" early to "lock-in" the retirement age earlier before it increases later. For example, if one is to perform his first top-up now, his penalty free withdrawals can start at the age of 62. However, say he decides to start his first top up a few years later and the statutory retirement age is increased to 65 then, his penalty free withdrawal can only start at 65.
Theoretically, even if you do not have the intention to top up the full amount of $12750 now, I believe you can top up a nominal amount as a first top up to lock in the withdrawal age. The IRAS page did not state any minimum amount for this first top up.
With this, one of my earlier concerns on increase in withdrawal age is addressed. I have made my first top up for my SRS account today. As of my other concern on rising tax rates, I need to monitor any tax rates changes in the future.
In the event that there are any major negative changes in the future, I will have to decide if I want to pay the 5% penalty for any early withdrawal. In the meanwhile, I am likely to top up my SRS account on a yearly basis.