For those experienced investor, using SRS monies to invest in shares will certainly have a better return. However, for the beginners, it would be wiser to invest in dividend-yield unit trust.

Info on SRS as follows:

http://www.helium.com/tm/216788

In fact, the penalty is not a lot. For example, if your income are above the 40K bracket, your tax rate will be something like 8.5%. Hence, for every 1K you had put in, it will save you $85 bucks on interest.  ^_^

Just think of it, an additional retirement income will come in handy when you retire. Most of the money in the CPF would had pay for the roof under our head.

http://www.helium.com/tm/216788

I had also done a check from the Ministry of Finance website, the money that place iniside the SRS is meant for retirement. If there is a need, the money can be withdrawn with a 5% penalty.

I think it is still ok. If I place $2000 into the account, invest it with a 10% return. I would get $2200 in 1 year. If I need it, I withdraw $950 instead (5% penalty). I still have $1200 in my account.

Just found out that the SRS can help us to avoid tax legally.... ^_^

Read on

http://www.helium.com/tm/216788