Does SRS ever not make sense?

It depends.

Generally, for women who intend to have kids, it most likely won't make sense because the Working Mothers Relief will help them hit the 80k max relief cap very very quickly. They are unlikely to get further relief from SRS. For women, doing RSTU to max out your reliefs is probably the way to go.

For men, generally with CPF and various reliefs, you probably hit 30+k. There's still a wide gap between 30+k to 80k. The question then generally evolves to do Retirement Sum Top Up (RSTU, or voluntary top-up to your SA account), or SRS.

The next question is your income level when you hit the 62 +/- age. Will you still be working then? If so, at what kind of income? 50% of SRS withdrawals are non-taxable, so that means you only need to consider your income then + the SRS withdrawal, minus your reliefs. Withdrawal of all SRS funds (over ten years) can further complicate the calculations.

To put simply, if your withdrawal age starts from 62, and then

At 62, fully retired with no job, and only 50% of withdrawals are taxed, you could pay next to nothing or a few hundred dollars of tax on withdrawals up to 40k (the tax rates change).
As 50% of 40k = 20k, based on current tax rates, you pay 0 tax. If you withdraw 60k, then about 10k starts attracting tax and you pay 150. If you withdraw 80k, then 20k is taxable, and your total tax is 550 (assuming tax rates dont change). Even this works out to be 550/80k or 0.69% tax only. You probably still saved in taxes compared to not doing SRS (not forgetting time value of the tax relief you enjoyed).

The tax issue becomes a problem if a) you are still working when you withdraw from SRS, and b) you are a superb investor able to make your SRS contributions multiply by several times.

But the tax is a 1st world problem - ie you pay taxes when you earn good money, or in the latter case are a good investor. The lousy investor may have lost more in the market than the tax reliefs he enjoyed.

If you are scared of paying more taxes, then the easiest way is don't work when you withdraw from SRS. Assuming you don't work and tax rates don't change, if you withdraw 160k, then the tax payable on 80k is only 3,350. That still works out to be 3350/160k = 2.1%.

If you are withdrawing 160k over 10 years, aiyo, you must have at least 160k x 10 = 1.6 million in your SRS... How easy can you feel not paying tax on 1.6 million?

Tax is a good problem to have (compared to losing money).

SRS is a deferred tax system. So in order to use it properly, a number of conditions need to be satisfied. btw, do contribute $1 to have slightly better flexibility for withdrawal (especially if you want to lock in 62 years old withdrawal

(1) you gain nothing if you have no income tax to pay. why lock your money in this case?

(2) the gains are less than the penalty should you choose to withdraw. hence minimum, I would advise people to contribute only if you are at least 7% tax bracket

(3) You will almost confirm save tax when you are at the 11.5% tax bracket.

(4) It is fine to draw 60k or even 80k from your SRS account (which means up to 600k to 800k in SRS is fine). The tax is really marginal (total tax rate on top of it is only 2% of the 10k, and 3.5% of the 10k)

(5) I have not even touched on the time value of money for tax save currently compared to the future. If you save 11.5% tax now, and you put the tax you saved into CPF 4%, it grows to 22% in 18 years time).

E.g you draw 60k. only 30k is income tax assessable. 20k is non-taxable, for the next 10k, you only pay 2%. $200 income tax.

E.g you draw 80k, only 40k is income tax assessable. 20k is non-taxable, for the next 10k, you only pay 2%. for the final 10k, you only pay 3.5%. $550 income tax.