Getting SRS tax relief for $153,000 and get back $400,000 tax-free!

I was searching online but could not find an answer to my question: How will I receive dividends if I have bought stocks with money from my Supplementary Retirement Scheme (SRS) account?

It is definitely NOT paid to your usual Central Depository (CDP) GIRO account, so you will not have usable cash. The dividend paid shows up as cash available in your SRS account balance, which can be re-invested in more stocks!

Next is the question on what is exactly taxable when we were to withdraw the SRS money at 62?

Dividends are taxed at source (Corporate Tax) and Singapore does not have Capital Gain Tax, BUT when the dividends and capital gains are paid back into the SRS, it will be taxable... I hope I am wrong, but it seems to be that way. Given such a situation, it means that one will probably stop contributing to SRS once the available balance is close to $400,000, based on current tax rates, or whatever the minimum taxable income is when we are 62. $400,000 is the current tax-free break-even point. You can read the detailed illustration on the IRAS page.

Based on a contribution cap of $15,300/year from 2016, an investment horizon of 10 years (provided you start by 37 years old) will easily get back $400,000 (with dividends (5% yield) reinvested and a conservative 0% capital gain included.) If you are 37 years old this year, you are in luck! If you are younger, you probably don't even need to contribute for 10 years.

Supplementary Retirement Scheme (SRS) Account

I had been reading about the mechanics of the SRS account, and I finally decided to open an account and completed my first trade.

Compelling motivations for the decision:

(All calculations are based on present value)

1. Maximum contribution of $12,750/year for Singaporeans, i.e. 31 years of contribution to accumulate $400,000. 31 years is just the ball-park figure for a round number for illustration purposes.
2. Tax relief on contributed amount. The tipping point is actually if you have to pay 7% or more in income tax because if you are in the lower brackets of income tax, the money you keep could probably earn a 5-6% yield in the stock market. If you pay 20% tax, then the savings will be more. How you calculate this is savings is $12,750 x tax %.
3. At retirement age, $400,000 will be distributed over 10 years, which is $40,000/year or $3,333/month. Only 50% of the amount withdrawn are subjected to tax, and assuming tax rates remain, and the first $20,000 are tax-free, then the $40,000 is tax free because 50% is $20,000. 
4. As dividend from SGX stocks are tax-exempted, you can continue to earn dividend as you buy stocks with this money that is locked in the SRS account.
5. If you are terminally ill or disabled and cannot work, you can withdraw all the money at a 5% penalty, before retirement age. It's better than nothing when you are desperate, but health insurance definitely comes first before putting excess money into SRS.
6. No mandatory contribution like insurance premiums. On years where you don't have excess because of unforeseen circumstances, then you don't contribute.
7. Finally, paying stocks with SRS does not incur any additional steps on the online brokerage. 

I bought blue chips with my first contribution to the SRS account and I am looking forward to hatching eggs 30 years later.