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Why I invested in Private Retirement Scheme (PRS)?

a signboard with the word retirement and money symbol.

If you’ve read my earlier post, you will know that I had made my first Private Retirement Scheme (PRS) investment in December last year.

I read from The Star Online that, as of 31 August 2013, there were 36,663 PRS contributors. Seems like not so many are interested to invest in PRS.

Or perhaps the figures had significantly increased by now?

Why I Invested in Private Retirement Scheme (PRS)?

Personally, there are 2 reasons why I invested in Private Retirement Scheme (PRS):

1. Individual income tax relief

The income tax relief is the main attraction. Initially, there is a tax relief of up to RM3,000 per year for taxable income for the first 10 years starting from the assessment year 2012.

Then, in 2021, the government further extend the RM 3,000 tax relief until the year 2025.

The tax saving from RM3,000 can be quite a significant amount. Anyway, as long as there is a good incentive from the government such as tax relief, it is a good thing.

2. To compliment my EPF savings

One thing I am very sure of is that I cannot rely on my EPF savings alone for my retirement planning. And I am definitely sure, my EPF savings will not be sufficient to support me and my lifestyle in my golden years.

So, this PRS investment is an add on to my existing investment portfolio. It is also a force saving for me. Hopefully, over the years, my PRS investment will grow into a significant amount.

Furthermore, I have options to move my PRS investment within the same investment house or a different PRS approved investment provider. This is quite a flexible thing.

A final thought on the Private Retirement Scheme (PRS)

The above are the 2 reasons why I invested in PRS.

How about you? Do you invest in the Private Retirement Scheme (PRS)? Feel free to share your view and comment below.

Read more: Malaysian: Having enough for retirement

photo credit: 401(K) 2013 via photopin cc

1 thought on “Why I invested in Private Retirement Scheme (PRS)?”

  1. While your principal is not guaranteed in PRS, it is still a good effort.At the very least, you are thinking about your retirement and worry about your EPF fund being insufficient. That itself helps you to be more rational when managing your everyday finance. There are still many people out there that spends more than what they earn, go into debts and worse still,end up being bankrupt.


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