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Do I Need a PRS if I Already Have an EPF?
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You may have heard the term “PRS” being thrown around in recent years, but what really is
PRS? How is it similar to EPF? Most importantly, do we need to consider having it, even if
we already have EPF?
What is a Private Retirement Scheme (PRS)?
PRS is a voluntary long-term investment
scheme
Similar to the EPF, individuals can contribute to it on a monthly basis
The purpose is to accumulate retirement
savings over the long term
It is privately owned and managed by
financial or wealth institutions
Who is it made for and why?
- It is open to all individuals aged 18 and above including non-Malaysians.
- Designed to help Malaysians invest their money on a regular basis so they can achieve their retirement goals.
I already have EPF. Do I need PRS?
The EPF recently revised its target minimum savings (the recommended amount to have in your EPF at the age of 55 to see you through 20 years of retirement) from RM196, 800 to RM228, 000. As such, active contribution to your EPF alone may not be sufficient for achieving your retirement goal. PRS is a tool you can use to supplement your EPF contribution, by voluntarily saving under a well-structured and regulated environment.
What benefits do I get from investing in PRS?
- PRS offers a choice of retirement funds that you can invest in based on your retirement needs, financial goals and risk appetite.
- Individual tax relief of up to RM3,000 of PRS contribution per assessment year
- If you start early, there is a one-off increase in the youth incentive from RM500 to RM1,000 starting from 2017 with a minimum accumulated investment of RM1,000 over a period of two years.
When should I begin investing in PRS?
The key to getting the most out of your investment is to start early – which is why the Malaysian government is encouraging younger people to invest in PRS as early as they can.
How much should I contribute a month?
You can either make regular contributions or a lump sum contribution with
minimum contribution of RM100.00
| EPF | PRS | |
|---|---|---|
| Sub accounts |
Account 1: Can be withdrawn to invest into authorised investment. Complete withdrawal at 55
Account 2: Can be used to purchase your first home, finance education, pay for medical expenses or for Hajj pilgrimage. Complete withdrawal at 50 |
Sub-Account A:
Sub-Account B
|
| Mandatory contribution |
Yes |
No |
How do I get updates on my PRS account?
You will be automatically enrolled as a lifetime member and will be given an online account that displays your investment details, enabling you to check your transactions and have access to performance reports 24 hours a day at http://www.ppa.my.
How do I get started?
To find out more about AIA’s Private
Retirement Scheme, go to http://www.aia-prs.com.my/en/index.html. Alternatively, explore our A-Enrich Rezeki plan
to help grow your investments for retirement.
References:
http://www.aia-prs.com.my/en/index.html
https://www.imoney.my/private-retirement-scheme
http://www.aia-prs.com.my/en/index.html
https://www.imoney.my/private-retirement-scheme
The above articles are intended for informational purposes only. AIA accepts no responsibility for loss which may arise from reliance on information contained in the articles.
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