which company is best to the the prs scheme? i need one badly to reduce rm780 for my tax payment

is the money secured?

anybody here already enter PRS at age 25? need to wait 30 years for maturity? PRS is like non - liquid unit trust right?

The best return PRS as i see today is CIMB-Principal PRS Plus Asia Pacific Ex Japan Equity. 2nd is Hwang PRS Growth.

Should be secure as this is govern under Bank Negara.

You still able to draw from Sub Account B subject to 8% tax penalty. Else wait until retirement at age 55.

i thought retirement change to 60.

8%

even account B is only 30% of your invested money...so the 70% already locked down until age 55... :S

thanks

how to apply for CIMB-Principal PRS Plus Asia Pacific?

can do it online via cimb clicks?

really confusing this prs

somemore only 10 yrs
cannot decide want to invest or not!

But the CIMB and HWDBS are actually Unit Trust right?? So the price can go up, but it can also come down.

I heard some PRS from Great Eastern Assurance - the Great Retirement Plan - return is like guaranteed.
A friend has bought it and showed me this:

Pay RM3000 x 10 years from age 51 - age 60.

GE will pay you back at age 61 to age 70 at RM4012.5 per year for 9 years.

Total invested RM30k, total received back RM36112.50.

The return seems very low, i dont know how to calcultae compund interest. but seems much less than if we put in FD 3.5% also will get back more that!



I am looking for better return PRS schemes, not the UT type as we may end up losing our money.

That is not a PRS, it's an Annuity.

Understanding Annuity

This post has been edited by creativ: Mar 22 2013, 11:58 AM

Oh my mistake. Thanks for pointing out that is not PRS.

I heard either PRS or Annuity, if we buy RM3000 a year, we are allowed tax deduction? Can someone please confirm this.?

The aim is to get tax relief of RM780 per year.

yes, it is. the tax reduction is Rm3000 max yearly

Why do you say GE pays back for 9 years? Isn't 61 to 70 = 10 payments in total? And if each payment is RM4,012.5 then total 10 payments = RM40,125?
Anyway, even with 10 years of payback, the Net Present Value analysis is negative. This is before factoring any tax relief. You will have to do your own NPV analysis by factoring your individual tax savings to see if it's worth investing in this annuity.

This post has been edited by simplesmile: Mar 23 2013, 11:23 AM

i think it is payback for 9 years not 10, so total put in 30k , total get back RM36112.50.

Pay every year RM3000 from now(2013 ) for 10 years (till 2022) , then wait till 10 years later (2023) only start to get back RM4012.50 per year for next 9 years(till 2031).

Tax relief RM780 per year for 9 years = RM7020. LHDN website said can deduct till 2021 only.

Can help to calculate worth it or not?

This post has been edited by guy3288: Mar 23 2013, 11:56 PM

If the payback is only 9 years, then with the tax savings you get a positive NPV. However, in my opinion the NPV is too small for a 19 year investment.
Also, the NPV reduces when the interest rate rises, while the NPV increases when the interest rate falls.

You might do better by investing in Conservative PRS funds.

Does anybody know how I can upload a .ods/.xls/.xlsx file? LYN seem to tell me that "Upload failed. You are not permitted to upload a file with that file extension."

zip the file & attach or use googledocs & share the link

Here's the attachment of the .xls and .ods file. They are the same except with different extensions.
Anyway, you can try to change the numbers and see the change in NPV. This is just a simple analysis assuming same tax savings (will the highest tax bracket reduce in future?), same interest rate (will interest rate rise and fall in these 19 years?)
Also, like you stated earlier, if you started late then you would not be able to enjoy the 10 years tax savings, so you can also remove some tax savings and see the impact on NPV.




Thanks for letting me know.

This post has been edited by simplesmile: Mar 24 2013, 02:37 PM


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Hello simplesmile, thanks for showing the calculation.

I am not familiar with the NPV , can i confirm with you?
With a positive NPV that means if i buy that Annuity, it will give a nett return better than if i were to keep that money in FD at 3.5% pa rate?

If that is the case i will seriously consider buying it. But you also said i could do better if i were to buy the conservative PRS funds. Which one do you recommend? I mean there are AmMutual PRS, Public mutual, CIMB, RHB - which particular one is a better bet?

thanks for your opinion.

PS: But the GE Great retirement plan is all capital and annual payback guaranteed, safer and lower return never mind
The PRS UT is not guarantedd right? May lose capital and may also make more, not really my choice.

This post has been edited by guy3288: Mar 25 2013, 09:01 AM