Fundsupermart: PRS Campaign 2019: Receive RM40 Touch 'n Go eWallet Reload PIN

Receive RM40 worth of Touch ‘n Go eWallet Reload Pin when you invest a minimum amount of RM3,000 in one PRS Fund in a single transaction via FSMOne from 11 October 2019 till 13 December 2019.

Link to info

Hello sifu2, what is the worse that could happen to the money you put in PRS if the fund is not performing? I just want to know what could be the worse case scenario since need to put the money until at least 55 years old to actually see the fruitful returns.

Not sifu.
Your money perform worse than EPF/FD.
Thus incurring opportunities cost and your money gets eaten by inflation.
Opportunities cost here means money that can be put into EPF/FD earning more returns are earning lesser because of buying wrong fund.

But then again with only max amount of RM3k/year to put in and tax relief up to year 2021, damage won't be so great.

PRS funds are allowed to do switching to other PRS funds
Investors are advise not to buy and forget about it until 30 yrs later.

If my understanding is correct, we won't lose the original money that put in if the fund is not performing right? Unless we choose to do pre-retirement withdrawal from sub-account B which is subjected to 8% tax penalty.
Also, saw the info about tax relief could be extended beyond 2021 https://www.ppa.my/e-learning/prs-tax-relie...ed-beyond-2021/

You can lose by
1) fund keeps getting -ve returns yearly
2) opportunity cost (eg money in epf can be earning say 5% a year and the fund only makes 1% a year). So couple that with inflation, you get less value for money.

Ok I got it, thanks for the explanation.

Hi guys,

Budget 2020 did not announce about this but is the rm3k tax rebate still applicable? I heard it is limited years only right?

Yes. Until 2021. If nothing mentioned for budget 2022, no need to buy anymore in 2022.

This post has been edited by Ramjade: Oct 14 2019, 07:32 AM

SO far I haven't invested PRS. Is it worth to only buy 1 yr assuming they will discontinue the benefit in 2022?

what is your tax bracket? how much will you be able to save from taxes?

20% tax. is it ok?

if only buy 1 yr @ 3k.....you save RM600 tax
the if PRS funds is annualised at 4.5% ROI pa and if other investment is 6% ROI pa
1.5% of 3k is RM45 x 13 yr = 585

abt 13.3 yrs to breakeven at RM600 if you get to invest a 6% ROI like ASB..
so if RM45 x 20 yrs = RM900 that is > the RM600 tax saving...

so it depends how long in PRS and is there a 1.5% ROI pa or more investing vehicle out there over the PRS fund per year...

Your choice. You like to keep money to yourself or you like to give money to govt.

For me as long as the money still belong to me, I am more than happy to find ways to pay less tax. Again the choice is yours.

1.5% seems low I think stock market can hit easily from dividend shares

I mean since im already budget for retirement if its worth to invest only 1 yr then its ok.. same purpose and get more value.. but if its not worth of cos I prefer keep myself lol

You need to count in returns form tax relief + fund returns.

This post has been edited by Ramjade: Oct 15 2019, 09:42 AM

will the annual maintenance fees by kenanga for OnePRS growth fund reduces the profit earn annually??

Is already counted into the NAV (price).

This post has been edited by Ramjade: Oct 18 2019, 02:29 PM

so basically once you buy there will be no hidden/maintenance charges until your retirement withdrawal?

Rm8/year if you decide to topup.

Yearly maintenance fee counted into the diary prices. As long as you buy the fund, annual fees still jalan despite how the fund perform.

That's why very important to pick good fund. No point paying fund manager if don't do their work well.

This post has been edited by Ramjade: Oct 18 2019, 02:47 PM