Still got 9 months to go. Singapore is going into lockdown, China got huge bunch of ppl gathering again, expect 3rd wave.

anyone here plan to withdrawl the RM1500 from your account B with each PRS provider?

not me - i'd rather rob my EPF AC2 via LESTARI

PRS = investment, thus.. buy high (earlier), sell low (now)?
nah unless really need the cash flow

i did a brief calculation of how much my account has made (pure profit for 2019), since don't have the actual official numbers on my profit.

The recent market tumbles wiped out all of my profits made for 2019. despite that, when you withdraw, you are merely withdrawing your past years' profit and you still let your capital run in it. at least for my case lah. Yes, now is really a buy high and sell low situation, but my own argument is, look back at the main reason for me to invest into PRS and that is the tax relief of 3k each year.

Now that you're able to withdraw at least some money back at no penalty, why not take this chance and cash it out a little.

so the cash out from account B is merely withdrawing some of the profits that you have made in your past years.

Minus the investment concept, letting the monies remain in your account, be it, EPF or PRS, is because you want to let the magic of compounding to work for your future retirement pot. i assume your EPF will certainly has much bigger pot of money and the compounding effect can definitely works better than your money does in the PRS right? (let's just assume, say 5% p.a. for each).

So let's say you have 2 providers and both also more than RM1500 in your account, won't you withdraw RM3k from PRS instead of EPF?

I bought one PRS fund in 2015. Simple ROI without considering MWA via DCA/RSP effect is close to break even.
If I withdraw RM 1500 now, what profit am I withdrawing?
If settlement date falls at the wrong date, I'm selling the fund in loss.

Am I right?

I am not too sure about your situation, given your scenario, even if you have not made losses, you are withdrawing your capital only, but you lose out on time vs returns lah, after 4 years plus, you didnt get any return for the monies you invested in.

i invested much earlier in 2012/2013 (can't remember which year). i have certainly made profits (simple ROI (didnt really track of its performance)), especially when my investments costs was zero (was with a PRS provider). So for me, i will be withdrawing my profits despite the recent market wiped out all of my 2019 profits.

Don't forget that you have been receiving profit every year in terms of tax relief. Depending on your annual salary, the profit can be from 1% to 26%.

In my point of view, I invest in PRS solely for tax relief benefits. I have other long term investments where it is easier to tweak since there is less restrictions compared to PRS. Furthermore, the PRS fund are mostly focus on Malaysia or Asia Pacific Market, thus limits the choice of investment.

I'm planning to withdraw the 1.5k to invest the money elsewhere. So, i sell the investment low but I get to invest somewhere else at a lower price.

However, I will only go through with it if LHDN don't declare that the tax for PRS is the net flow (deposit - withdraw) like in Sspn.

So we have the same ultimate motive when it comes to investing in PRS, i.e. the tax relief.

given that the tax relief is only up to 2021, will you continue pouring in money starting 2022? I guess the answer is no.

There's no right or wrong. It's just a personal preference.

For me since it's an investment over time horizon, I won't consider tax relief as an input for portfolio gain/loss calculation.

This post has been edited by GrumpyNooby: Apr 8 2020, 12:47 PM

nobody is saying one is wrong. that's why this is forum discussion all about.

tax relief is certainly a gain for you derived from such investment.

it's just like your benefits-in-kind received from your company, it's not cash, but you will still be taxed for those.

similar concept. whether you want to consider that as a part of your taxable income, then that's not up to you.

"Now that you're able to withdraw at least some money back at no penalty, why not take this chance and cash it out a little."
this is not a sure thing yet - LHDN has yet said anything

"so the cash out from account B is merely withdrawing some of the profits that you have made in your past years. "
my POV doesnt jive with such logic,
i simplify to "buy high, sell low"

"Minus the investment concept, letting the monies remain in your account, be it, EPF or PRS, is because you want to let the magic of compounding to work for your future retirement pot. i assume your EPF will certainly has much bigger pot of money and the compounding effect can definitely works better than your money does in the PRS right? (let's just assume, say 5% p.a. for each). "
my POV doesnt jive with such logic too.
what has EPF's bigger pot has anything to do with PRS smaller pot, in context of removing/selling down EPF or PRS?
ie. assuming both same returns as U said, so why would amount in EPF matter to amount in PRS?
logic = ?
5%pa is 5%pa loss on amount taken/sold out, whether or not i took out from EPF or sold PRS $1.5K

In addition - for sure EPF out doesnt impact my tax relief, thus my views on taking/not taking out PRS. It'll be my last card - after robbing:
1. EPF A/C2 via LESTARI & monthly mortgage withdrawal
2. flexi-mortgage prepayments
3. SSPNs

no ultimate right/wrong ya - it depends on one's situation and one's access to tools/knowledge. Best we can do is to make sure the logic & maths is sound.

This post has been edited by wongmunkeong: Apr 8 2020, 12:50 PM

I would like to know if we withdraw RM1,500 from PRS account 2 in 2020, and subsequently perform a top-up self contribution of RM3,000 in Q4 of 2020,... will I still be entitled for a tax rebate on the RM3,000 being top-up made in year 2020?

Yes

PPA said the pre-retirement special withdrawal is going to be tax free:


https://www.ppa.my/wp-content/uploads/2020/...Tax-Penalty.pdf

This post has been edited by GrumpyNooby: Apr 8 2020, 01:06 PM

Hi,

Sorry but I am not asking about it being tax free.

I wanted to withdraw the RM1,500 and later just top up another RM1,500 to make it a sum of RM3,000. This RM3,000 I plan to put back in to PRS to enjoy tax exemption in 2020.

No details yet from LHDN as per the forumer said.
You can wait for LHDN for further details.
Whether the tax relief is going to be RM 3000 or RM 4500 (like SSPN implementation).

This post has been edited by GrumpyNooby: Apr 8 2020, 01:12 PM

just an added note to take note in the link...

"Note: One of the prevailing terms and conditions for pre-retirement withdrawal from sub-account B is still applicable, whereby such withdrawals may only be made from a PRS fund one year after enrolment."

so does it clearly mentioned that, in order to get the tax relief of RM3000 for this year's contribution, does one need to put in only RM3000 or (RM3000 + what ever that had been withdrawn under this special perks)?

Go ask PPA.
I did reply one post above.

ok got your concept.


additional question, i get confused after reading your post or some other posts. Withdrawing from PRS is not equivalent to income right? you're not gonna add this 1.5k into your tax return as income right? it has no more tax implication, right?

ok...note....
so have to wait again for news from PPA/lhdn

you withdraw 1.5k

then later topup 1.5k

how does this equate as contribution of 3k to maximise the tax relief at 3k?

at most is just 1.5k. tax relief is based on your contribution amount and not inclusive of withdrawl i believe.