if every year 3% return only also just breakeven, if this goes on in the long run, you're better off putting your money in FD too.

It is mainly for tax relief.

ok fine, got a point. that one immediately got some few hundred bucks back in cash.

but don't forget also, you cannot withdraw the money until you're 55.

so assuming if the tax relief thing is only until 2022 and the gomen didnt extend the tax relief perk.

then your money is stuck in there for another dunno how many years.

let's throw in a scenario, if you're 30 this year and you can still qualify for the tax relief for the next 2 years.

assuming RM3k x 24% tax savings = RM720 per year x 2 = RM1440 for the next 2 years and no more after that.

then assume your fund is stuck inside until you're 55, means 55 - 32 = another 23 years to go.

assuming the fund only make 3%, or 4% which means you stand to gain 1% p.a. for the next 23 years.

wouldn't you be better off in the long run until 55, having your money in the FD with compounding effect than the tax savings + PRS?

This post has been edited by tehoice: Aug 4 2020, 11:04 AM

That's why i said at least 3%, breakeven only n no loss.
I seldom put in FD, most is FI n equity fund, MM only for 😁

--- double post - - - - -

This post has been edited by ironman16: Aug 4 2020, 10:49 AM

That's why must know which fund to buy. Buy lousy fund you get -ve or 2-3% return.

Buy good funds at right time can easily make 10%p.a

That's the main reason I don't simply buy funds.

This post has been edited by Ramjade: Aug 4 2020, 10:50 AM

Good points 👍

but it is pretty difficult to "time" the market, the general idea of DCA is to eliminate all the noises, doing it regularly would smoothen your costs out and at the same time stay invested.
There's this theory where "time in the market" > "time the market", right?


Thanks. Corrected the tax relief of up until 2022.

One must also consider what they're up to.

Like Ramjade rightly pointed out, picking the right fund is very important especially in this PRS because you are going to have your money stuck in there for the next many many years.

unless you only have a few more years left until 55, then you can stand to fully capitalise the tax relief.

Do both. Time your entry and do time in the market. Don't sell.
Buy when everyone and news telling you stock market plunge by XX amount.
You have one year every year to monitor.
I have been doing that every year. Everytime news said trade war getting worse. Market drop by XX amount, I buy.
So far it works wonders.
Everytime they tell you market roaring, green reaching almost all time.high, I stay away.
Timing can never be perfect. You cannot catch the bottom but if you can catch near bottom is good enough.

I don't fear a down market. I welcome it. Cause that's the time to go shopping. Load up on all the discount stocks.

Tax relief is until 2021. 2021 is last year to buy PRS to claim in 2020. Unless they extend.

This post has been edited by Ramjade: Aug 4 2020, 11:23 AM

on that,...
recently there was a forummer mentioned that he is still waiting for the drops and he has until DEC to wait for he expected the mkts would drops

thus i think, DEC is the cut off time (if tax relief is the objective), no matte up or down, by that time, have to go in too

yeah, i've been doing both. with the regular monthly DCA.

plus, buying extra when there's bad news regarding the market. been doing that quite a bit especially in stashaway.

on the tax relief, thanks for the correction, i thought it is until 2022. so in this case until 2021, means the last tax filing to claim such tax will be by April 2022.

those who are going in now just to get the tax relief gotta be extra careful if you don't want your money stuck there for the next many years.

PRS purpose is for retirement, long term investment, same purpose like EPF. A force saving with 3000 tax relief that might help much to certain group of people especially those don’t have self discipline to save for retirement.
Isn’t it better than those force saving plan eg insurance saving plan?

i thought PRS contribution can be stopped anything...thus it is not a forced saving instrument

Yes the top up can be stopped, but cannot take out before 55 (acc1).
Put in FD can be taken out..
For some people they need this type of investment.. tax relief + retirement saving

on that, refer to tehoice post above (the one you replied to)
for his comment about that.

agreed. but gotta bear in mind, picking the right fund is equally important.

The argument was, there's no point if the return of the fund is 3-4% p.a. and you're paying 3% annual fees for that fund. This will kill you in the long run, hypothetically.

Yup. Evey year one have until Dec to take action.

For me I still have money. So I welcome another drop. If another such severe drop happend during Nov/December I got other stuff to deploy it. My PRS for the year already maxxed out.

Max amount to buy in a year is RM3k + RM8 (for annual fees).
Don't exceed that amount.

Yup until 2021 unless they extend it further.
If they extend I will continue buying. If they don't I will bring my money elsewhere. I have already allocated RM3k every year for PRS.

Use FSM or eUT to buy PRS at 0%. So even if the fund is making 3%p.a who cares. You already make money. The thing is avoid paying service charge at all cost.

This post has been edited by Ramjade: Aug 4 2020, 12:27 PM

do take note of this...

so is it recommended to continue contributing after 2022? Since no more tax relief.

i think i will continue, for i am now >55 yrs old.
if i buy CIMB Asia Pac PRS i pay 0%SC
if i buy CIMB Asia Pac ut i pay X.xx% SC

This post has been edited by yklooi: Aug 11 2020, 04:10 PM