This scheme is not capital guaranteed rite?

How did you calculate this 26% returns per year via income tax? I really dont understand what ure trying to say here.

This post has been edited by cybermaster98: Dec 7 2012, 04:09 PM

Thats wht i thought as well. But he just mentioned 26% which isnt really correct. He's merely saving on the equivalent of a 26% tax on the taxable amount above 100K which equates to RM780 only for the whole year.

But my question is, to get that RM780 tax relief per year, you have to ensure you invest in a PRS fund that gives you back a better return. I mean it would be pointless to invest in something that 'loses' money rite? So although u may be saving RM780 from taxes, you risk losing much more through the investment itself. Is this a risk or am i being too paranoid?

U didnt get what i was trying to say. Of course i know ull get RM780 when u invest min 3K in PRS. Thats confirmed. But what i meant was, you may get Rm780 from the Gov in the form of a tax relief, but if your fund loses money then whatever small amount of tax relief you get will be easily obscured by the loss of your capital investment.

If the fund doesnt give you a positive return, you will be facing big losses overall la. That income tax relief is only worth max RM780 per year for the highest tax bracket. Whats so great about RM780 per year? Thats equivalent to a tax saving of RM 65 per month. How many ppl are in that tax bracket anyway? U gotta be earning more than RM8,300 per month to 'qualify'.

So in short, if your fund loses money then dont dream about having that small tax relief cover your losses. Dont forget that the main purpose of the PRS scheme is for ppl to pump money into our country's financial system. Thats the only way to stay afloat in times of crisis. So basically, the rakyat is helping with a bailout of our financial system. Although not at critical level yet but if both Europe and US remain in recession for 2013, then the domino effect will hit Malaysia.

So dont just blindly invest in any PRS fund. Learn about the fund and its potential before committing. And dont ever be satisfied with a RM65 monthly savings.

The bigger picture would be RM3,000 (min) per annum x say 10 years which adds up to min 30K. Imagine if losses are big and ppl just rush into that just to get a RM 780 per annum 'discount' on tax. We're not just talking about not making a profit or cutting even, but actually losing.

Im not kiasi and neither am i against investments. I have heavy investments in properties, gold and also unit trusts. All im saying is that ppl (especially those who dont have much to spare) shouldnt blindly rush into PRS schemes without considering the risks.

This post has been edited by cybermaster98: Dec 10 2012, 05:32 PM

Dont the 2 statements actually contradict each other? How could they claim to 'preserve' capital for the retirement needs of investors and then say its not 'capital guaranteed'? We all know the PRS scheme is not capital guaranteed.

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Added on December 11, 2012, 8:29 amWho's worried? Im discussing the merits of the PRS.

If its worth my while, i might consider investing in it. Not just for the RM780 discount but for future growth and to diversify my investments.

This post has been edited by cybermaster98: Dec 11 2012, 08:29 AM