PRS: A Tax Saving Tool


Private retirement scheme (PRS) has been around since 2012. Currently, there are nine providers, namely AHAM Capital, AIA, AmInvest, Hong Leong Asset Management Bhd, Kenanga Investors, Manulife Investment Management, Principal Asset Management, Public Mutual, and RHB Am.

To know more about PRS, you may click here.


The main benefit of PRS is its tax relief. Investment up to RM 3,000 is allowed to be deducted to arrive at your chargeable income. It indirectly means that you would get a return equals to your tax rate when you put money in PRS.

However, as this is a unit trust, the unit price will fluctuate, so your actual return will also need to take this into account. Thus, your actual annual return could be higher or lower than your tax rate.


The main disadvantage of PRS is its restriction on withdrawal. As you can claim tax relief on your contributions, there are certain restrictions for you to make withdrawal from the fund, such as an 8% tax penalty and not all savings can be withdrawn. You are only allowed to withdraw without penalty when you reach 55 years old. However, there are certain conditions that allow you to withdraw your money without the tax penalty from the fund. Click here to find out about these pre-retirement withdrawal without penalty.


Have you made nomination for your PRS? If not, it is better to make your nomination now. Your nominee(s) will receive the proceeds from your PRS funds in the event of your passing on. Click here to learn more about nomination on PPA website.

How I invest

I employ dollar cost averaging and top up when the unit price is low. Every month, I will put in RM 200. I plan to top up RM 300 twice per year when the unit price is 5% lower than my cost. If the unit price does not drop to that level, I will top up once in June and once in November. With this plan, I will invest RM 3,000 into PRS in a year.


The tax relief is currently available till YA2025. Thus, take advantage of this tax relief while you still can. Nonetheless, in my opinion, this tax relief is only useful to you if your chargeable income is more than RM 35,000. If your chargeable income is less than this amount, perhaps you should utilise other reliefs first before putting your money into PRS due to its withdrawal restrictions. I also feel that there is no point in investing more than RM 3,000 as we can put the money elsewhere that is more accessible.

How can I help?

If you want to do it yourself, you can approach any PRS provider or go to the PPA website (click here) to enrol or use FSMOne (click here). I recommend you to invest in funds that have 0% sales charge. However, you have to monitor the amount that you put in each year and the performance of the fund on your own.

If you would like some help, I am more than happy to offer my service. I could recommend you the fund that has 0% sales charge and help you on the monitoring part. I will remind you to contribute to the fund on the frequency that you choose and help you to monitor your portfolio. Furthermore, I will also remind you to claim the tax relief for the relevant year of assessment. Besides that, I can help to submit your nomination form. If you are interested, you can click on the button below to leave your details and I will reach out to you.

Disclaimer: This post is for informational purpose only. You should use judgment and conduct due diligence before taking any action or implementing any plan suggested or recommended in this article.

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