Stopped PRS Investment

In 2023, I have decided to stop investing in Private Retirement Scheme (PRS).

Rationale

Why did I decide to stop? Though the tax relief of RM 3,000 for PRS is extended to 2025, I have concluded that Simpan SSPN Prime is a more suitable vehicle for me to reduce my income tax.

It is not because that the return from my PRS investment is not good (albeit it is not that great in 2022). It is mainly due to the ease of withdrawal. The money in PRS is quite troublesome to withdraw and it might come with a tax bite. On the contrary, the withdrawal from Simpan SSPN Prime is relatively easy. Furthermore, the tax relief offered by Simpan SSPN Prime is higher, which is up to RM 8,000 (available till 2024).

My current plan

Previously, I have dedicated RM 100 monthly to put into my PRS. Besides that, I would also put more money into PRS if the fund price is low. For now, the monthly RM 100 is going to be diverted to Simpan SSPN Prime. Depending on my tax liability, I might put more money into Simpan SSPN Prime too if required. Otherwise, I would dedicate this money into the stock market.

Conclusion

I think my PRS is going to do well in the future. But as I do not have unlimited fund, I have to choose between PRS and Simpan SSPN Prime. Since Simpan SSPN Prime is a more flexible vehicle, it is time for me to stop investing in PRS.

However, if you do not have children and your tax liability is high, PRS might still be a good vehicle to minimise your tax. It all depends on your own situation.