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Introduction

If you’re serious about retiring comfortably in Malaysia, you’ve probably heard of EPF. But there’s another powerful tool that most Malaysians are either unaware of or underutilising: the Private Retirement Scheme (PRS).

Think of PRS as the EPF’s cooler, more flexible cousin. It doesn’t replace EPF, but it complements it. And it could mean the difference between just surviving retirement… and actually enjoying it.

In this post, we’ll break down PRS in simple terms, what it is, how it works, and why it could be the secret sauce in your retirement plan.

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1. What is PRS?

PRS (Private Retirement Scheme) is a voluntary long-term investment scheme designed to help Malaysians supplement their retirement savings.

It’s managed by approved providers like:

• Public Mutual
• Kenanga Investors
• Affin Hwang
• Manulife
• Principal Asset Management

🧠 Quick Summary:

• Voluntary (not compulsory like EPF)
• Choose your provider + fund
• You contribute as much or as little as you like
• Locked in until age 55 (except under certain conditions)

🧾 Approved and regulated by the Securities Commission Malaysia, so it’s legit.

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2. How Does PRS Work?

Here’s how the PRS system is structured:

Component	Explanation
Account A (70%)	Locked until age 55. Cannot be withdrawn early (except death or serious illness)
Account B (30%)	Can be withdrawn once a year, but subject to an 8% tax penalty
Fund Types	Choose between conservative, moderate, or growth funds, depending on your age and risk appetite
Contributions	Voluntary. You decide how much and when to contribute

📌 Unlike EPF, there’s no employer contribution. This is entirely on you.

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3. Why Should You Care About PRS?

Let’s be real, EPF is not enough for most Malaysians.

Here’s why PRS is worth considering:

✅ Boosts Retirement Savings

Adding PRS to your retirement strategy increases your total pool of long-term savings, which is essential for keeping up with inflation and rising healthcare costs.

✅ Enjoy Tax Relief

You can claim up to RM3,000 per year in tax relief for PRS contributions (until 2025*).

💡 If you’re in the 21% tax bracket, that’s RM630 in tax savings annually.

✅ Flexible & Customisable

You can:

• Choose your fund manager
• Pick your risk level
• Contribute monthly, quarterly, or whenever suits you

✅ Compound Growth

Start early and PRS can grow exponentially over 10 – 30 years. The earlier you begin, the more you benefit from compounding returns.

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4. Who Should Consider PRS?

PRS isn’t for everyone, but it’s perfect for those who:

✅ Want to supplement their EPF savings
✅ Are self-employed, freelancers, or business owners without EPF
✅ Earn above RM60,000/year and want extra tax savings
✅ Are in their 30s to 50s and still have 10 – 25 years before retirement
✅ Are serious about not being financially dependent on kids or government aid

❌ If you’re struggling with debt or lack emergency savings, sort those out first before committing to PRS.

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5. How to Start a PRS Account (Step-by-Step)

Step 1: Choose a PRS Provider

Compare:

• Fund performance
• Fees & charges
• Online access or mobile apps
• Fund types (Islamic, conventional, aggressive, etc.)

Popular providers: Public Mutual, Principal, Affin Hwang, Kenanga, Manulife, AmInvest

Step 2: Select a Fund Type

Most providers offer:

• Growth (higher risk, higher return)
• Moderate
• Conservative (lower risk)

📊 Some even auto-assign based on your age group (default option).

Step 3: Make a Contribution

Start from as low as RM100. You can:

• Set up monthly auto-deductions
• Make lump sum top-ups (especially before tax season)

Step 4: Nominate Your Beneficiary

If you pass away before 55, PRS can be transferred to your named beneficiary—make sure you fill this in properly.

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6. Common Questions About PRS

❓ Can I withdraw PRS before age 55?

Only from Account B (30%) and it comes with an 8% tax penalty. Account A is locked unless:

• You turn 55
• You die
• You suffer from serious illness

❓ What happens at age 55?

You can withdraw your PRS savings tax-free, either in a lump sum or regular payments.

❓ Is PRS risky?

Like all investments, PRS carries some market risk. But you can choose conservative funds if you prefer stability.

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7. Pros and Cons at a Glance

Pros	Cons
Tax relief (up to RM3,000/year)	No employer contribution
Long-term savings growth	Withdrawals before 55 are penalised
Flexible contributions	Some providers charge high fees
Multiple fund choices	Locked-in until 55 (can be a deal-breaker for some)

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So, In a Nutshell

PRS is not a replacement for EPF, but it’s a powerful sidekick.

If you’re self-employed, a higher-income professional, or someone who just wants more freedom in your golden years, PRS deserves your attention.

💬 Investing RM250/month into PRS = RM3,000/year = up to RM630 tax savings annually
And over time, it adds up to serious retirement firepower.

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What’s Next?

🎯 Want to know which PRS provider or fund suits you best?
✅ Book a discovery call and let’s build a retirement plan tailored to your lifestyle and goals.