PRS offers different schemes for varying risk appetites and goals which you can choose from. This is the key difference and advantage of PRS compared to EPF. The default fund option is an age-based allocation, where the prevailing investing strategy is based on the life goals and risk profiles at different life stages. With EPF, you don’t get to choose how you want your money to be invested for growth. EPF members are guaranteed a minimum annual return of 2.5%* (for the Conventional Account). By choosing your PRS fund allocation, you could potentially earn a higher return (with higher risks, of course).
There is no such thing as over-saving for retirement. Many people still wind up with a shortfall in retirement savings with just their EPF savings alone. In fact, more than half of EPF members who are around retirement age do not have enough savings to last their retirement**. Investing in PRS is another way to build up your wealth for retirement that can bring you even higher returns and greater control. You should start saving for retirement as early as possible, to take advantage of compound interest.
Another bonus is that PRS contributions are claimable up to RM3,000 under individual tax relief***. This relief has been extended until the 2025 tax assessment year. That means that for the next five years, you could save yourself RM3,000 annually in taxes paid – that’s an extra RM3,000 that you can channel into more savings or other investments!
