Retirement could be the best chapter of your life when you have the time and resources to do the things you have always wanted to do with the people closest to you. To make that happen, it is important that we start saving for retirement as early as possible and steadily build our retirement funds, which we will depend on for the rest of our lives after our working years are over.
Complementary to the mandatory retirement savings, the Private Retirement Schemes (PRS) is a voluntary saving and investment scheme which is designed to help Malaysians save more for their retirement. To encourage more Malaysians to start saving for their retirement with PRS, an individual who makes contributions to his or her PRS funds is allowed to claim a tax relief of up to RM3,000 per year by the Inland Revenue Board of Malaysia. This tax incentive is definitely a bonus for everyone as you get tax savings deduction (based on your tax bracket) on your PRS contributions.
As an illustration, if you are within the RM50,000 – RM70,000 taxable income with a 16% tax bracket, you stand to gain tax savings of RM480 from your PRS contributions of RM3,000 for 2016. If you have not started your PRS account, it’s never too late as you can start enjoying the tax saving while it is still available. After all, who doesn’t love tax reliefs?
Meanwhile for existing PRS Members who have been contributing in the PRS, it is now easier for you to enjoy your yearly PRS Tax Relief with the introduction of PRS Online Top Up. The online service makes it convenient and hassle-free for PRS Members to top up their PRS funds directly from their smartphone, tablet or computer. Building adequate and sustainable retirement savings for our nest egg requires staying on course to make regular contributions for our retirement while we are gainfully employed. With a retirement scheme such as the PRS, you receive the best of both worlds – gaining annual tax relief whilst saving more for your retirement.
If you have a PRS account, congratulations! Check out our Money Tree if you’re looking for another effortless way to accumulate your wealth.
