While most of us already know what is Private Retirement Scheme (PRS), how about the RM500 PRS Youth Incentive? If you never heard of, you should understand it before regretting. If you already heard of, have you grab it? If no action taken yet, why?
Unveiling the BEST investment in Malaysia...
Announced during the 2014 National Budget by our Prime Minister last year, in order to encourage more youngsters to kick start their retirement savings via PRS, a one-off RM500 incentive will be given to them. We have compiled some questions posted to us and get the answers from Alex Yeoh, a licensed financial planner and corporate PRS adviser:
What is PRS youth incentive?
It's a one-off RM500 incentive if you fulfilled the following criteria:-
~ Malaysian
~ Participating in the PRS Scheme from 2014 to 2018
~ Minimum RM1,000 is made within a calendar year
~ Aged between 20 to 30 years old when contribution is made
Who can qualify for this PRS youth incentive?
Malaysians who are aged between 20 to 30 years old (have not reached the 31st birthday) when the contribution is made.
The minimum investment of RM1,000 must be made one-off ?
No. You can accumulate it within any calendar year between 2014 to 2018 in a SINGLE PRS fund, provided that your age is still eligible to do so.
My employer does contributing to my PRS account also. Can it be counted to get the incentive?
No. The minimum of RM1,000 contribution must be from individual level.
Do I have to apply for the incentive?
No. It's automatically done by PPA and PRS providers. They will monitor the eligible accounts, compile a listing of those qualified and notify the relevant government department for the incentive.
How do I receive the RM500 incentive?
It will not given directly to you. Instead, it will be credited into your PRS sub-account A of the qualified PRS fund. Then, it will be converted into units of that fund.
How often the RM500 incentive will be paid?
Payment will be made on a bi-annual basis and PPA expects to receive and process the pay-out within 3 months from the cut off date of 30th June and 31st December. Example, if you contributed RM1,000 by December 2014, the RM500 incentive will be credited into your PRS account by March 2015.
If I contributed RM1,000 each year in 2014 and 2015, how much incentive can I get?
The incentive is on a one-off basis. Meaning each eligible contributor can only get the RM500 incentive ONCE in their lifetime.
Since the eligible period is until year 2018, why should I start now?
You can start late. The different is you will get the RM500 incentive late also. In order to let your money grow with compounded return, is it better to start early? Definitely earlier is better...
Any advice to our readers here?
Alex Yeoh: "The incentive makes PRS even more attractive now on top of the tax relief (up to RM3,000 per year) being given. My advice to you is to grab it while you are still eligible. Not everyone can get it, and worst still some of you knew this thing late and missed out. With 50% guaranteed return if you invest with a minimum of RM1,000, was there any better investment?"
With this, Finance Malaysia hope the above explanation could help readers to understand more and share it to your friends, especially those approaching 31st birthday. Once again, we like to thanks Alex Yeoh for his valuable input. You may contact him via email alexyeoh@vka.com.my for more info. Thanks.
