1st December 2022 - 3 min read
Principal Malaysia has launched its Principal RetireEasy funds, described as a first-of-its-kind, end-to-end private retirement scheme (PRS) solution in Malaysia that helps investors conveniently plan for their retirement from the start of their career until their old age.
In a statement, Principal Malaysia explained that the RetireEasy funds are managed towards a particular target date year based on when the investor is expected to start withdrawing money from the portfolio to support their retirement needs. As such, they are designed in a way that caters for an accumulation and decumulation phase, based on the investor’s expected year of retirement.
During the accumulation phase, investors can tap into one of the many RetireEasy Target Date Funds (TDF) available, which invest in different types of investments to accumulate an expected sum by a particular target date, namely the investor’s year of retirement. Using the target retirement date as a guidepost, the investment manager in charge will then periodically adjust the diversification and risk profile to ensure that the investments are helping to meet the investor’s long-term needs. On top of that, the manager will also rebalance the portfolio as necessary to maintain the preferred asset allocation.
Once your RetireEasy TDF matures during your year of retirement, you’ll then be moved into one of the RetireEasy Income Funds instead. This marks the start of the decumulation phase, where you may make scheduled withdrawals based on your needs, while continuing to grow the remaining fund balances to increase the sustainability of your savings.
Chief executive officer and country head of Principal Malaysia, Munirah Khairuddin explained that the RetireEasy funds are devised to help Malaysians invest wisely and conveniently, without incurring excessive risk based on their age range.
“TDF [for instance] are managed toward a particular target date – becoming more conservative near retirement. Generally, the further you are from retirement, the more risk you may be comfortable taking. The RetireEasy TDF investments reflect that, with generally a greater proportion of more conservative investments and fewer aggressive investments over time. As investors age, the RetireEasy TDF progresses with them, without investors having to make adjustments, making them a good option for helping to navigate volatile market environments,” Khairuddin said.
To note, the new Principal RetireEasy funds are available in both conventional and shariah-compliant options. Investments made into these funds also qualify for the RM3,000 tax incentive enabled for private retirement schemes (PRS) investments.
You can find out more about the new Principal RetireEasy funds here.
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