No longer an either-or question, instead it is more of a balancing act between paying off debts and saving for retirement.

MANY of us want to save for the future but there may be an array of commitments holding us back.

This could be anywhere from an increase in the cost of living to loan repayments for our education, home or even car.

Striking a balance between paying off debts, which feels more urgent as opposed to saving for the future – especially for retirement – which might hold less urgency seem like an impossible feat.

However, Principal believes that you don’t have to choose. No longer an either-or question, instead it is more of a balancing act.

Here’s a sneak peek at five ways you could make saving for the future a present habit:

1. Focus on your cashflow

You might want to consider first figuring out your incoming and outgoing cashflow. This is so that you know exactly how much to set aside for debt repayment and savings for retirement.

Document your household expenses and look for ways to free up money each month to put toward debt reduction or savings. Look at recent bills, bank and credit card statements, to give you the real data.

Besides that, any additional income will come in handy. Many opt to start freelancing or side job for extra money.

Maybe you can be a maths tutor, make jewellery for the local art fair or join the ranks of e-hailing drivers. Not sure where to begin, just hop on to your favourite search engine and type “side hustle ideas” to get started.

2. Beef up your savings

Keep long-term savings at the top of your mind.

This can be useful when you are faced with immediate actions – like debt repayment or lifestyle inflation – as building liquidity while paying down debt is helpful.

Therefore, set aside a comfortable amount towards your retirement accounts and leverage on compound interest as even a small bump in your retirement plan deferral can make a big difference over time.

3. Make debt reduction a priority

With all said and done, paying off your debt as soon as you can, will be beneficial in the long run.

So, start early and chip away at your debt repayments by prioritising your debt.

First, make a list of debts from the highest interest rate to lowest.

Then, pay off the highest-interest credit cards and loans first. Pay more than the monthly minimum on these.

Meanwhile, continue to make at least minimum payments on the rest.

Once you’ve paid a debt, consider putting that same monthly amount toward retirement savings.

‘What’s important is to have a long-term view, so you really do not need to worry too much about markets’ short-term volatility,’ says Munirah.‘What’s important is to have a long-term view, so you really do not need to worry too much about markets’ short-term volatility,’ says Munirah.

4. Be cautious about credit

If you carry a credit card balance, work toward paying off your credit cards.

However, if you are essentially debt-free, consider continuing to use credit within reason. This is because not using it may damage your long-established credit score and make it harder to get financing when you really need it.

5. Talk to a financial adviser

To plan for your future, you first need to know where you stand financially.

A professional advisor will know how best to help you start your retirement planning journey.

Alternatively, you can start by knowing how much you need to set aside monthly using the Private Pension Administrator calculator (

Make saving for the future a habitAnother way you could start saving for retirement now is by taking advantage of the Private Retirement Scheme (PRS) available to you.

PRS is an initiative under Malaysia Capital Market Masterplan 2 to accelerate the development of the private pension industry. It is regulated by the Securities Commission and administered by the Private Pension Administrator (PPA).

PRS is a voluntary investment scheme to complement your Employees Provident Fund (EPF) to boost your total retirement savings. It is split into two accounts:

> Account 1: 70% of your contribution goes into this account and can only be withdrawn when you reach retirement age at 55.

> Account 2: 30% of your contribution goes into this account and allows you to make pre-retirement withdrawals, subject to conditions, for housing, education and medical.

What’s more, when choosing to save more for retirement with PRS, you receive a variety of benefits such as additional tax savings, where you can enjoy up to RM3,000 per year on personal tax relief – for contributions into the PRS and deferred annuities effective from years of assessment 2012 to 2025. This is on top of the RM6,000 per year tax relief for the mandatory retirement savings contribution and life insurance premiums. This could be as much as RM840 per year depending on your income bracket.

If you choose to enrol in automated investments via your employer’s payroll deduction; it allows you to “set-it and forget it” with a minimum contribution of RM100 per month. What’s more, you will benefit from the power of compounding on your investment returns.

While there are many ways to save, Principal Malaysia chief executive officer Munirah Khairuddin shares her tips on savings and investing with Principal’s PRS.

“Start small. But as your salary or income grows yearly, incrementally increase your contribution to RM250 or RM300, for example. Depending on the compounded annual returns, you could potentially have up to RM150,000 in 20 years.

“What’s important is to have a long-term view, so you really do not need to worry too much about markets’ short-term volatility. Just focus on setting aside those regular monthly savings and invest more, whenever you have extra cash to build your future nest,” she says.

Helping people achieve their financial goalsPrincipal is a company that understands retirement and its customers desires to achieve their financial goals.

It provides its customers with choice and convenience. You can opt between conventional and Islamic private retirement schemes and even have your pick of a variety of funds that best meet your goals, risk tolerance and time horizon.

With PRS, you can update your investment choices as and when desired, automate investment via regular monthly contributions or even opt for a lump sum contribution. You get to determine how much and how often you want to contribute.

As a joint venture between Principal Financial Group – a Fortune 500 and Nasdaq-listed global financial services company with more than 140 years of experience and expertise in investment, retirement and insurance solutions – and CIMB Group Holdings Berhad – one of South-East Asia’s leading universal banking groups – Principal helps individuals and companies build and protect their financial well-being through innovative ideas and real life solutions that help customers make financial progress, no matter their income or portfolio size.

To learn more, visit

Disclaimer: The information in this article has been derived from sources believed to be reliable, however, we do not independently verify or guarantee its accuracy or validity. It contains general information only on investment matters and should not be considered as a comprehensive statement on any matter and should not be relied upon as such. The information it contains does not take account of any investor’s investment objectives, particular needs or financial situation. Investors should consider whether an investment fits their investment objectives, particular needs and financial situation before making any investment decision. ​

The data presented is for information purposes only and is not a recommendation to buy or sell any securities or adopt any investment strategy. This material is not intended to be relied upon as a forecast, research, or investment advice regarding a particular investment or the markets in general, nor is it intended to predict or depict performance of any investment. ​

All expressions of opinion and estimates in this article are subject to change without notice. This article is not intended to be, nor should it be relied upon in any way as a forecast or guarantee of future events or investment advice regarding a particular investment or the markets in general.

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