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Monday, May 25, 2015

Invest with Your EPF!

Recently with all the news related to EPF such as the Proposal of delaying full withdrawal age from 55 to 60 and even the EPF investment in 1MDB, many people have raised their concern towards EPF. Well, regardless of the speculation, here's one thing you should know - Members' Savings Investment Withdrawal

What is Members' Savings Investment Withdrawal?
You are actually allowed to withdraw a portion of your savings from Account 1 in EPF for investments with the intention to increase retirement savings. But the investments are only limited to funds that are approved by the Ministry of Finance. (Here's the list of Approved Funds)

How Much can I Withdraw?
You could withdraw not more than 20% of savings in excess of the Basic Savings in Account 1. For the Basic Savings, it increases with age starting from RM1,000 at age 18 to RM196,800 at age 55. Refer to the table below.

Example for Clearer Illustration?
As long as your Account 1 Savings is more than the Basic Savings by minimum RM5,000, then you will be able to withdraw that 20% of excessive amount to invest.
Lazy to do calculation your own? Use this online free EPF calculator.

How Frequent can I Withdraw?
Funds can be withdrawn every three months as long as the balance in Account 1 exceeds your Basic Saving requirement. The three months interval is calculated based on the warrant date given by EPF. 

Can I Take Out the Profit?
No. All the amount withdrawn including the profits are required to return back into Account 1 once the funds are sold. After all, the objective is to maximize the retirement savings


Conclusion:
With the minimum basic savings and 20% requirements, the margin of safety is actually quite high. As long as you stick with the investment objective, whereby to maximize your retirement savings, then it should be fine. Bottom line, always invest in funds that generate higher return than EPF (2014 = 6.75%), otherwise what's the point of taking out right? 

To find out more about it, feel free to contact me at henrytcx@gmail.com

Earn, Save, Invest, Repeat!
Till then. Happy Investing! ;)

5 comments:

  1. Always I think that EPF is a good investment :D

    ReplyDelete
    Replies
    1. Yeah because you do not have to do anything right! haha

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  2. i should start learning now~ u shown me a very good example of investment!!! :) thanks

    ReplyDelete
    Replies
    1. yup, you should! anything feel free to ask me. ;)

      Delete
  3. Thank you for sharing such great information. It is informative, can you help me in finding out more detail on Investment Insurance Plan, i am interested and would like to know more about this field and wanted to understand the basics of Best Investment insurance

    ReplyDelete

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