Success is in your hand!

Monday, December 7, 2015

1Malaysia Retirement Savings Scheme - EPF for Self Employed

After #YourFinanceDoctor quit from engineering to become #YourFinanceDoctor, one of the biggest concern is to save for retirement on our own. Being self-employed, it is not compulsory to contribute in EPF. Worst of all, self-employed is not getting the contribution from employer as well. So if you self-employed or individual without fixed income, you should read on!  

1MRSS - Specially for Self-Employed!

As you may know, employer contributes at least 13% on top of your own 11% contribution, so that sums up to 24%. So for self-employed like #YourFinanceDoctor, you gotta always remember to save at least 24% on your own as you would not have EPF to cover you at retirement! But thankfully, I came across this 1Malaysia Retirement Savings Scheme (1MRSS) from EPF!

What is 1Malaysia Retirement Savings Scheme (1MRSS)?
I know what you might be thinking, 1Malaysia huh? Is it reliable? Well, 1MRSS is a retirement savings just like EPF to ensure that the self-employed and individuals without fixed income have their own savings plan upon reaching retirement age. It is designed to encourage them to contribute voluntarily based on what they can afford.

Why should I enroll in 1Malaysia Retirement Savings Scheme (1MRSS)?
The only reason #YourFinanceDoctor would apply because of the contribution from the government! In other words, instead of employer contribution, now government become the contributor as well. So apart from the yearly dividend, government will contribute 10% or maximum amount of RM120 effective from 2014 to 2017. The other reason would be the tax relief on EPF portion which up to RM6,000.

How much should I save into 1Malaysia Retirement Savings Scheme (1MRSS)?
The minimum contribution amount is RM50 up to the maximum limit of RM60,000 annually. But if you asked #YourFinanceDoctor, the right amount would only be RM1,200 annually. The sole purpose of RM1,200 into 1MRSS is to earn the contribution of RM120 (10%) from government.

P/S: Of course, if one does not have a proper financial planning, then you should put more in 1MRSS or typical EPF account as it would be more efficient than putting in bank savings account.

Can I see an example of 1Malaysia Retirement Savings Scheme (1MRSS)?
#YourFinanceDoctor invested RM1,200 into 1MRSS in the beginning of 2014. So thru 1MRSS, #YourFinanceDoctor will be entitled for RM120 from government contribution. On top of that, the yearly dividend for EPF in 2014 is 6.75%, so total amount at the end of 2014 will be RM1409.10! That's roughly 17.425% of return! Check out the break down table below!

Am I eligible to apply for 1Malaysia Retirement Savings Scheme (1MRSS)?
You are eligible if you fulfilled ALL the following:
1. Malaysian citizen
2. 'Self-employed' refers to any individuals who are working with income and not an employee
3. Member of the EPF
4. Has registered to contribute in the 1Malaysia Retirement Savings Scheme
5. Minimum contribution payment amount is RM50

(If not yet a member, registration at the EPF counter is required by using MyKad or via mail by submitting the Form KWSP 3 and a copy of MyKad) (Click here to download Form KWSP 3)

AWESOME! I'm interested! How do I apply?
1. Register and submit the Application Form for the 1Malaysia Retirement Savings Scheme (KWSP 16G(1M)) at the EPF counter or via mail. (Click here to download form KWSP 16G(1M))

2. Submit the 1Malaysia Retirement Savings Scheme Payment Form – KWSP 6A(2) form together with the cash/cheque at the EPF counter/mail at the appointed bank agent counters, i.e. RHB, MBB, PBB and BSN. (Click here to download form KWSP 6A(2))

Act fast as 1MRSS only effective from 2014 to 2017! 
3 Years left to earn RM120 per annual from Government!

Earn, Save, Invest, Repeat!
Happy Saving!


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


Feel free to comment! Thank you!

Henry Tan - Your Finance Doctor © 2014. All Rights Reserved | Powered By Blogger | Blogger Templates | Designed by-Dapinder