Retirement Planning | Malaysia Financial Blogger | Financial Freedom Ideas

EPF Employee Contribution Rate Revert to 11%, Good or Bad?

Before that, our government allow employee to reduce their EPF contribution from 11% to 8%. However, start from this month, the EPF employee contribution rate will back to normal which is 11% while their employer’s contribution rate still remains at 12% of your monthly wages. Thus, you can now enjoy total of 23% EPF contribution of your monthly wages.

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Our government can make such decision due to the recovery from bad economy which you can see from different sector such as banking, employment and production.

I will strongly agree with the move as you can have huge benefits from the big picture. The reduction of EPF contribution rate will increase the employee’s disposable income and this will increase their spending as well. In the other words, they are spending their future money instead. Subsequently, they will less money for retirement. Not only that, you will also need to pay more income tax as you have higher income.

Why Our Government Increase the Rate from 8% to 11%?

January 2nd, 2011 | 1 Comment

How to Calculate Singaporean CPF?

Singapore’s CPF (Central Providend Fund), is different from Malaysia’s EPF. It provides many working Singaporeans with more sense of security in their retirement. Do you know why?

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Under this CPF Contribution Scheme, you will be deducted 20% of your total wages to CPF monthly contribution.

Let’s take an example, if you are Singapore permanent resident with total wages $3,000, then the calculation will be:

December 25th, 2010 | Leave a Comment

Malaysians Do Not Have Good Retirement Planning?

Have you ever thought of how much is needed for your retirement? According to the survey by AXA Retirement Scope 2010, most of the Malaysian seems like very aware of the amount of money that they will get after retirement. Actually, this is a good sign as you still know exactly how much you will earn or get after your retirement.

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However, there’re many Malaysian do not start their retirement preparation early. Based on my analysis, there’s only 5% of total number of Malaysian are prepared for retirement. And, there are almost 80% of the working adults which in the age range of 25-34 years old think that they are too young to think about retirement, or some of them tend to believe they have enough as they have their EPF savings.

November 26th, 2010 | 3 Comments

How To Calculate Your EPF Dividend?

As everybody known, the Employees Provident Fund (EPF) declared 5.65% of dividend for the financial year 2009. In order to be smart and calculative in personal finance matters, understanding the calculation of EPF dividend is an essential part of the learning process.

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EPF’s dividend calculation is not that straight forward. I’m sure still many of you do not know how to calculate EPF dividend. Most of the people will take the total contribution of that particular account and just multiply with 5.65% dividend. If you’re one of them, then this is a good chance for you to learn from mistake.

The following is my calculation of the dividend:

August 27th, 2010 | 1 Comment

EPF Death Withdrawal

Nominate Beneficiary

Most of the time, we are highly urged to name our nominees because the process of withdrawing EPF savings will not be as simple but may be more time- consuming. When there is no nominee, the EPF will pay the savings of the deceased member to the next-of-kin. He or she may apply to withdraw the deceased member’s savings by producing the following documents:

* Member’s death certificate
* Applicant’s identification card
* Letter of Administration which is produced by the High Court
* Documents that verify the applicant’s relationship with the deceased
* Marriage certificate
* Children’s birth certificate (if any)
* Personal savings account passbook

Payment will be made to the next of kin and is subjected to the member’s total savings as follows:

i) Member’s total savings is less than RM2,500
- All of member’s savings will be paid in full.

July 13th, 2010 | 3 Comments

How Much Can Withdraw from EPF Account II for Purchasing House?

Based on the EPF retirement plan, money accumulated in an EPF savings account II can only be withdrawn when members reach 50 years old, and they may allow to withdraw only 30% of their EPF, members who are 55 years old or older may withdraw all of their EPF.

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EPF Account II Withdrawal at Age 50 Years

EPF allows you to make one shot withdrawal at the age of 50 years. In the other words, you are allowed to withdraw all your savings in Account II in order to help you prepare for your earlier retirement.

There is no restriction on how your money going to use. But, it is advisable that you use the money wisely and do not spend the money away, else you may not be able to achieve the kind of retirement life that you wished for.

Applications to withdraw can be submitted 6 months before reaching age 50 years. And, payment will only be processed after you reached 50.

Eligibility for Withdrawal:

You can withdraw your savings in EPF account II to finance the purchase of a house. If you obtained a full housing loan (100%), you are eligible to withdraw as much as 10% of the price of the house or the balance available in Account II, whichever is lower.

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If you purchased a house by cash, you are eligible to withdraw as much as the price of the house with an additional 10% of the price of the house or the balance available in Account II, whichever is lower.

July 4th, 2010 | 4 Comments

How If Employer Not Paying You EPF?

If you noticed that your employers did not contribute you EPF then you can report it to the Labor Office. You are advised to check your EPF account regularly, which you can do that by visiting the KWSP office, EPF smart kiosk, and online through EPF i-Account. This way will be more secure than printing details of your pay slip.

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Employee Provident Fund (EPF) provides the retirement fund for Malaysian employees, and can also be used for other financial purposes including down payment for buying house, education payment, medical payment and so on.

It is their responsibility to contribute for employees’ EPF savings else the following legal actions will be taken on them:

* Fine not more than RM 10,000 or Jail Sentence not more than 3 years or both.
* The company director passport will be held in order to prevent them from leaving our country.

When EPF Contributions Must Be Paid?

June 5th, 2010 | Leave a Comment