Tag Archives: Retirement Planning

How to Maximise Your EPF Retirement Savings?

As everybody known, EPF manages its funds with one risk profile and that is extremely conservative. Taking out your money from the EPF to invest makes sense because you can choose a fund that suits your risk profile or investing style.

EPF investment

EPF Investment Scheme allows contributors to withdraw money in Account I for investment purpose. The minimum of savings that can be invested is RM1000 and the maximum amount cannot be more than 20% of the total savings in Account I. However, there’re basic savings rules that you need to follow. Withdrawals can only be done every 3 months which allow you to do dollar cost averaging. 

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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.

retirement planning

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.

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EPF Dividend Rate Drop To 4.5%

EPF Dividend Rate

Employees Provident Fund (EPF) is going to declare only 4.5% dividends for the year of 2008.

I’m quite certain this will raise the dissatisfaction among working Malaysians who work hard for an honest living and will depend on the EPF after they retire from active work.

This is the clear fact that WE ARE IN AN ECONOMIC CRISIS?

However, if you look from different angle of views, this is the rate, which still put EPF at a high position globally when equity and trust funds are giving out insignificant returns on investments. For those who are in the banking sector, we all know that the bank fixed deposits is definitely not as much as EPF’s returns.

Lower EPF Contribution, Good or Bad?

The reduction of the employee contribution to EPF from 11 % down to 8 % will be made automatically, effective from January 2009 until December 2010. The total contribution is still at a reasonable rate of 20%, which is 12% from the employer and 8% from employee. You will have to fill in the forms if need to maintain 11% employee contribution as before.

*Just for your information, EPF has the highest interest rate, follow by Fixed Deposit. Except in 1997 where the Fixed Deposit has higher interest rate than EPF.

epf_vs_fd


Which Option Will You Choose? 11% or 8%?

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