Is MY EPF better than our CPF?

 This present CPF was "suan" by Late Ex DPM Toh CC.

I think the EPF is better.  It is more flexible.

1.  Far higher but unsustainably high interest rate at 8.15%.

2. Full withdrawal allowed at age 55.  

3. Case by case basis, it can be  withdrawn before age 55.

4. One can choose not to withdraw after age 55 to enjoy the high interest rate; withdrawal of annual interest is allowed.  You keep what you earn.

If one is able to save RM1M, annual interest earn is RM1,000,000 x 0.0815 = RM81,500 (eye-bogging sum).

5. EPF can be withdrawn for home repayment.

~~~~

From ChatGPT: Malaysia EPF Explained:

The Employees Provident Fund (EPF) is a retirement savings scheme in Malaysia. 

It is a compulsory savings plan for employees, where both the employer and the employee contribute a portion of the employee's monthly salary to the fund.

The main objective of EPF is to help Malaysian workers save for their retirement.

Here are some key points about Malaysia's EPF

Contribution: Both employer & employee make monthly contributions to the EPF. 

The current contribution rate is typically:

11% of the employee's monthly salary for employee & 12% for the employer.

Account Structure:  Each employee has an individual EPF account, where the contributions are deposited. 

The EPF account is divided into two parts: 

Account 1 & Account 2.

Account 1: 

This account primarily holds the employee's retirement savings. 

Withdrawals from Account 1 are generally allowed only for specific purposes, such as reaching the age of 55, retirement, purchasing a house, medical reasons, or emigration.

Account 2:

This account allows more flexibility, and funds can be withdrawn for various purposes, including education, housing, health insurance, investment in approved unit trust funds.

Investment: EPF invests accumulated funds in various financial instruments, such as government bonds, equities, and money market instruments, aiming to generate reasonable returns for its members.

Dividends: The EPF declares an annual dividend based on its investment performance. 

Dividend rate can vary from year to year and is credited to the members' accounts.

Nomination: EPF members can nominate their beneficiaries to receive the funds in the event of their demise.

It's essential for Malaysians to keep track of their EPF contributions and understand withdrawal rules to ensure they have adequate savings for a comfortable retirement.


~~~~

For example,

If one is able to save RM1M, annual interest earn is RM1,000,000 x 0.0815 = RM81,500 (eye-bogging sum) or RM6,800 p.m.

That's why we in SG are thinking and delaying retirement, worry about enough for retirement.

If only G works slightly harder, give us 5% OA interest, we don't even need SA or RA.  Just a MA and OA suffice.

Comments

Post a Comment

Popular posts from this blog

Consideration for MY property Purchase

Consideration for MY property Purchase 1.  Avoid mixed devt; it is difficult to demarcate Hotel, Residential & Mall for Strata Title issue.  Best choice is JB (& Melaka) as more food choices & rentals. (KL & Penang are too far for me to travel, although it's property may have good return value. Need MM2H or else need to return home monthly to renew Visa extension.) 2. Before Strata Title issue, Unit has to pay State Consent every 2-year @RM5k (recently raised from RM3k) to keep unit ownership interim.  When purchasing, bargain for one time payment for State Consent; no need renewal. But easily than said, Developer may not warrant it after 3-year Latent Defect Period (LDP). Not even through legal statements, unless it's first State Consent Certificate does not have expiry date.   Earlier year, new property buy may have such privileges such as Deferred Interest Bearing Scheme (DIBS) loan absorption by developer during construction phrase; so one doesn't
Read more

Can retire with $1k monthly? got bluff me?

  Someone who is my cohort just retired last year.  He candidly shared that his average monthly expenses is less than $1000. Some background that I gathered: 1.  Married with a working adult child. 2.  Stay in condo; ever spinned n profited from few property sales. 3.  Still need to support aged parent with 4 siblings. 4. No car. So I did some quick calculation to see sure or not to retire with $1k monthly expenses. Think his $1k p.m. is thin retirement. Utility & PS, water : $100 p.m. Telco: $20 p.m.  MCST: $200 p.m. (where got so low maintenance?) Medishieldlife: $800 / 12= $66 p.m. (can pay by CPF-MA) H&S Shield Plan: $1200 / 12 = $100 p.m. (excluded $680 deducted from MA) Support his parents: $2000/5 = $400. Basic fixed monthly overhead:  100+20+200+100 + 400 = $820 With just $1000 p.m., net available for meal = $1000 - $820 = $180 p.m. (or $6 per day) Not forgetting that he just retired, he need to fully pay his last year personal income tax. ------ In summary, my assessme
Read more

Buying insurance for Children

During my time as first-time parent, we are blur blur general direction in investment and protection.  That was in the last 90s then. We bought whole life insurance (dont know and dont care about ilp or tradition); at that time, no one talked much about Term insurance.  No such things as TermLife. And... my monthly pay was less than $2,000. And CPF did  not allow topup to child SA.  I remembered that this was introduced in 2013 under a "Others" category.   I quickly made my first $10k topup to their CPF SA, each to my child; over n over the next decade.  At that time, one kid had yet even had her nric; hence I wouldn't check if the cheque topup into the CPF SA was really deposited.    Very chuang. Do make your own decision, I am no insurance agent. If I were you, I would do this: Pt1: Your child has to be covered under both parents' Company Dependents Health Benefits.  First basic protection from Day 1 till their age 21.  (Caveat: Buy when no medical loading. Touchwoo
Read more