58 years old used up all EPF savings in 3 years

58 years old used up all EPF savings in 3 years

It is dangerous to suddenly have a lot of money (serious!)

I have shared many times that when I stop working, I intend to keep my EPF savings intact and will just do monthly withdrawal instead. Read below:

“EPF (KWSP) members aged 55 to 59 can apply for the “Akaun 55 Monthly Withdrawal” to receive periodic payments of at least RM100/month, or a minimum total of RM1,200 over 12 months, starting from their Akaun 55 savings.” Full guide from EPF website here.

Maybe this is also because I do not own the latest handphone model… I do not try to show off with a non-national car brand which is suffocating me financially every month… After 30 years of paying for a property, I no longer needed to pay rental… plus I have more than 1 property and I could sell that extra property for funds which I could use for anything of my heart’s desire? This is why I do believe I do not wish to touch EPF savings which receives very healthy dividends every year.

How long can RM700,000 lasts then?

3 years for one 58-year old retiree. Latest viral news as below:

If we withdraw just RM3,000 per month?

If we really do some calculations, RM700,000 could technically last for a very long time if we withdraw just RM3,000 per month. Calculation as below:

RM700,000 minus RM36,000 per year means by the end of the year, there’s still RM664,000. Assuming the dividend is 5.5 percent, this RM664,000 will go back to RM700,520. So, if we really withdraw RM3,000 per month and the dividend remains 5.5 percent, the savings will always be available year after year after year. Savvy?

If we withdraw double the amount; RM6,000 then the calculations as follows:

RM6,000 x 12 = RM72,000 per year. RM700,000 minus RM72,000 is RM628,000 and assuming the dividend is 5.5 percent, then this RM628,000 will grow back to RM662,540. This means a reduction of probably RM40,000 per year from the initial amount. If it’s minus RM40,000 every year, then this RM700,000 should easily last the person maybe 15 years?

If we really have RM700,000 and we really do have some financial sense, this RM700,000 can be stretched tremendously as long as during all the working years, we have bought an affordable place and by the time we stop working, this property has been fully paid. Else, this RM3,000 is unlikely to be enough to sustain all expenses if it has to include rental…

Cheers.

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