“Malaysia increased the national minimum wage in May 2022 by 25 percent from 1,200 ringgit (US$273) to 1,500 ringgit (US$341), however, employers with less than five employees were granted an exemption to the hike until January 1, 2023, before being extended again to July 2023.” (Full article here: aseanbriefing.com)
This was the news about the request for another round of EPF withdrawal due to effects from Covid-19. EPF savings as collaterals but no withdrawals The government was very firm and Prime Minister Datuk Seri Anwar Ibrahim later said that eventhough further withdrawal is not allowed, it is possible for the EPF members who needs the funds for emergency purpose to use the EPF account 2 as collateral for loans. This was the news: EPF Account 2 can be used as loan collateral Yes, topics concerning EPF is always followed very closely by kopiandproperty.com If you like to continue receiveing this news as and when it happens, sign up for free here.
If we take these two and we combine the info, then RM2,208 divided by 4 persons meant that this household has RM552 per person in the household. Fortunately it’s a household, so whether rental / home loan repayment is just one person and not all. Meanwhile cooking at home will lessen some of the burden versus eating outside. Nevertheless, it’s not a good life and Statistics Department classified any household with RM2,208 as living under poverty line.
If you have been reading kopiandproperty.com for some time, you may notice that I usually use 15 years as a benchmark for the years we will need money for post-retirement. I always assume we would work until 60 and then live to 75 years old. That’s 15 years post-retirement where our funds, whether inside the EPF or in our bank accounts or even in the form of properties should be enough to cover our expenses when our income has stopped. Now, let’s look at some numbers. Real ones as at currently. One major cause is definitely Covid-19. Fortunately it has passed the most dangerous stage, I hope.
Article earlier for reference: EPF savings as collaterals for loans Briefly, Prime Minister Datuk Seri Anwar Ibrahim today clarified that the plan to allow Employees’ Provident Fund (KWSP) contributors to use their savings as collateral for loans would not involve any withdrawals from their savings. Now, we have news that the EPF is ready to implement this EPF Account 2 for loans and they have finalised the mechanism and the terms and conditions for EPF members who want to do so.
In order to benefit from this article, you need to be an EPF contributor first yeah. As for EPF, much has been said about the recent RM500 being deposited by the government to EPF contributors who have too little money in their account. Some said that EPF members should be allowed to do another round of withdrawal. Some say it is irresponsible to allow that because these savings are meant for retirement days. Well, the debate rages on but for all other contributors, did you know that you could estimate how much total EPF money we have when we retire?
EPF is a form of retirement savings. In other words, it should just be used after retirement. Okay, I also agree that if should also be called upon in times of emergency. That’s why I am on the side of no blanket EPF withdrawal. Please be reminded that when people withdraw their funds suddenly, EPF would have to liquidate some of their investments quickly, whether or not they have profit or loss.
When I started working, there was one particular month which due to an unforeseen circumstance, I had just RM20 and it was 5 days till salary day. I was already a working adult and thus did not want to ask my parents for money. Those 5 days were tough because I needed to go to office. I needed to go out for lunch which I did not and gave excuses to my colleagues and drank just the Milo provided in the office. For breakfast, it was Gardenia bread and for dinner it was the same. It was a feeling I would not wish for anyone at all.
This was a super big news before it was announced; so many media outlets were predicting the potential number. It was also hotly discussed after it was announced. Some say it’s low, some say it’s respectable. Some say it could have been better IF… Regardless, here’s that article on the details of the announcement by the EPF just a few days ago.
When the government first allowed EPF withdrawals, I was against it. Even from the FB comments and my conversations, it is safe to say that many of the ones saying they will withdraw since it’s allowed do not need it in the first place. To these people, the withdrawal either gives them money to invest (which is great) or the extra money to spend (which is bad). These people are not the actual target of the ones in need of funds during the pandemic. The real target were these people; people who needs the money for emergencies.
This statement has been mentioned to me many times by many different people. In actual fact, EPF has given me one of the best returns for many years and for recent years, the returns are higher than my FD returns and higher than the home loan repayment interest which I have to pay. There’s no guarantee it could be the same in the future but my wish is for this to continue and remain as high as possible.
If this is a question for me, “Should I withdraw my EPF before 55?” My answer is a simple one, NO. My main reason is because EPF savings is really for post-retirement, when our active income has stopped or has gone down significantly versus the time when one was still working full time and thus has monthly income. In fact, I would like to leave the savings in EPF inside EPF as long as possible so that I have something to fall back upon.
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