Automatic registration as EPF member for Malaysians!

Categories: EPF, Personal Finance

Automatic registration as EPF member for Malaysians! Not immediately lah, when you reach 18.

How many of kopiandproperty.com readers are from Gen-X like me? Yes, the best generation IMHO. When it comes to my first year with EPF, it was way back in 1994. I started working at Parkson after SPM as a retail assistant. My salary then was RM350 per month. Haha. Plus OT etc, RM500 plus per month lah. So, I think at that time, my EPF contribution is maybe RM38.50 per month while my employer would have contributed Rm42. So, in total, I was saving RM80 into the EPF account every month! Well, only for few months.

After that, I continued my studies and I started contributing to EPF again after my graduation. That was just before I was 21 years old, right after I completed my degree from Bristol Business School, UWE, UK.

Article in thestar.com.my. Malaysians who start saving under the Employees Provident Fund (EPF) at 18 could accumulate about RM45,000 more by the time they retire, compared with those who begin at 25.

Licensed financial planner Rafiq Hidayat Mohd Ramli said someone who invests RM100 a month from age 18 could accumulate RM128,000 by 55, compared with RM83,000 for someone who starts at 25.

The estimates assume an annual return of 5% until age 55, although actual EPF returns will vary.

“An employee earning RM1,500 monthly could contribute RM165 to EPF based on an 11% employee contribution rate, while an employer contribution of RM195 at 13% would bring the total monthly contribution to RM360,” he said.

“The key economic advantage of starting early is that young people have time on their side, reducing the pressure to accumulate a large retirement fund within a shorter period later in life.” Read the full article here: Article in thestar.com.my.

My EPF account started when I was 17 years old

If you are 18 this year, very soon you can have an EPF account. Come to think of it, my daughter will have an EPF account in 5 years! Haha. Yes, this is as per Budget 2027 where every Malaysian who’s 18 years old will automatically be EPF member. So, what will happen when one starts to save when they are 18? Of course, the earlier the better! We would not need to rush to save when we are older and then retirement is nearer. Perhaps I need to do what all these financial planners are saying; contribute into my daughter’s EPF account when she reaches 18 lah, even if she has yet to start working.

What about you? Are you also thinking to contribute into your children’s EPF account when they have one at 18 years of age? The dividends are quite healthy. Below would be the past 10 years.