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M40 and B40: EPF’s monthly contribution as a ‘home’ solution?

My personal opinion about our EPF money is to leave it for our retirement. The reason is because I could not afford to have something happening to it. I know, someone wants to tell me that ‘but if you leave it in EPF, you think it’s safe?’ Haha. Briefly, Yes. Unless Malaysia falls into some unforeseen circumstances where even the EPF has to be disbanded, else it is safer to leave it in EPF than any bank, even if it’s the largest bank in the world. Then, the second question, ‘You think EPF returns are better than outside meh?’ Briefly, should be. For the risks vs returns assessment, I would rate EPF as good even if not excellent but definitely not bad. However, the following is an interesting proposition.

Article in here. Malaysian Institute of Professional Real Estate Agents and Consultants deputy president See Kok Loong said that the government’s 1 million homes in 10 years is not a solution for the B40 and the M40 groups. See said that B40 and M40 groups were unable to own homes due to low real residual income. He cited a study by Khazanah Research Institute which showed that real residual income for those earning a household income of RM2,000 and below per month was only RM76. He said, “How can you pay instalments with RM76 per month? No bank would want to give you a loan.”

He proposed that EPF members be allowed to draw from their monthly contributions to pay for monthly instalments. This allows them to own a property and have higher real residual income without having to pay rental. He gave example of calculations.

“The B40 median household income is RM3,000 per month, so their monthly contribution to EPF is RM720. With the RM720 at an interest rate of 4.4% and a tenure of 25 years, the member is eligible for an RM135,000 loan.”

“For the M40, the median income is RM6,275 per month. Their contribution is RM1,443 per month and with an interest rate of 4.4% and tenure of 25 years, they will be eligible for a loan of RM270,000.” Article in here.

Thoughts readers? Actually, I would like to know about the properties which the EPF member could buy for RM135,000 and RM270,000 instead. If the options are really good; feature, size and location, this can be a consideration. The reason is because a good property will always be a good hedge against inflation. Usually, the capital appreciation will beat the inflation and the return on investment will be in the double digits too. Earlier article here. Low risk = low returns? Using our money in the EPF is a big thing. Perhaps more discussion, consultations and negotiations are needed before any decision is made. If they invite me, I would love to join too. 😛 Happy following!

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News article summarised by Dina Batrisyia. Article written and edited by Charles.

written on 27 Feb 2019

Next suggested article: 16% returns per year for 10 years. Looks like a scam but it is not

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Charles Tan The Founder The Writer Kopiandproperty
Charles Tan

Charles is Founder of He writes from his investment experience for the the past 20 years in investments including property, stock, unit trust and more as well as readings and conversations with many property gurus in the industry. is an independent property blog which is not affiliated to any media company, property developer or even real estate agencies.

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