Malaysian EPF
All employees in Malaysia have a retirement fund called Employee Provident Fund aka EPF. The purpose of the EPF is to help Malaysian to have a saving account for retirement. However, there are also self-employed provident fund from private sector. The purpose is the same, saving for retirement.
There are two accounts in the EPF. Account I will be strictly meant for retirement which make up of 70% from your monthly contribution. Account II can be withdrawal during pre-retirement which make up of 30% from your monthly contribution. It is essential to accumulate at least RM120,000 in your Account I during retirement age.
Employee Provident Fund is the fruit of contribution from two parties, employee and employer. Start from January 2009. employees contribute 8 % of their monthly salary while employer pay 12% of the entire employee monthly salary. This make up total of 20%. The 8% contribution is started from January 2008 until December 2010 as stimulus package from government to encourage Malaysian to spend money. However, in Budget 2010, employees contribution will revert to original 11% start January 2011.
30 years plus of saving for retirement. So, do you think that money saved is enough for a retired employee? For me, it is definitely not enough for retirement. It is just a backup plan for you retirement plan. It cannot be your core retirement plan. One need to have their own plan for retirement besides EPF.
I’ve extrapolated – my EPF $ should last me forever… as long as I die within 10yrs after retirement bwhahaahha.
Seriously though, it should last quite long IF i pump it into mutual funds and manage them well – much better than the crap EPF is giving us, 4%-5%pa on average.
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Mrcoolku Reply:
November 12th, 2009 at 8:13 pm
4-5% is really not a lucrative return. We actually getting 1 or 2 % only after consideration of the inflation rate or maybe negative rates. If I am a professional investor, I also want to invest myself. Too bad, I am just average. So better keep it to them for manage. Make it totally passive income.
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Forget about the fact that wheather the EPF fund could contribute to whatever situations you are in,in the future,because
‘Wealth is not his that has it,but his that enjoys it.’- Benjamin Franklin
By the time I have money to burn, my fire will have burnt out. ~Author Unknown?
To make it short,if you failed to live till the age of 55,you don’t get to ‘smell’the amount you have contributed,less to ‘enjoy it’ unless you belong to one of the 36 illness list.The point is,’Is that what you want?’
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