It is a welcomed move from Employees Provident Fund (EPF) to allow contributors to withdraw part of their funds and channel them to approved investment programmes.

As reported at The Star:

Under the new scheme, contributors, irrespective
of age, will be able to withdraw from Account One what is in excess of
a “required amount” of savings as determined by the EPF and invest the
money in unit trusts.

Currently, contributors can only do so if they have in excess of RM50,000.
This is one among a range of changes that the EPF is implementing in
stages to make it easier for contributors to exercise the option to
augment their savings for their retirement.

Using the tagline “Beyond Savings”, the EPF also hopes the changes will
ensure that contributors have enough money for retirement.

Other changes include:

  • MORE flexible withdrawals for contributors at age 55;
  • ALLOWING withdrawal of any amount irrespective of age for savings in excess of RM1mil;
  • ALLOWING withdrawals from Account Two for critical illness insurance; and
  • WITHDRAWALS for housing loan instalments.

  • The new withdrawals flexibility will be available starting Feb 1 next year. Without the limitation of having at least RM50,000 in account one practiced previously, this means younger contributors will have the option to withdraw once in every quarter for riskier investment portfolio. Since riskier investment requires longer term to really reap the return and disregard the short term volatility, it is better for investors to start as young as possible.

    Besides providing investment advantage to younger contributors, the other party of investment bodies will have more capital to invest locally and hopefully will boost the local market further. Currently, EPF doesn’t allow fund withdrawal for foreign investment.

    Nonetheless, the unit trust sales force will be very happy to hear this news, including me :)


    KCLau
    KCLau

    Personal finance author and trainer

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