A typical Malaysian, aged 40, who spends RM60,000 this year maintaining his lifestyle will need an estimated RM108,000 to fund his first year of retirement when he stops working at 55, if inflation averages 4% a year, between now and then. Even if he only lives until he’s 74, he’ll still need an accumulated total retirement fund of RM1.9 million* by the time he’s 55. That is an astoundingly large sum for most people, but if you take sensible steps to make your money work harder, you can move a long way towards achieving that goal.
If your personal investment objective is capital preservation, then EPF is the perfect place to keep all your future retirement funds. But if your objective is long-term capital growth, you might want to seriously consider the option granted by EPF to allow you to invest in unit trusts.
Since November 1996, all eligible EPF contributors are allowed to withdraw part of their savings to invest in unit trusts through external fund managers appointed by the Ministry of Finance. MAAKL MUTUAL is an officially appointed Fund Management Institution that offers the EPF Members’ Investment Scheme. Your investment in this scheme will allow diversification of your EPF savings into many possible investment portfolios.
Effective 1 February 2008, members can invest not more than 20% of their credit in excess of Basic Savings in Account 1 in products through approved external fund managers. The minimum amount of savings that can be withdrawn is RM 1,000 and can be made at intervals of three months from the date of the last transfer, subject to the availability of the Basic Savings required in Account 1.
Starting 1 January 2008, EPF members pay substantially lower service charges for unit trust investments. This means EPF members only pay a maximum of 3 percent in charges, as compared to the previous service charges of about 5 to 6 percent. With the lower service charges, EPF members can look forward to potentially better returns from their unit trust investments.
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