Employees Provident Fund (EPF) savings is meant for retirees to have something to fall back upon after they retire. Of course, majority may not have enough when they do retire. Read here: EPF alone is definitely not enough, BEWARE That’s one reason why EPF allowed members to use Account 2 to be used for property purchase. Property is an asset, most of the time unless the wrong one was bought. On a longer term basis, that property may appreciate so that one day when the retiree needs more money, they can sell it and use the proceeds for living expenses and perhaps rent a small room or move to smaller and cheaper towns. Yes, I hope Ipoh is still affordable for me then.
Today, reported in an article in NST, Second Finance Minister Datuk Johari Abdul Ghani said that there is a possibility that first time homebuyers are allowed to tap into their Employee Provident Fund (EPF) savings to cover the financing. However, details needed to be worked out and discussions are ongoing. This was for the suggestion that funds in the EPF Account 2 be raised to 40 per cent from the current 30 per cent. He cautioned however, “There will not be a blanket increase. We’re looking at a specific percentage and how the EPF can allow part of the money to help top up instalment payments for first time homebuyers.”
I think the following must also be considered. Is it really necessary because this additional 10 percent is not a huge amount unless the contributor has already contributed a LONG time and by then, the property prices may still be prohibitive. Secondly, how would this affect the available fund in the contributors’ account. As it stands today, the amount available is not really sufficient for majority of all contributors. Third is whether EPF would also share some insights as to the type of property which the buyer can focus upon. The reason is simple. The returns from EPF is considered okay but if the buyer bought the wrong property, then he has just made sure his retirement becomes harder. Well, let’s wait for some of these questions to be answered then. I personally believe all buyers should buy based on what they could afford and manage their expectations too. Cheers.
written on 4 Oct 2016
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