interest rate

EPF payout totalled RM51.14 billion for 2022

EPF’s payout totalled RM51.14 billion for 2022

EPF’s dividend for 2022.

This was a super big news before it was announced; so many media outlets were predicting the potential number. It was also hotly discussed after it was announced. Some say it’s low, some say it’s respectable. Some say it could have been better IF… Regardless, here’s that article on the details of the announcement by the EPF just a few days ago.

Article in EPF chairman Ahmad Badri Zahir said the payout will benefit more than 15 million EPF members, including members from the informal sector who are registered under i-Saraan, an incentive-based voluntary contribution programme. He said in a statement, “Despite the persistent global market downturn in 2022, the EPF’s investment portfolio maintained its resilience and maintained minimal impact.”

Additionally, “EPF’s well-diversified portfolio and healthy liquidity helped to reduce risk and enabled the fund to maintain investment assets at above RM1 trillion and deliver respectable dividend rates for 2022.”

EPF has declared a dividend rate of 5.35% for conventional savings and 4.75% for shariah savings for 2022. this is reasonable since Malaysia is still in the recovery period after the Covid-19 pandemic. Article in

EPF’s return of 5.35pct is low?

A friend (who’s very good with stock trading) said that EPF’s payout is low. It’s just 5.35% for the conventional savings and 4.75% for shariah savings for 2022. Well, I guess it’s a matter of perspective because unfortunately for majority of EPF contributors, they do not know how to trade in stocks and earn exceptional returns. In fact, almost all my friends said that they are wary of the stock market and some would tell of how much they have lost when they bought the wrong counter too.

Why EPF is known as retirement savings?

Once we stop working, our income stops coming. Some times, even if we want to work, when we reach 60, chances are job offers will be harder to come by. Chances are we would need to start dipping into our savings at the time. Chances are EPF savings would be one valuable post of money at the time on top of all other savings we have. This is why EPF should be treated as a retirement savings and NOT taken out for any other purpose except for emergency.

I am grateful and at the same time I know I need to prepare too

Frankly, the reason I diversify my investments is because I do not wish to rely on just my EPF savings. Investments are to ensure my accumulated wealth is not eaten up by inflation over the passing years. Inflation cannot be stopped, so we need to let it be. Investments would be up to us. Not drinking a latte in a cafe daily would allow us to have the following for investment every year. Imagine if the return to that investment is also 5.35%…

RM15 (one latte in a cafe) x 365 (days) = RM5,475 10 years and this would be RM54,750. Based on 5.35% returns, the amount we have would double every 13 years. Yea, this is really a lot of money which we did not realise as we sip that latte in a cafe yesterday.

I am however grateful that despite so many challenges, EPF declared a return which was higher than the rate of Fixed Deposits and indeed I do not mind if the return of 5.35% continue to be the same for the next few years. Of course if it could higher, then it is even better.

Happy understanding.

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