3 other ‘forced’ savings beyond EPF savings

3 other ‘forced’ savings beyond EPF savings

Withdraw EPF savings before 55?

If this is a question for me, “Should I withdraw my EPF before 55?” My answer is a simple one, no. I know many would have many reasons especially with the current crisis and the hardship caused by loss of income etc. My main reason is because EPF savings is really for post-retirement, when income has stopped or has gone down significantly versus the time when one was still working full time and has monthly income.

Why RM240,000 should be the minimum?

If we assume we retire at 55, then we need to be ready with funds to live by for the next 20 years. I assume life expectancy to be 75. This was why the minimum EPF savings which EPF is recommending is RM240,000. Thus, it’s RM12,000 per year or RM1,000 per month. Some would say that this is barely enough today, how could it be enough in the future? This is why EPF savings must not be the only savings. let’s look at what MIER has to say first.

Article in Malaysian Institute of Economic Research (MIER) said many things. Here are three of them from their statement.

“EPF is not designed to deal with calamities and pandemics. Rather, it is intended to ensure that its contributors enjoy a decent life after retirement.”

“The mass withdrawals have resulted in 6.1 million members now having less than RM10,000 in their accounts, with 3.6 million members having under RM1,000.”

“This is undoubtedly a far cry from the threshold of RM240,000 essential savings by the age of 55 for members to enjoy a dignified retirement.” Please do read the full article here: Article in

What other savings then?

Here are three other savings beyond just our EPF and they needed to be ‘forced.’ Another ‘forced’ savings we must have is for a property when we are younger. This is so that by the time we stop working, we actually have a place which we do not need to pay to stay every month. As a landlord, I would like to remind everyone who’s renting a place today that I do not know of any landlord who will ask their tenant to stop paying rental just because the tenant has paid monthly rental for 30 years.

Another ‘forced’ savings would be to forego trying to outdo the peers. I just remembered that my Persona is in the 12th year now. I finished paying for it 7 years ago. In other words, I have saved RM600 per month x 7 years and that’s a substantial RM50,400. That’s also a ‘forced’ saving because for the past 12 years, many people would have seen my Persona and thought, ‘oh dear he’s poor and could not afford a Japanese branded car.’ It’s okay. I prefer RM50,400 versus having my peers thinking positive of me just because I drive a car they think is the minimum standard for a working professional.

There’s also the ‘forced’ saving from not buying unnecessary stuffs during 1.1, 2.2, 3.3 until 12.12 sale. My good friend whom I always learn a lot when we meet, Suraya of the famous shared with me before that when she wanted to buy something, she will delay the decision for a while. If she could survive without it, then the item is actually not necessary.

Yes, I think everyone should read her personal finance blog yeah. I have also done something similar. I just delay that purchase for one month. If I could not, then it’s really needed. Else, it’s okay not to get it.

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