Personal Finance 101: EPF is for retirement. Period.

Personal Finance 101: EPF is for retirement. Period.

Withdrawals from EPF is not wise, not for 4 times definitely

When the government first allowed EPF withdrawals, I was against it. Even from the FB comments and my conversations, it is safe to say that many of the ones saying they will withdraw since it’s allowed do not need it in the first place. To these people, the withdrawal either gives them money to invest (which is great) or the extra money to spend (which is bad). These people are not the actual target of the ones in need of funds during the pandemic. The real target were these people; people who needs the money for emergencies.

Article in 51.5% or a total of 6.67 million of Employees Provident Fund (EPF) members below the age of 55 are having an “extremely low” savings of less than RM10,000 in their account.

The EPF chief strategy officer Nurhisham Hussein said, “The majority of members still have low savings. The number of members with savings below RM10,000 is at 51.5 per cent as of the end of 2022. This situation is very worrying.

“We estimated the savings to return to the original level in three to five years.”

The EPF considers a sum of RM240,000 as adequate for a poverty level pension by the time they retire.

“The low amount of savings currently is due to the four rounds of withdrawal related to Covid-19 namely i-Lestari, i-Sinar, i-Citra and a special withdrawal involving a total of RM145 billion.” Do read the article in full here: Article in

There is a reason for EPF not to be touched

Once these funds are withdrawn from the EPF, it would take many years for it to be replenished and during these times, the loss also come from the interest which would have been gained if the money had stayed invested inside EPF. Remember, the RM10,000 withdrawn today is actually worth many times more in the future because of compounded interest from the amount withdrawn.

It’s too late since the withdrawals have been done. However, it’s not too late to stop future withdrawals because helping the ones truly in need has no relevance to allowing everyone to withdraw the EPF savings, whether or not they actually need it. It’s really time to stop all these blanket kind of decisions. Whether it’s EPF withdrawals, whether it’s petrol subsidies, whether it’s any special payments like the recent RM150 to students. Let’s really provide MORE help to the ones in need and not just everyone gets a little of what’s available.

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