Malaysia Allows Withdrawal Of Their EPF

[therock]

https://www.channelnewsasia.com/news/asia/malaysia-epf-withdrawal-anwar-najib-relieved-prudent-13602184

I read this news with great interest..

We have some Singaporeans clamouring for their early withdrawal of the SG equivalent: CPF.

Now that a neighbouring country which literally took our system and implemented it in their own nation is allowing this, we can see how prudent this will be.

Can we really manage our own funds if we get a large windfall? 

Now we aren't talking about armchair intellectuals here.. we are talking about the masses, who may not deal with large sums of money on a regular basis, and may rush headlong into unwise investments or get forced into giving it to their kids.. 

So this will be an interesting study of whether it's a good idea or not IMO. 

Quote

the recent announcement by the Employees Provident Fund (EPF) to allow its members to withdraw money prior to retirement, was a “godsend”.

https://www.thestar.com.my/opinion/columnists/the-star-says/2020/11/08/epf-account-1-withdrawals-welcomed---but-must-be-treated-cautiously

Already words of caution are sounding out..

[RH1667]

At least there is a limit set at 10%, so hopefully help to survive this crisis without impacting the retirement plan too much. 

[Hamburger]

While over here, the minimum sum never cease to get higher and higher... 

[Watwheels]

Quote

Although the withdrawal of a maximum RM500 a month – only up to 12 months and with a cap of RM6,000 – is not significantly large in today’s economy, it is surely a much welcomed move.

Quote

Can we really manage our own funds if we get a large windfall? 

 

I doubt it's a "large windfall" but at least ppl will not starve.

[ToyotaShuttle]

1 hour ago, therock said:

https://www.channelnewsasia.com/news/asia/malaysia-epf-withdrawal-anwar-najib-relieved-prudent-13602184

I read this news with great interest..

We have some Singaporeans clamouring for their early withdrawal of the SG equivalent: CPF.

Now that a neighbouring country which literally took our system and implemented it in their own nation is allowing this, we can see how prudent this will be.

Can we really manage our own funds if we get a large windfall? 

Now we aren't talking about armchair intellectuals here.. we are talking about the masses, who may not deal with large sums of money on a regular basis, and may rush headlong into unwise investments or get forced into giving it to their kids.. 

So this will be an interesting study of whether it's a good idea or not IMO. 

https://www.thestar.com.my/opinion/columnists/the-star-says/2020/11/08/epf-account-1-withdrawals-welcomed---but-must-be-treated-cautiously

Already words of caution are sounding out..

What windfall? These are their savings and now that they are out of a job due to covid or whatever, nothing wrong to have them use their savings.

To use the word windfall is nonsense.

[therock]

2 minutes ago, ToyotaShuttle said:

What windfall? These are their savings and now that they are out of a job due to covid or whatever, nothing wrong to have them use their savings.

To use the word windfall is nonsense.

Sounds like you're a pro early CPF withdrawal chap.. 

[ToyotaShuttle]

1 minute ago, therock said:

Sounds like you're a pro early CPF withdrawal chap.. 

That's putting words in my mouth.

I am against changing the goal post on when cpf can be withdrawn.

I am for allowing people to use their hard earned savings when they've fallen into bad times.

I am against allowing OA to be used for property investment as I believe it encourages Singaporeans to buy  property and artificially pushes up prices.

 

[Windwaver]

1 hour ago, Hamburger said:

While over here, the minimum sum never cease to get higher and higher... 

CPF life is also another interesting instrument 

[Ct3833]

9 hours ago, therock said:

https://www.channelnewsasia.com/news/asia/malaysia-epf-withdrawal-anwar-najib-relieved-prudent-13602184

I read this news with great interest..

We have some Singaporeans clamouring for their early withdrawal of the SG equivalent: CPF.

Now that a neighbouring country which literally took our system and implemented it in their own nation is allowing this, we can see how prudent this will be.

Can we really manage our own funds if we get a large windfall? 

Now we aren't talking about armchair intellectuals here.. we are talking about the masses, who may not deal with large sums of money on a regular basis, and may rush headlong into unwise investments or get forced into giving it to their kids.. 

So this will be an interesting study of whether it's a good idea or not IMO. 

Malaysia's policies are a lot of time influenced  by their political situation,  this  EPF might be the case  as well considering the shacky position of their current PM. The other reason is that they have a lot more low income population than us, considering their covid 19 situation now, their lock down period will be much longer and more extensive, more poor people will be hit hard by the deteriorating economy situation,  this could be the reason behind the decison

Early CPF withdrawal  will never happen in SGP ascit defeats the purpose of CPF. But allowing  withdrawal of small sum  from CPF to let the needy tie over the interim during covid 19 does makes sense, just that the detail has to be carefully thought out.

On whether one could manage a large sum of their own CPF money , this is subjective. Some people cannot even manage $10k when  they have the money in their pocket. But looking at the bright side,  every year we have a group of people who cross their 55 and are allowed to withdraw all their SA/OA if they have met their retirement obligations, we dont see report about these people lossing their CPF saving, so it should not be a big problem. Of course there would be unfortunate cases but those should be exceptions than norm. 

I believe the government should be more worried for those who do not have  enough money in their CPF but still resort to drawing out the maximum allowable $5k when reaching 55, some of them will face financial difficulties when moving onto their old age.

Edited November 24, 2020 by Ct3833

[Mustank]

11 hours ago, therock said:

https://www.channelnewsasia.com/news/asia/malaysia-epf-withdrawal-anwar-najib-relieved-prudent-13602184

I read this news with great interest..

We have some Singaporeans clamouring for their early withdrawal of the SG equivalent: CPF.

Now that a neighbouring country which literally took our system and implemented it in their own nation is allowing this, we can see how prudent this will be.

Can we really manage our own funds if we get a large windfall? 

Now we aren't talking about armchair intellectuals here.. we are talking about the masses, who may not deal with large sums of money on a regular basis, and may rush headlong into unwise investments or get forced into giving it to their kids.. 

So this will be an interesting study of whether it's a good idea or not IMO. 

https://www.thestar.com.my/opinion/columnists/the-star-says/2020/11/08/epf-account-1-withdrawals-welcomed---but-must-be-treated-cautiously

Already words of caution are sounding out..

Here is use reserve to help

there is ask people take out their own money to help themselves 

want to push more oa to sa also cannot Liao sian

[Jman888]

15 minutes ago, Mustank said:

Here is use reserve to help

there is ask people take out their own money to help themselves 

want to push more oa to sa also cannot Liao sian

how to get the budget approved when the parties busy fighting each other in parliament?

[Mustank]

1 minute ago, Jman888 said:

how to get the budget approved when the parties busy fighting each other in parliament?

No budget no need to fight 

[Mkl22]

14 hours ago, ToyotaShuttle said:

That's putting words in my mouth.

I am against changing the goal post on when cpf can be withdrawn.

I am for allowing people to use their hard earned savings when they've fallen into bad times.

I am against allowing OA to be used for property investment as I believe it encourages Singaporeans to buy  property and artificially pushes up prices.

 

i agree. allowing too much OA to be used for property defeats the purpose of saving for retirement. all the money is lock up in the property.

[Actan72]

16 hours ago, RH1667 said:

At least there is a limit set at 10%, so hopefully help to survive this crisis without impacting the retirement plan too much. 

assuming they let u take 10% and must pay back with interest... u want ??

[RH1667]

9 minutes ago, Actan72 said:

assuming they let u take 10% and must pay back with interest... u want ??

Thankfully, i do not need to consider this option yet. 

But, if unfortunately,  when it is required, to make sure my family / myself can survive this crisis, sure.

Paying back what you withdraw from your own CPF and repaying with interest is what is being practice now when CPF is used for housing. 

Or you rather not be able to survive this crisis and just leave your money in CPF for your family ? 

[Philipkee]

Actually I suggested before.

Allow CPF withdrawal amounts up to previous year interest minus x amount for limited time.

Let's say for simplicity sake you have $100,000 in your special account ending 2019.  Interest will be $4500.

So comes covid-19.  Let's say my plan is put into action.  You are allowed to withdraw max $4500 - $900 = $3600 a year or $300 a month.  Again, this for simple calculations.  

Then pass this approval in parliament on a 6 monthly basis.  So this hypothetical person can withdraw a max of $1800 and if after 6 months they continue, he can withdraw another $1800 over 6 months.  

His capital is NOT touched since it's only the interest and because its interest- $900, at the bare minimum if he still has no job after a year, his capital has grown by $900.  And he still earns interest.  And $300 a month is more than the solidarity payment and such.  And reserves are untouched since its money that's supposed to be released anyway.  

What I mean when I say reserves are untouched is because when the govt gives the payout, they have given the cash AND they still owe the money in the CPF. But in my scenario, they have given the money but they now owe less to the CPF holder. 

It's like I owe you $100 but because you were short I give you $100.  I am now short $100 and I still owe you $100.  It could be I owe you $100, you were short $100 and i let you take $50 from what I owe you and give you $50. I am still short $100 but now i owe you $50 only.

Two cents.

[Carbon82]

For those of you who have never been so poor till you can't even have 2 proper meal per day (no typo error here, I am saying 2 meal instead of 3 per day), or facing a mounting debt due to family emergency (e.g. medical treatment), it is easy to say allowing early withdrawal defeats the purpose of having CPF / EPF, but to those really in need, it might be even a life saving move.

There is a saying in teochew: bo gao jiak gor ai pak da Direct translation: When you don't even have enough to eat (now), forget about preserving the food for future needs. Preserving food for winter in the olden days is a form of saving, but when the whole village do not even have enough harvest for food during the summer (and people are dying from hunger), how to preserve food for winter?

I wouldn't say I 100% support Malaysian way of allowing early withdrawal (especially when it is from account 1 instead of account 2), but if it does help to tight over this extreme challenging period for some (genuine cases), why not? And for those who took advantage of this opportunity and ended up with lesser amount for their retirement needs, well it is their ultimate choice, and who are we to judge them?

[inlinesix]

5 hours ago, Jman888 said:

how to get the budget approved when the parties busy fighting each other in parliament?

How approve a budget that allocate RM85m or SGD28m to a propaganda Agency?
That propaganda Agency will be resurrected in 2021.

In previous Years, allocated budget is no more than RM20+m.