Employees Provident Fund (EPF) in Malaysia is a retirement savings plan for individuals employed in the private and non-pensionable public sectors. It eensures that employees have a financial safety net upon retirement age, with a portion of their salaries automatically allocated to their EPF accounts throughout their working years.
You can keep your money in the Employees Provident Fund (EPF), also known as Kumpulan Wang Simpanan Pekerja (KWSP), until you reach the age of 55. It is the age of eligibility for full withdrawal. However, partial withdrawals for specific purposes such as education, healthcare, or housing can be made before age 55. The EPF allows members to continue leaving their money in the fund beyond 75 without any restrictions mentioned​.
How long can I keep my money in EPF Malaysia?
What is EPF mandatory withdrawal?
The concept of mandatory withdrawal in the Employees Provident Fund (EPF) Malaysia refers to a proposal that aims to transition from a lump-sum withdrawal system to a monthly withdrawal system for members once they reach the age of 55. This proposal is part of an initiative to ensure better fund longevity and financial stability for retirees. Here are the key points regarding the EPF mandatory withdrawal proposal:
Proposal for New Members
The proposal for mandatory monthly withdrawals is being considered for new EPF members born in 2010 onwards. These new members, who register with the EPF after the implementation date of this proposal, would be required to withdraw their savings on a monthly basis instead of a lump sum upon reaching the retirement age of 55.
Implementation Stage
As of mid-2023, the Malaysian government was finally adjusting its policy regarding mandatory withdrawals from the EPF for those aged 55. This policy adjustment is being considered to ensure that retirees have a steady income post-retirement, which is expected to provide better financial security for them.
Objective
Mandatory monthly withdrawals aim to promote better fund management and ensure that retirees have a steady flow of income, which would contribute to their financial stability post-retirement.
This proposed change reflects a shift towards a more structured withdrawal system to aid in better financial planning and security for retirees in Malaysia.
EPF contribution age 75
The Employees Provident Fund (EPF) or Kumpulan Wang Simpanan Pekerja (KWSP) in Malaysia has provisions for contributions until the age of 75. Here’s a breakdown at the contribution until the age of 75:
Contributions Until Age 75
Employees can continue to make contributions to the EPF until they reach the age of 75. There’s no minimum age requirement for employees to contribute, but employer contributions change after age 60.
Employer’s Share
For the age group of 60-75 years, the employer’s share of contribution is stipulated as RM5.00 per employee per month as per the statutory contributions under the EPF Act 1991, effective from 1 January 2020.
Contribution Rates
The minimum company contribution in Malaysia for EPF employee contribution is 11%, regardless of the employee’s monthly income. In contrast, for the employer contribution, the rate is 12% and 13%, respectively, depending on the employee’s monthly salary. This contribution structure can continue until members reach the age of 75.
Tax Deductibility
EPF contributions are tax-deductible up to a maximum amount of RM4,000, subject to periodic amendments by the government. This provision also applies to employees who have reached age 75, although the details for expatriates might differ.
These provisions help to ensure that employees have the opportunity to continue saving for their retirement even beyond the conventional retirement age, while also allowing employers to contribute towards the welfare of their aging workforce.
Can I contribute to KWSP after 75 years?
KWSP, also known as the Employees Provident Fund (EPF) in Malaysia, allows members to continue contributing even after age 75. However, the employer’s contribution will cease once the member reaches the age of 60.
Members can still make voluntary contributions to their EPF accounts after age 75, but they may be subject to certain limitations and conditions. It is recommended to consult with KWSP directly for specific information on your individual circumstances.
Can I keep money in EPF after retirement?
Yes, you can keep your money in the Employees Provident Fund (EPF) or KWSP (Kumpulan Wang Simpanan Pekerja) after retirement in Malaysia. While the age of eligibility for full withdrawal is 55, the EPF allows members to continue to leave their money in the fund beyond this age. In fact, members can continue to leave their funds in the EPF beyond 75 and even continue making contributions if they wish. They also have the option to make partial withdrawals for specific purposes such as education, healthcare, or housing before reaching the age of 55 or make investments starting from age 55 while retaining a minimum amount in their EPF account.
Some members keep money in the EPF and earn dividends until 100. It indicates flexibility and a preference for extended fund retention in some cases. It is designed to focus on ensuring financial security post-retirement.
How long can we keep our money in KWSP?
You can keep your money in KWSP (Kumpulan Wang Simpanan Pekerja or Employees Provident Fund) until you reach the age of 55, which is the age of eligibility for full withdrawal. However, you can make partial withdrawals for specific purposes such as education, healthcare, or housing before reaching the age of 55.
Once you turn 55, you can choose to withdraw your funds in a lump sum, in installments, or keep the money in KWSP and continue to earn dividends until the age of 100. Not only that, the KWSP offers various schemes and programs to assist its members in managing their retirement savings effectively.
For instance, the Age 50 Withdrawal Scheme allows members to withdraw up to 30% of their savings when they turn 50 years old, while the Incapacitation Withdrawal Scheme caters to members who are physically or mentally incapacitated and unable to work. There is also the Death Benefit Scheme that provides beneficiaries with financial assistance in the event of a member’s death.
Members must keep track of their KWSP account and consistently update their personal information, including beneficiaries, to ensure a smooth withdrawal process.
Can I save money in KWSP after retirement?
Yes, you can continue saving money in KWSP (Kumpulan Wang Simpanan Pekerja or Employees Provident Fund) after retirement.
However, the contribution rates and rules may vary depending on your age and employment status. It is advisable to check with KWSP for the latest regulations and guidelines for post-retirement contributions.
After retirement, you may still continue contributing to your KWSP account on a voluntary basis, either through your employer (if you continue working) or by making voluntary contributions as an individual.
This can be a good way to continue building your retirement savings and take advantage of the tax benefits associated with KWSP contributions. Additionally, the dividends earned on your KWSP savings are also tax-free, allowing your savings to grow faster.
It is essential to familiarize yourself with the current rules and regulations regarding post-retirement contributions, as these may change from time to time.
You can visit the KWSP official website or call their customer service hotline for the latest information.
Also, could you consider consulting a financial advisor to help you plan your retirement savings strategy and ensure that you make the best decisions for your financial future?
When can I withdraw money from my KWSP account?
You can withdraw money from your KWSP (Kumpulan Wang Simpanan Pekerja) account under several circumstances, primarily once you reach the stipulated age of withdrawal, but also for certain specific purposes before that age. Here’s a breakdown:
Age of Withdrawal:
- You can make a full withdrawal from your KWSP account once you reach the age of 55.
- For those registered on or after August 1, 1998, investment withdrawals can be made anytime from age 55, with a requirement to retain a minimum of RM 1,000 in Account 55 (Akaun 55).
Specific Withdrawals Before Age 55
Before age 55, partial withdrawals can be made for housing loans, education, medical expenses, and investment under schemes like “Account 1 Withdrawal” and “Account 2 Withdrawal.”
- Education: Partial withdrawals can be made to finance education for yourself, children, or your spouse.
- Healthcare: You can make withdrawals for medical expenses for critical illnesses for yourself or your immediate family.
- Housing: Partial withdrawals can also be made for buying or building a house, or reducing/redeeming housing loans.
Continued Contributions and Withdrawals
- Beyond the age of 75, you can continue to make contributions and potentially withdrawals, although there may be certain limitations.
- There’s been mention of the desire among some members to keep money in the KWSP and continue to earn dividends until the age of 100, indicating a flexibility for extended fund retention.
Mandatory Monthly Withdrawals (Proposed):
- A proposal for mandatory monthly withdrawals is being considered for new members born in 2010 onwards to ensure better fund management and financial stability post-retirement. This initiative aims to provide a steady flow of income for retirees by making regular or monthly withdrawals mandatory upon reaching the retirement age of 55.