`

THERE IS NO GOD EXCEPT ALLAH
read:

Wednesday, November 23, 2016

EPF Gold Account boon for those in late 50s



The two recent announcements made by the Employees Provident Fund (EPF) brought smiles to the fund's 14.55 million contributors, especially the 6.79 million active members, in planning out their retirement.
Other than maintaining the savings withdrawal at the age of 55, a new account, the Gold Account, was introduced for members working beyond the age of 55. The move stands testament on the steps taken by the EPF to keep improving its saving schemes to ensure a blissful retirement for its members.
As for Mohd Azman Mahmud, 53, EPF's announcement was a big relief as it would enable him to plan out his retirement that is due in seven years.
He plans to withdraw his savings when he reaches 55 and the first thing that he wants to do is invest wisely to ensure a blissful golden years.
"Apart from settling the housing loan, I have identified several investment schemes in the market to grow my savings," said the bank officer who would be retiring at 60.
In welcoming the Gold Account, he said, the contributors stand to benefit through the compounding effects of the dividend for an additional five years after the age of 55.
With the Gold Account, after making withdrawals at 55, contributors now have a new avenue to save up for another five years before they retire at 60.
Two accounts
The Gold Account would be very useful as the average Malaysian continues working even after the age of 55 as the minimum retirement age is 60, according to EPF's chief executive officer Shahril Ridza Ridzuan.
Moreover, the Gold Account does not affect the existing schemes and that the savings in the account can only be withdrawn upon reaching 60. It is expected to benefit 250,000 working members between the ages of 55 and 60.
"This means members who are 55 years of age and still working will have two accounts with both accounts paying out the same dividends and the employer contributing the same amount, 12 to 13 percent," he said.
The announcement that the withdrawal age remains at 55 also brought relief to the members who were initially perplexed with EPF's proposal that the mandatory withdrawal age increased to 60 in line with the rising retirement age of Malaysians.
Members could also withdraw their savings in one go, partially or in stages.
The status quo was maintained after taking into consideration of the contributors who overwhelmingly wanted EPF to maintain the withdrawal age at 55 and the contributions from 55 to 60 goes into the Gold Account.
Members also gave their thumbs up for the dividend payments to continue from 75 to 100 years of age.
"This move will benefit members who want to maintain part of their savings with EPF and continue enjoying the dividends until full withdrawal much later," he said.
Safe and reliable
The dividends credited into the members' account will be handed over to the Registrar of Unclaimed Money after 100 years if the money is not claimed.
The Gold Account is a brilliant move in addressing the woes faced by retirees these days.
This initiative to some extent could help ensure contributors retire comfortably after the age of 60, said consumer financial expert Associate Professor Mohamad Fazli Sabri.
The dividend payments extended from 75 to 100 are the best avenue for EPF members to increase their savings through the Gold Account.
"This will help alleviate the many fears harboured by the contributors after they retire. This are the things that will help them manage their retirement funds," he said when contacted by Bernama recently
The savings withdrawn at 55 can be utilised by the members to increase their funds through safe and reliable saving schemes, including the Private Retirement Scheme (PRS).
Retirement calls for detailed planning especially in offsetting the rising cost of living. The big question here is whether the EPF savings is sufficient to help one keep going 10 or 20 years after retirement?
Plan early
Even before reaching 60, many of the retirees will need money for certain things. Among others for their daily expenditure, car loan, children's education, local or foreign travel, high medical cost, medical insurance, etc.
If retirement is not well-planned, it is only a matter of time before the retirement funds dry up.
Hence, despite of the Gold Account, contributors have to start planning early, right after they start work. Even pensioners have to start saving early.

What is important is that there has to be awareness in spending prudently their saving because without planning their savings could easily dry up, said the lecturer and the head of the Resource Management and Human Ecology Studies Department, Universiti Putra Malaysia.
"The existing system like Gold Account is good enough only that the awareness is lacking. If one starts planning retirement at 40, its meaningless.
"The education aspect in planning retirement should start right from the school ," he added.
- Bernama

No comments:

Post a Comment