Some thinking of topping up EPF contributions due to higher dividend
PETALING JAYA: The latest annual dividend of 6.3% announced by the Employees Provident Fund (EPF) has brought much cheer to contributors at a time when many are struggling to pay for daily necessities and expenses while also worrying about their nest egg.
The rate for 2024, announced yesterday, is the best in seven years for conventional savings and the second highest for syariah savings since its inception in 2017, prompting some grateful Malaysians to consider increasing their contributions.
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Ilhan Muhammad, 28, a customer service executive based here, said the favourable rate has boosted his confidence enough to inject more funds into his account.
“It’s such encouraging news. It means my savings are growing at a decent rate, which gives me more confidence to keep my money in EPF rather than withdrawing it early or investing it elsewhere.
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“If the dividend remains strong and stable like this, I’d be more inclined to contribute extra into EPF’s flexible account (Account 3) whenever possible because it feels like a safe and worthwhile way to grow my retirement funds,” he said.
If the returns had been lower, he would have thought of looking at other investment options.
“But for now, this kind of return is quite reassuring, especially when things are so costly.”
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A bank officer in Ipoh, Chang Kok Khan, 44, hailed the payout as positive news to all contributors.
“With so many uncertainties in the current global economy, getting a bit more money certainly helps elevate our mood on the first day of March as we face the rising cost of living,” said the father of three.
“For those who have cash-flow problems, this would mean they could have some leeway to withdraw from Account 3.
“If the money is used to spend in the local market, it will also help our economy,” he added.
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“However, it’s still best to just leave the money untouched until we retire. Every little bit counts.”
K. Muthamil Selvi, 29, who said she is really pleased with the higher dividend this year, said the money is the long-term savings that she is relying on for her old age.
“It’s my goal to retire at 60 and not have to work after that,” said the graphics designer in Penang.
“This is the money that will get me through my old age, and better dividends mean I will have more money for my sunset years.
“I am happy that the people at EPF know how to invest the money well and get us good returns,” she added.
A salesman in Penang, Elvin Tan, 25, who has been contributing to EPF since he was 18, said his goal is to leave the money untouched unless it is absolutely necessary.
Though his EPF savings are not substantial at this point, he said it is heartening to see the sum grow over the years.
“I hope I will never have to touch that money until I turn 60, but I may need it when it’s time to buy a home,” he said.
In Johor Baru, the 6.3% dividend prompted businesswoman Collen Sigar to make voluntary contributions to her EPF account in order to increase her savings.
“Since I turn 55 this year, I’ll be able to withdraw money from my EPF, but I won’t do so when there is no urgent need for cash at the moment.
“In fact, I now plan to make more voluntary contributions because EPF is a safe place to keep my money based on its improved performances since 2018,” she said.
Collen said she had only started contributing to EPF again last year after finding out that she could do so voluntarily.
“My EPF account was opened over three decades ago when I got my first job as a factory operator. I contributed to the fund for only about 10 years until I became self-employed.
“I only found out from my children last year that I could voluntarily put money into the account, and I have since been putting in a small amount every month,” she said, adding that she plans to put in a larger sum this year.
EPF members can voluntarily add up to RM100,000 to their accounts each year.
Nur’ Aina Osman, 40, an administrative officer at a public university, too, plans to contribute to her EPF account again.
“As a civil servant, I contribute to the Retirement Fund Inc (KWAP), but in the first few years before my appointment was confirmed, my retirement contributions went into EPF.
“I still have the account with a small amount, which has been growing over the years.
“I have been thinking of contributing to my EPF account again, and now with its encouraging financial performance, I am definitely going to do it,” she said.
Nur’ Aina said that by contributing to EPF again, she will be able to withdraw a larger sum when she reaches retirement age, in addition to receiving a monthly pension from KWAP.