Malaysians who contribute to EPF like to wait for this period of the year. Why? EPF will announce the dividend rate for the previous year. EPF is the main source of retirement fund for many Malaysians.
Most Malaysians has little of extra savings during their working years. They would have used up the biggest portion of their salary to pay off housing loan, car loan, credit card, daily expenses etc.
So, this time is the most exciting moment for many of us. How much is the rate for 2014?
Historical rate.
Breakdown of profit source.
Bulk of the profits come from Malaysian Government Securities (MGS), loans and bonds, and shares; amounting to 94.85% of total profit (year 2014).
EPF is doing its best to invest on members' behalf, as member we need to do our part. For those self-employed, I always encouraged them to do voluntary contribution. First thing is the higher than FD dividend rate. Second thing is EPF money can only be taken out after retirement age (currently age 55). Although we say a ringgit saved is a ringgit earned, however if the withdrawal is too easy, whatever saved will be withdrawn for other purpose.
For those who contribute regularly to EPF, please use your EPF wisely when reaching retirement age. It is sad to hear EPF money saved through 30 years of work spent within 3 years. Please plan your retirement life before you step into it, say 10 years ahead. You may need to consider how long should your EPF last; or you may need to delay your retirement age. Whatever. Just make sure your EPF can last long enough, especially your EPF need to survive you and your spouse.
For either group, please save or invest in other instruments to complement your EPF savings. You can invest in Private Retirement Scheme (PRS), unit trusts, shares or property etc. By investing, you gain knowledge - knowledge that you can make used of after retirement. The dividends or rentals will be your passive income.
I like investing in shares. The knowledge I gained now will be mine forever. Share market will not deny my investment because of my age. And the dividend from my portfolio will be my passive income.
Or you may learn unit trusts. Try to be an agent. Unit trust companies will not deny your entry because of your age. Of course you need to have the basic academic requirement.
Talk to your financial planner if you need help. Be honest when asked to do a financial fact find.
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