6.4% awesome!!

Hey guys,

In ALL of the history of EPF to date, in the very worse of time, when the economy is in recession and companies are not making any money and a lot of companies earnings are NEGATIVE, EPF is able to yield at POSITIVE earning at 4.25% (2002 - Dot com crisis), 4.5% (2008 - Global Financial Crisis), even much better than most of us are getting at FD rates today.

For those who invest in the stock market, one or two bad years in recession, all investments can go down BELOW their principal (or wipe out their retirement).

So, do you guys see any bad times at all? Infact, there is none so far..

Sometimes, I'm baffled why the heck to people wants to withdraw all their EPF money and put in something like FD.

This post has been edited by danmooncake: Feb 15 2014, 10:59 PM

If someone continues to contribute young (say if they start at 25) and work till early retirement (55).
Monthly salary of average 3K, 11% self, 12% employer contribution. avg 5.5% divi, including adjusting for inflation 3%.

They can achieve millionaire status (7 digits) in retirement fund by 55.

For those who already achieve their goal today (7 digits) in their fund,
they can live on the dividends alone with moderate lifestyle and leave the rest in there to continue
to collect the dividends every year.

So, slow and steady... everyone can reach their goal!

I assumed in line with inflation 3%..

No, NOT a single withdrawal for ANY purchase from the main account. If anyone wants to save for house purchase, he/she can open 2nd account and definitely can contribute now (self contribute or ask employer to help).

Don't pour cold water lah!.. just tell 'em it is 7 digits with no decimal points!

Last year (2013), KLCI returned 8% - that's good economy. Why you say bad?

Well, KLCI is its own beast.

Only later near year end, when other emerging market tanks, the foreign investments also follow, KLCI showing signs of weakening. But, it's coming back again.

So, as long as the govt keeps pumping (or printing) money into the economy, KLCI will most likely get another 8-10% this year.

They projected the economy is set to grow 5.4% in 2014. That's pretty healthy.

In that case, continue to put money in EPF. It is safe.

Like I said, consistent contribution over a long term can help to build a pretty good egg nest.
No need to take risk by taking money out and investing in stock market.
Good retirement plan for working class!

Another good year for EPF..

Previous year (2013), got 6.35%, this year 6.75%

See what I meant by EPF has never gotten negative returns and beat even best FD to date?

Some early retirees people preferred to take all their EPF money out last year and invested in Gold and Oil!
Of all the things they invest, they invested in gold and Oil. Their portfolio drops 40% because of this mistake.

There seems to be a lot of fear that the traditional KWSP may be less than KWSP-i or traditional KWSP contributors are forced to select KWSP-i.

But.. guys.. does this matter when it comes to yield whether they're syariah or not?
Non-muslims can also choose the syariah products if they give better yield, correct?

Why not just wait, and see how the rules turned out before deciding on the next action plan of changing your contribution or deciding when to withdraw (if you're near that 55 qualify age).

IMO, until FD yields better than EFF, even past 55, I would leave them in there and take out what is needed for expenses.

Cherroy,

You know, the puzzling thing to me about syariah products - they just changed the verbiage of interests/dividends to profits sharing to be compliant with "islamic" products. If there are "profits", like any or businesses or investments, there are also risks where if there's a bad year, it could also mean "loses".

Do syariah products also allow "loses" to be shared with the members if business or investments go bad?

If so, imagine, one bad year - everything is in red (let say stock market tanks 50%) and with no min guarantee of 2.5% dividend yield (like the traditional KWSP), KWSP-i could have a negative yield.

This post has been edited by danmooncake: Oct 22 2015, 10:14 AM

I don't want hijack your question but from my observation, in Bolehland, we can turn any non-Syariah products into "syariah' compliant with a few twists here and there and call it good and everyone is happy where else nothing fundamentally has changed how the money is being made.

FBMKLCI is still negative for the year. Ringgit has dropped over 20% this year.
That's means a lot of companies earnings flat this year.

Syariah or not (early bird or not), I wonder how they will turn up another 5%+ yield or higher rate?
Perhaps 2.5% may not be bad after all.

I have an uncle who's in 75 now and has worked since the 1970s. He had not withdraw a single dime from his EPF. His plan is to continue to accumulate as much dividends as possible (since it is higher than FD) until EPF forces him to distributed his money. He treating the EPF as long term investments with very little risk. At one year, I think he said he got a notice saying that EPF disallows any member who is not contributing to continue to let their money sit in the account, then the following year, he got another notice, he can continue let his money in there till 80. He has named his nominees since then (of course in preparation just in case, he passes suddenly). So, he got about 5 more years to let his money to continue to grow.


Therefore, I don't think they would restrict anyone to withdraw after 55 (which is the qualify retirement age), if they really do retire and not working anymore.

It does not make sense say for example, if one decides to work and contribute until 57 - two more years into past their qualified 55 retirement age, then starting at 57.5, they wanted to retire and starting to withdraw, EPF ruling would prohibit them just because they are under 60 (since they're not contributing anymore).

I believe if anyone do want to continue to work beyond 55, while the individual is still WORKING beyond 55, both the employee & employer are continuing to contribute into EPF, concurrent withdrawal is perhaps PROHIBITED at that time. Now, this would make more sense.

This post has been edited by danmooncake: Oct 22 2015, 10:58 PM

Hansel,

I think you're like me right now. I contribute to my own EPF fund using my own fund, maxing out to the limit (60k/year). I don't intend to withdraw either even till past 55 unless my financial situation changes or I decided to retire early (before 60) or there are some major change in the EPF ruling. My intention of EPF is to use it for our (spouse and myself) future retirement or spending only in Malaysia - which are years down the road. I can't find any risk-free FD-like fund that can beat EPF at the moment, so putting money in EPF is ok with me.

Furthermore, with the low ringgit value this year, I got 15%-20% discount after converting to Ringgit to fund the account.

This post has been edited by danmooncake: Oct 23 2015, 10:15 PM

Hansel, I know about those other products too but I don't to get into them because of those caveats.
Also, I agree with you. That above 6% rate won't last forever but the last 5 years been good. I was only expecting 4~5%. As long as Msia EPF pays better than Singapore CPF, I'm ok with it despite the currency issue. I think we have hit the low point here around 2.85 to 3.15 rate (sgd to ringgit) for this year.

This post has been edited by danmooncake: Oct 23 2015, 10:57 PM

Ramjade,

Cherroy is correct. There's very little inflation here in Singapore. Same like US. Look their their OPR.. zero for so many years, forcing people into risky assets (like emerging markets like Malaysia). Hence, when the Fed says they just wanted to raise rate (just a little only mah..), everyone panic and pull money out. Malaysia bonds kena whacked. if no one buys, rates will go even higher. If rates go higher, people in debt will be in trouble!

So, don't say stingy-lah.. developed economy and emerging ones don't operate the same way.
Savers in Malaysia very lucky these few years.. blind folded also can save money in almost risk free accounts and can get reasonable rates. Elsewhere, people have to work much harder to get better yield.

It is for everyone. Say if you and your employer contributed 40K for this year. So, you've 20K left to max out for yourself with your own personal money.

Hansel,

It's difficult to predict the future. No one knows exactly how it will go. Sometimes, in investments, when everyone is bearish, it is time to be bullish. So, when confidence is low, you go in whenever everyone is afraid.

If you remember, it was just hardly 4 years ago, when US dollar was low (2010-2011), US just trying to get out from recession, everyone was cursing at them and it's going to collapse, Malaysia politicians and economists were so proud that Ringgit remains strong (1USD=2.95 in late 2011), people have so strong confidence in Malaysia, billions were invested, thousands of jobs were created, property market in Malaysia were going up double digit despite elsewhere going down, (and during this time, Najib made its stealth move with 1MDB and its shell companies with JLow ). Everyone was happy. Fast forward today, we know that was the peak. The Ringgit was to be dumped back then, which I gladly did.

Now, when the Ringgit is low (1 USD=4.25), everyone is cursing Ringgit, confidence in Malaysia economy is at low point, USD at the highs.. I think it's time to go the other way round. Therefore, I've actually reduced my overseas investment and repatriate some back to Malaysia and park here for the opportunities.

This post has been edited by danmooncake: Oct 25 2015, 10:14 PM