If you’re currently in a financial pinch or want to know as much as possible about the EPF or Employees Provident Fund program, one thought that’s likely to have crossed your mind is finding out how the EPF withdrawal system works. Here, we’ll be breaking down all you need to know about the EPF, how it works, and everything involved in getting your money out of the program.
What Is EPF?
EPF is short for Employees Provident Fund and refers to a government program run by the Ministry of Finance. The primary goal is to ensure that employees have something saved for when they’re at a certain age or unable to work again for whatever reason.
How Does Yhe EPF Work?
This retirement savings scheme works differently, depending on the individuals involved. For example, in all cases, EPF automatically deducts 11% of your monthly salary at the end of each moment. However, if you earn less than RM 5 000, your employer should contribute 13% of your salary to this program. But, in cases where you make above the RM 5 000 benchmarks, your employer is required to contribute only 12% instead. Recently, EPF has worked for people in the gig economy and even stay-at-home moms!
Withdrawing From Your EPF
Under ideal circumstances, this retirement savings scheme allows withdrawals only when an individual is 55. The primary reason is that you should take the proceeds from this account and use them to support yourself in your golden years. There are a few instances where you’re legally allowed to tap into this account at an earlier age, as long as you meet specific requirements.
Requirements For Withdrawing From Your EPF Prematurely
Some provisions allow you to take out some or all of your savings before age 55 under certain circumstances. Before delving into these circumstances, it’s vital to mention that your EPF is into two different accounts. You can’t withdraw from either of these accounts unless;
- You’ve saved above the required sum for your age and want to transfer the excess to a fund manager for further investment.
- You’re a civil servant who started the EPF program before putting you on the government’s pension plan.
- For any reason, you become mentally or physically disabled and cannot work anymore.
- You intend to relocate from Malaysia finally.
- You become deceased, and your beneficiary gets your savings.
- You must cover housing loans, Hajj expenses, or medical bills.
What To Remember
No matter the reason, make sure you think long and hard before dipping into your Employees Provident Fund, as this can have far-reaching effects!
