Wednesday, March 23, 2022

EPF, Retirement Savings & Money Matters

A country needs strong leadership, not populist policies catering to the majority while doing harm to society in the long run. I could not believe my eyes and ears when I read a few days ago that the government agreed for the fourth time to allow Malaysians to withdraw from their Employees' Provident Fund which is really a retirement fund for retirees in their latter years and old age. Some statistics make depressing reading. About 48% of Malaysians have less than RM10,000.00 savings in their EPF which means once retired, that amount of money can last perhaps 12 months at the most while most retirees live for another 20 or 25 years. No wonder Malaysia are trapped not only in a lower-middle income bracket but too many people remain poor and some are really poor. Too many people are poor if you can digest the numbers and figures given by the EPF management. Salaries are low, that's why after many years of working they still average RM10,000.00 in their EPF accounts. I can well understand this as I identify with wage-earners, a low wage-earner for that matter. Sabahans' average family income is RM5,700.00 which makes us one of the poorest States in the country as the national average is almost double that. But when I was employed, I got less that half of that for my whole family as my wife does not earn an income. I know my EPF savings are meagre, average RM500.00 per month which is only a week's basic living expenses. But I serve a living God and I seek His guidance and ask for His wisdom all the time so that I could manage my money the best I can. 

When I turned 55 years old in 2019, I took out a third of my EPF savings to publish my two books. A close friend of mine could not believe what I did, but as for me, it was an act of obedience and worship to the Lord as a thanksgiving for all His goodness in my life for the past 25 years of full-time ministry (Dec 2019). So I published "Departure Points" with one of the premier publishing Houses in Sabah. If I had sent to a printer I probably could save at least 30% costs but it was in honour of the Lord so that it has to have an ISBN number and could be sold publicly in retail and marketed commercially overseas. In fact, after two years of Departure Points I have no regrets whatsoever as I felt I had done what I could to record for posterity the works of God in my life, for whatever wrought in God will be eternal as the fruits of it are everlasting. 

So back to EPF, the Finance Minister even announced before the latest round of withdrawal that EPF members could have earned a 6.7% dividend for 2021 instead of 6.1% if not for the RM101 billion withdrawn over two years. Yes, 101 billions not millions! Malaysians will become poorer. And to be poor in your old age is not something anyone should find himself in. The government must hold firm, despite pleas from various quarters. The estimate of required funds for retirement is about RM250,000.00 for RM850.00 monthly for 20 plus years. Putting inflation aside, this figure is hardly enough for basic necessities like food, petrol and car maintenance. Yes, cars. Another friend commented a week ago that Malaysians can't be poor since there are so many cars are on the road. My reply was that most Malaysians take out a 9-year loan and by the time they need a new car, they will take out another 9-year loan and they are forever indebted and they remain poor until old age. 

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