If you’re a working Malaysian, chances are your EPF account holds the bulk of your retirement nest egg. But big changes are afoot that give you more flexibility to access those hard-earned savings.
From May 2024, the EPF overhauled its traditional two-account system by introducing a new “Flexible Account” (Akaun Fleksibel). This shake-up aims to help Malaysians balance short-term cash needs with long-term retirement planning.
Here’s a quick breakdown of the new three-account structure:
Account 1 (Akaun Persaraan): 75% of your monthly contributions. Untouchable until retirement.
Account 2 (Akaun Sejahtera): 15% of contributions. Funds can be withdrawn for education, housing, healthcare.
Account 3 (Akaun Fleksibel): 10% of contributions. The real game-changer – you can make withdrawals freely at any time.
But your Flexible Account doesn’t start out with any money. From 12th May to 31st August, EPF is giving a one-off option to transfer some savings from Account 2 into the new Account 3. How much depends on your current Account 2 balance.
For example, if you have RM30,000 in Account 2, you can shift RM10,000 into the Flexible Account. Those with smaller Account 2 balances can move up to RM1,000.
The appeal? Easy access to your cash for any purpose – new car, renovation, emergency expense? Just request a withdrawal of RM50 or more from the mobile app.
However, experts caution that this liquidity could spark retirement fund depletion. PM Anwar Ibrahim revealed worrying stats – 1 in 4 Malaysians burn through their entire EPF savings within 5 years of retiring.
With our longevity increasing, draining retirement funds so fast is a ticking time bomb. There are calls to raise the retirement age beyond 60 to help EPF savings last.
So while the Flexible Account offers welcome financial flexibility, don’t treat it like an ATM machine. Your future self will thank you for leaving the bulk of your EPF untouched to compound over decades.
Be prudent with withdrawals from the Flexible Account. Otherwise, you may join the ranks of retirees like 64-year-old Abdul Rahman who drained RM750,000 in just 7 years after leaving his job.
The new EPF structure gives you more control. But with great power comes great responsibility to secure your golden years. Utilize the Flexible Account wisely as a stop-gap, not to live beyond your means today.