From now until 30 April 2022, the Employees Provident Fund (EPF) is granting that those who wish to withdraw their savings may apply through the Special Withdrawal facility. According to the EPF, members under the age of 55 will be able to apply for the withdrawal facility from 1 April to 30 April 2022, with payment beginning on 20 April 2022.

Members are allowed to withdraw a maximum amount of RM10,000 and a minimum of RM50, and must fully utilise their savings balance in Account 2 first before accessing Account 1.

However, members are highly advised to save their savings until it is necessary, since the current RM10,000 may be more than triple the amount in 30 years!

These are a few good and bad sides to this move:

1. Coping With Financial Emergency

The pandemic and the recent floods have caused many to be in difficult situations. However, the special EPF withdrawal and financial aid for flood victims can help ease their burdens.

2. Avoid Adding More Debt

Resolving your financial issues through credit card & bank loan might harm your CCRIS and your future loan approval rate, But with EPF withdrawal, you're safe from interest and your CCRIS and loan approval rate won't be affected.

3. Stimulates Economic Growth

If people are allowed to withdraw EPF, this will increase their spending power and hence stimulate economic growth.

4. Old-Age Poverty

Research has found that the retirement savings of many EPF members are critically insufficient. Additionally, with the withdrawals via i-Sinar & iCitra, many members will not have much savings left for retirement, increasing the possibility of Old-Age Poverty.

5. Compound Interest Loss

EPF has a higher interest rate than fixed deposits. So assuming that you withdrew RM10K and the interest rate is 5.98%, you would lose out on RM57,110 after 30 years.

6. Late Retirement

After many EPF withdrawal schemes during the pandemic, many members' savings are affected and possibly only 3% of EPF members can afford a retirement life while others are required to opt for late retirement.

7. You May Never Replenish The Gap

By EPF terms, all contributions of members who had made withdrawals will be credited into Acc 1 until the withdrawn amount is replenished. If your salary is RM2K with an 11% contribution rate, you will need about 4 years to fill the gap.