KUALA LUMPUR: The new policy announced by the Employees Provident Fund (EPF) allowing a minimum withdrawal of RM100 per month will give an option for contributors to avoid overspending.
This policy would benefit contributors with small EPF savings to better manage their finances in comparison to the RM250 minimum monthly withdrawal previously.
A public relations officer from Setapak, Rashdan Mustafa said as he was from the urban poor category, the minimum withdrawal amount would keep him grounded beside assisting him during emergencies.
“If I am desperate to use the money for my daily expenses, I can withdraw the RM100 and leave the rest in my EPF account. It will definitely teach me how to spend my money wisely.
“I do not have much in my EPF account, so this is a good way for me not to overspend,” said the 57-year-old.
Many also breathed a sigh of relief with the announcement as it could help them cope with the high cost of living.
A sales marketing and project administrator Prem Nizah Mat Tazin said her plan was to use the money for emergency purposes such as medical treatment.
“I have plans on how to manage my finances, as I also have other savings accounts and not dependent on my EPF savings.
“With the rising cost of living and expensive healthcare bills, at least, I can rely on this option,” said the 51-year-old.
Prem added that for a long-term plan, she would use the money for her “umrah” (minor haj pilgrimage) trip to Mecca.
Another EPF contributor, Muhammad Nadzrein Johari said he could use the money to pay for his children’s education as the cost increased each year.
“My children are still young, and my plan is to use the money as a backup when they continue their studies at universities,” he said.
Meanwhile, the Federation of Malaysian Consumers Associations secretary-general Datuk Paul Selvaraj said financial knowledge must be given to those who are allowed to withdraw their EPF savings.
He said retirees needed to know how they should manage their funds although they were now allowed to make partial withdrawals of any amounts any time starting January next year.
“We need to acknowledge that no amount of money is going to be enough for retirement.
“Malaysians tend to spend their money for enjoyment but do not have good financial management.
“That being said, we need to start teaching the youths to manage their money properly,” he told the New Straits Times.
Malaysian Employers Federation executive director Datuk Shamsuddin Bardan said he feared with such withdrawal flexibility, it would not change the current scenario where many retirees had little savings to get through the age of 75.