Hello Grasshoppa,
With the recent announcement of EPF Account 3 by KWSP, they have restructured & renamed each account from Account 1 to Account Persaraan, Account 2 to Account Sejahtera & new Account 3 called Account Fleksibel. The introduction has brought mixed feelings among Malaysians on the new changes.
A look back at the previous structure of Account 1 & 2, the allocation was 70% & 30%. For Malaysians who want to opt for Account 3, it will be allocated based on Account Persaraan (75%), Account Sejahtera (15%) & Account Fleksibel (10%). To put it into numbers perspective, previously for RM100, it will be split into RM70 & RM30. The new optional structure will be RM75, RM15 & RM10 respectively.
As we know, the main purpose of EPF is for us to utilize it during our retirement age & prior to the introduction of EPF account 3, we had some level of flexibility to withdraw money from Account 2 to pay for some of the expenses within the allowed allocation & needs. With the Account 3 or Account Fleksibel introduction, members are allowed to withdraw money anytime with a minimum amount of RM50 through the app or EPF office.
While we can see this as a loophole or urgent fund that can be withdrawn by us anytime, should these options be considered by us knowing that the main purpose of our EPF fund is meant for our retirement? With the percentage that EPF pays us for our annual dividend, we can conclude that we will earn a comfortable 5% dividend annually. Any money withdrawn during this period will definitely affect our dividend income. Effective 11 May 2024 onwards, your EPF contribution will be based on the new structure & distribution rate. During the period from 12 May 2024 onwards until 31 August 2024, you can apply for a one-off transfer from your Account Sejahtera to your Account Fleksible.
Whether it is a good or bad thing for Malaysians, it truly goes back to the financial habits that you currently have. For those who have good financial habits, investments & savings plans, the Account Fleksibel is just an option for them to use in any type of emergency. But for those who have poor financial habits, this is another place for them to withdraw money as & when they are looking for ways to withdraw their money. It is a good & bad situation depending on the individual itself.
Stay financial savvy, Grasshoppa!
OSS!
