In life, everyone has their own financial goals. We all have big dreams we want to achieve, such as buying a house, getting our dream car, or traveling the world. However, we often hold ourselves back from dreaming because we think these ideas are out of reach. The truth is, most dreams can become a reality if we turn them into goals and work towards them.
When it comes to achieving these goals, there are several options to consider. You can start by opening a dedicated savings bank account or exploring investment plans, both of which can provide a solid foundation for your financial journey. Additionally, some individuals have found value in saving through investments in gold and silver. By diversifying your investments and savings, the poor performance of one investment can be balanced out by the better performance of another. This helps achieve a more consistent overall return, minimizing the impact of any single investment's performance. But did you know that your savings in EPF are a great example of how your funds can be diversified while keeping them in one place? Yes, it’s true! EPF uses your savings to invest in various investment portfolios, such as stocks, bonds, and real estate, which helps diversify your funds and maximise the potential of your returns. By entrusting your savings to EPF, you benefit from our expertise in managing and diversifying your funds, giving you the opportunity to grow your savings over time.
Benefits of growing your money with EPFIn addition to your regular monthly employee’s and employer’s contributions, you’re also encouraged to take the initiative to boost your EPF savings voluntarily. The best part is that saving with EPF is a hassle-free process, and there are two convenient options available: Voluntary Contribution and Voluntary ExcessThese options make it incredibly easy for you to proactively increase your EPF savings and secure a brighter financial future.
What’s more, the maximum savings amount for Voluntary Contributions has recently been increased from RM60,000 to RM100,000 per year. This adjustment allows you to save more, offering greater potential to achieve your financial goals in a shorter timeframe.
In addition, Voluntary Excess (VE) is when you or your employer choose to contribute above the statutory rate. All you have to do is inform your employer of your decision to contribute more. This choice simplifies your saving process, as you no longer need to manually save every month. Moreover, it enables consistent savings since the contributions are made automatically.
For example:Zura, a recent graduate working at an electronics company with a monthly salary of RM 4,500, expresses her desire to contribute more than the statutory rate of 2% (RM 90) per month through Voluntary Excess. This results in a monthly contribution of RM1,170, and her accumulated savings until December amount to RM 14,040. Assuming a 3% EPF dividend rate for that year, the total dividend received is RM 421.20, bringing Zura's total savings for the year to RM 14,461.20.
Now, consider another scenario: if Zura decides to boost her savings by making voluntary contributions of RM 50 every month, her total savings by the end of the year would be RM 13,560. Assuming a 3% dividend rate for that year, Zura would receive dividends of RM 406.80, resulting in her total savings increasing to RM 13,966.80.
Through this example, you can see how the implementation of Voluntary Contribution and Voluntary Excess can increase your savings. This indirectly provides a solid financial confidence for your retirement days.
Why should you increase your savings with EPF?You might be wondering why saving in EPF is a wise decision. This is because, it offers you with a unique 2-in-1advantage: not only you can save your money, but also gain a range of additional benefits, including: 1. Competitive annual dividend returnsEPF offer compelling annual dividend returns, estimated to be around 3% to 4% in profit, with the possibility for further increase. Additionally, the minimum dividend rate is 2.50% for Simpanan Konvensional. This plays a vital role in boosting your savings and contribute significantly to the growth of your wealth accumulation over time.
2. Secured investment for your retirementEPF is a federal statutory body that offers secure and reliable investments. It helps you save consistently for retirement, ensuring financial security in your post-retirement life.
3. Alleviates your living expensesYou have the flexibility to make withdrawals from your EPF savings for a wide range of purposes if you fulfil the conditions. The withdrawal schemes available within EPF includes Housing Withdrawals, Education, Health, and more.
For example, Education Withdrawal specifically allows you to finance your educational expenses, such as paying for tuition fees or paying off your PTPTN loans. This grants you the freedom to utilise your savings to meet your needs, leveraging the withdrawal schemes available within EPF.
4. Enhanced retirement savings Your family can also make contributions on your behalf through the Akaun Persaraan Top-Up Savings Contribution facility, allowing you to boost your retirement savings beyond your own contributions, hence securing your financial future.
Start saving now to secure a better future for yourself. Regardless of the saving types you choose, it's important to manage your money wisely. By doing so, you can make the most of your savings and pave the way for a financially secure future.