Last month, I had mention about the new ”Beyond Savings” initiative that had been introduced by the Employees’ Provident Fund (EPF) and which would come into effect on 1 Feb 2008.
One of the enhancements in this new strategic initiative is the introduction of the concept of “basic savings”. The understanding of this concept will enable you to determine the minimum sum that you, as an EPF member, will be allowed to withdraw from your Account 1.
Basic savings is an amount to be put aside in your Account 1 that will grow progressively at various pre-determined age levels to enable you to accumulate a minimum savings of RM120,000 by the time you reach the age of 55.
Accordingto th EPF, a member will need to have a basic savings amount at the predetermined age levels, and the amount in excess of the basic savings can then go into investments offered by fund managers approved by the Ministry of Finance.
But there are two main conditions involved.
Firstly, you can invest not more than 20% of your credit in excess of Basic Savings in Account 1. The investment must be made in products through approved fund managers. Normally, this will mean the Unit Trust or Mutual Fund companies.
Secondly, the minimum amount of savings that you can withdraw is RM 1,000. The withdrawals can be made at intervals of three months from the date of the last transfer, subject to the availability of the Basic Savings required in Account 1.
To have a better idea of the amount of basic savings which you must have, here is a table to help you:
|
Age |
Basic Savings |
Age |
Basic Saving |
|
18 |
1,000 |
37 |
34,000 |
|
19 |
2,000 |
38 |
37,000 |
|
20 |
3,000 |
39 |
41,000 |
|
21 |
4,000 |
40 |
44,000 |
|
22 |
5,000 |
41 |
48,000 |
|
23 |
7,000 |
42 |
51,000 |
|
24 |
8,000 |
43 |
55,000 |
|
25 |
9,000 |
44 |
59,000 |
|
26 |
11,000 |
45 |
64,000 |
|
27 |
12,000 |
46 |
68,000 |
|
28 |
14,000 |
47 |
73,000 |
|
29 |
16,000 |
48 |
78,000 |
|
30 |
18,000 |
49 |
84,000 |
|
31 |
20,000 |
50 |
90,000 |
|
32 |
22,000 |
51 |
96,000 |
|
33 |
24,000 |
52 |
102,000 |
|
34 |
26,000 |
53 |
109,000 |
|
35 |
29,000 |
54 |
116,000 |
|
36 |
32,000 |
55 |
120,000 |
Hopefully, this table will be clear enough. If you have more questions, don’t hesitate to call your unit trust consultant for more news about this!