Why should I invest my EPF?

June 12, 2008 at 10:21 am · Filed under financial freedom ·Tagged epf, investment, retirement

Based on the news update from KWSP website, more and more peoples are now starting to invest a part of their EPF in unit trusts.

“A total of 42,800 Employees Provident Fund (EPF) members invested a combined RM461 million in unit trust and other approved instruments under the Members’ Investment Scheme in the first three months of this year”

If you have read the article from TheStar not long ago, you will know that less than 5% of Malaysians have more than RM1,000,000 in their EPF account during retirement. Only during retirement, a lot will realize that the funds from KWSP is insufficient to get them through another 25 years if not lesser. This however depends on your own living cost. To cope with high living cost now, many will still opt to work harder even after their retirement age just to make ends meet. When you were younger, you may have various retirement plans like utilizing your EPF funds, or to depend on your children. It may sounds reasonable at this point of time but we wouldn’t be able to predict future. What if your children is also trying to make end meets too by your retirement time? Would you be happy to increase their burden? You may even come up with the most ridiculous retirement plan but believe me, only an early and proper financial planning can ensure an enjoyable retirement.

Benefits of investing your EPF:

1. You get capital growth and dividends instead of only dividends
2. If you start investing young, you have plenty of time to see your money grow and also with longer time horizon, it also means that the risk is minimized with proper monitoring
3. Some unit trusts funds comes with free insurance
4. Instant diversification of your EPF funds which means more opportunities and less risky
5. Low service charge that capped at 3%

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