Many EPF contributors believe that EPF withdrawals can only be made for purchasing a house. However, in reality, there are many other EPF withdrawals that you can benefit from, such as for education, healthcare, and so on.
Plan Your Retirement: Allowed EPF Withdrawals for Future Comfort
EPF allows full or partial withdrawals from savings to enable members to prepare for a more comfortable retirement. It is divided into two categories of allowed withdrawals: partial withdrawals or full withdrawals of EPF savings.
Partial Withdrawals of EPF Savings
These withdrawals are allowed for contributors who are below 55 years old. Here are some of the permitted withdrawals from Account 2.
1. Withdrawal at Age 50
When you reach the age of 50, you can make EPF withdrawals either partially or in full from Account 2. The withdrawn funds can be used as preparation for your retirement.
You can also choose to withdraw savings from Account 2 to finance your higher education, spouse, children, and/or parents. However, it is subject to approved educational institutions within and outside the country. You can withdraw the entire savings in Account 2 (whichever is lower) to cover costs such as:
- Tuition fees and charges imposed by educational institutions;
- Outstanding education loans;
- Hostel and accommodation fees;
- One-way flight for first-year students studying outside the region/country.
Muslim individuals who are planning to perform the Hajj pilgrimage can withdraw funds from Account 2 to cover expenses. This is to supplement insufficient savings in the Lembaga Tabung Haji (Hajj Fund).
4. Reducing or Settling Housing Loan Balance
You can also make EPF withdrawals from Account 2 to reduce or settle your housing loan balance or that of your spouse.
5. Home Purchase
EPF also allows withdrawals from Account 2 to finance home purchases. This decision enables members to acquire properties for a more comfortable retirement. To learn more, you can follow the article on withdrawals from Account 2 for home purchases.
6. Building a House
If you wish to construct your dream house, EPF also allows members to make withdrawals from Account 2 to finance the construction of a house.
7. PRIMA Housing
These EPF withdrawals are only for financing PR1MA homes, and the payment will be credited directly to the financial institution.
8. Monthly Housing Loan Installments
To assist homeowners in easing their financial burden, EPF also allows withdrawals for Monthly Housing Loan Installments. This is to help homeowners facing financial difficulties in paying their monthly installments. The monthly housing loan installment will be paid for a minimum period of six months or until the financial issue is resolved.
9. Flexible Housing
You can utilize your EPF savings to qualify for a higher housing loan amount from financial institutions. A portion of the savings in Account 2 will be allocated to the Flexible Housing Loan Account.
During the loan eligibility assessment, financial institutions will consider your monthly EPF contributions as part of your income.
The cost of healthcare can be quite expensive and can incur high expenses. EPF allows members facing health issues to make withdrawals from Account 2.
These EPF withdrawals can be used to finance the costs of critical illness medical treatment and/or approved healthcare assistance equipment, including fertility treatments.
11. Savings Exceeding RM1 Million
If you have savings exceeding RM1 million, you are given the flexibility to make withdrawals and manage the excess savings on your own. This way, you can choose and diversify your investment portfolio according to your own risk assessment.
Full Withdrawal of EPF Savings
Full withdrawal of EPF savings is allowed for contributors who have reached the retirement age of 55 and above. You have the option to manage your retirement funds through either a full withdrawal or flexible withdrawals. Here are some of the permitted EPF withdrawals.
12. Withdrawal at Age 55
When you reach the age of 55, the contributions in your Account 1 and Account 2 will be consolidated into Account 55. You can withdraw all or a portion of the savings from this account at any time. If you choose to continue working after the age of 55, the contributions received thereafter will be credited to the Golden Account, which can only be withdrawn once you reach the age of 60.
13. Withdrawal at Age 60
These withdrawals are an extension of the age 55 withdrawal. They cater to the needs of members who choose to continue working beyond the age of 55 and extend their retirement age.
At the age of 60, all accumulated savings in Account 55 (if any) and the Golden Account will be consolidated for withdrawal.
You can choose to make a lump-sum or partial withdrawal at any time to finance your retirement.
14. Retired Workers or Optional Retirement
Public sector employees can make a one-time EPF withdrawal before the age of 55 after being granted Retired Worker status.
Withdrawal of all EPF savings can also be made if you become physically or mentally disabled to the extent that it hinders you from working. For eligible members, you will receive RM5,000 as Disability Assistance to alleviate your burden.
16. Leaving the Country
Members who have renounced or lost their Malaysian citizenship to migrate to another country, expatriates, permanent residents (PR), or foreign workers returning to their home country can withdraw all their EPF savings.
If you pass away, your EPF savings can be used to alleviate the financial burden and cover funeral expenses.
If you have not made any nominations, it is encouraged to do so. This will allow your closest beneficiaries to withdraw the KWSP savings without any difficulties.
Dependents under your care will also be considered to receive Death Assistance payment to help them during difficult times.
If you have any questions or need further information regarding partial or full EPF withdrawals, you can visit the EPF website.
Savings for the Future, Apply for Withdrawals Through i-Akaun EPF
EPF withdrawal applications can be made manually by filling out forms at the counter or kiosk. You can also apply for withdrawals online through i-Akaun EPF. For more information regarding the EPF withdrawal process and the required documents, please visit the EPF website.
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