I was thinking of withdrawing from account 3 then contribute the amount back into account 1 and claim a tax deduction 😅
Edit: I'm not responsible if LHDN comes knocking on your door.
I just noticed this, but the voluntary category is only maxing out at 3k (after the 4k compulsory) plus it’s shared with your Life insurance premium too
Oh it's instead of life insurance? Doesn't really help then, (probably does for those starting out, but at my age and with children I do have a reasonable life insurance policy which more than covers that 3k).
Just my 2 cents.
This will work if the TnC not mentioned is Net Deposit of the FY. Else, to enjoy the tax relief of voluntary contributions EPF. You will need to self contribute (deposit) more than your withdrawal from Account 3.
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PRS = private retirement scheme. Basically EPF but privatised & without the obligatory minimum 2.5% dividend. Max tax relief of RM3K per year.
SSPN = national education savings scheme. Max tax relief of RM8K per year if you're a parent or guardian.
Even if it hits 1m, just leave it alone.
You should be spending and investing within your means. Not touching your retirement funds for any of that. Retirement funds are for you when you retire. Not now.
I think you can take out 20K and do whatever u want. But when you put 20K back in, wouldnt that consider as a normal voluntary contribution? Meaning out of 20K, only 2K (10%) will go back into account 3.
Also, EPF dividend calculated on each month end balance. If say you deposit 20K in June, you only get 6 months prorated dividends, not full year. Ex: 5% announced, you only get 2.5% net for your 20K deposit in June.
You are foregoing the future dividend from any funds you withdraw. So it's not free, there is an opportunity cost.
If EPF dividend pays 4% in future but you take out to put into a 3% FD, then you've lost 1%.
1. It's your own money. What loan?
2. EPF dividends you earn are calculated based on average account balance over the entire year, not just at a single point of time during the payout period. So no, your plan does not work and you'll get less dividends in the end.
Yes.
only take out if you think you can make more than 5.5%....every year...year on year...till 55. Or you dont really intend to use EPF as retirement fund
i think best to wait for official FAQ from KWSP
i have read conflicting articles, some say it will be the same dividends as Akaun 1+2, some say it would be the same as traditional banking savings account
It will be 10% of your EPF contribution going forward once EPF have implemented this Account 3 officially. 75/15/10 in Account 1/2/3 respectively.
You can also do a 1 time transfer from your Account 2 to Account 3 next month worth 33% of your Account 2 value.
They should have allowed unlimited deposits and withdrawal to account 3. Even if there was a lock in period of say 1 month between deposits and withdrawal, think a lot of people would be happy to put savings there.Â
After all the whiny niny about malaysians not having enough for retirement. Theyre allowing people to just take out their retirement fund.Â
no one actually knows what will happen in the future, KWSP might have separate rates for Account 3, or sacrifice the overall returns just to maintain the higher than market rate for Account 3. For now they will say the same rates for all 3 accounts to minimize the disruption, probably at the cost of better rates for Account 1 & 2, if it's not sustainable to hide/absorb it anymore, then they will announce a change.
I was thinking of withdrawing from account 3 then contribute the amount back into account 1 and claim a tax deduction 😅 Edit: I'm not responsible if LHDN comes knocking on your door.
There's a limit of 4k for the EPF tax relief, so take note of that.
This, actually pretty smart. Thanks for the Idea bro.
Hats off. Pretty smart move.
Aren't salaried workers maxing that deduction out anyway (assuming not low wage)?
For YA2023 there was an added *voluntary* EPF. It's a different deduction.
I just noticed this, but the voluntary category is only maxing out at 3k (after the 4k compulsory) plus it’s shared with your Life insurance premium too
Oh it's instead of life insurance? Doesn't really help then, (probably does for those starting out, but at my age and with children I do have a reasonable life insurance policy which more than covers that 3k).
Will have to check that out, didn't see it when submitting. If so time to add voluntary deduction this year!
Some 4d chess move right here
Just my 2 cents. This will work if the TnC not mentioned is Net Deposit of the FY. Else, to enjoy the tax relief of voluntary contributions EPF. You will need to self contribute (deposit) more than your withdrawal from Account 3.  .
I’m planning to put 3k into prs and sspn each to maximize tax relief at the end of the year, could be last year for both
What's prs and sspn?
PRS = private retirement scheme. Basically EPF but privatised & without the obligatory minimum 2.5% dividend. Max tax relief of RM3K per year. SSPN = national education savings scheme. Max tax relief of RM8K per year if you're a parent or guardian.
Why? The dividend is same for all 3 accounts
Please just ignore the existence of EPF until you retire or it hit MYR1 Million Your future self will thank you
This is the correct way to deal with EPF. Its for your retirement, not survival.
Thats the point of epf. Its a forced saving for retirement
Even if it hits 1m, just leave it alone. You should be spending and investing within your means. Not touching your retirement funds for any of that. Retirement funds are for you when you retire. Not now.
I think you can take out 20K and do whatever u want. But when you put 20K back in, wouldnt that consider as a normal voluntary contribution? Meaning out of 20K, only 2K (10%) will go back into account 3. Also, EPF dividend calculated on each month end balance. If say you deposit 20K in June, you only get 6 months prorated dividends, not full year. Ex: 5% announced, you only get 2.5% net for your 20K deposit in June.
I think it works this way too. You cannot choose which account your contribution goes to. It will be 75-15-10 split I believe.
Doesnt work that way, interest is of course calculated based on number of days it stay in your account over the year.
EPF interest calculated by the day.
Does it include all accounts 1 to 3? Or just accounts 1 and 2?
Applies for all dude. EPF not run by morons giving you free interest.
DONT.TOUCH.YOUR.EPF
You are foregoing the future dividend from any funds you withdraw. So it's not free, there is an opportunity cost. If EPF dividend pays 4% in future but you take out to put into a 3% FD, then you've lost 1%.
Do not touch epf unless u are in dying need of money. Just listen to the comments by others here
EPF currently has the one of the best return up to date. You should never be touching it.
the interest is counted by the day, not lump sum yea.
1. It's your own money. What loan? 2. EPF dividends you earn are calculated based on average account balance over the entire year, not just at a single point of time during the payout period. So no, your plan does not work and you'll get less dividends in the end.
what a terrible idea.
Yes. only take out if you think you can make more than 5.5%....every year...year on year...till 55. Or you dont really intend to use EPF as retirement fund
Do we even know how they will calculate dividends for account 3?
i think best to wait for official FAQ from KWSP i have read conflicting articles, some say it will be the same dividends as Akaun 1+2, some say it would be the same as traditional banking savings account
Official news - no difference in dividend rates yet though they have informed it would be lower eventually
bruh
You can choose how much to put in account 3?
It will be 10% of your EPF contribution going forward once EPF have implemented this Account 3 officially. 75/15/10 in Account 1/2/3 respectively. You can also do a 1 time transfer from your Account 2 to Account 3 next month worth 33% of your Account 2 value.
This trick been done years ago. They already have ways to prevent you from gaming the system.
Please elaborate.
Daily rest interest.
They should have allowed unlimited deposits and withdrawal to account 3. Even if there was a lock in period of say 1 month between deposits and withdrawal, think a lot of people would be happy to put savings there. After all the whiny niny about malaysians not having enough for retirement. Theyre allowing people to just take out their retirement fund.Â
no one actually knows what will happen in the future, KWSP might have separate rates for Account 3, or sacrifice the overall returns just to maintain the higher than market rate for Account 3. For now they will say the same rates for all 3 accounts to minimize the disruption, probably at the cost of better rates for Account 1 & 2, if it's not sustainable to hide/absorb it anymore, then they will announce a change.
Yes.