Whilst Employee Provident Fund (EPF) savings are no doubt very important for retirement; there may be times in life when having access to a pot of money will make it just as important to withdraw it earlier.
If you have considered withdrawing your EPF money for prior use before the age of 50/55; here are some fast facts you should know to help you along.
1. There Are 12 Things For Which You Can Withdraw
Do you know just how many things you can withdraw your EPF for beyond retirement? We counted 12 and though a few of these may not apply to the masses; we'd like to highlight what may be the most important to you.
- Withdrawals for Housing: If you've been struggling to rent or are tired of dealing with landlords and agents; owning your own home may be high on your list of things to do. EPF allows you to withdraw lump sum amounts to cover downpayments, monthly instalments, principal repayments and even building a house from scratch.
- Withdrawals for Medical Payments and Equipment: Subject to the list of approved critical illnesses by the EPF board; you can make withdrawals to cover the cost of treatment and buying approved medical equipment not just for yourself but also close family members. Whilst we cannot stress enough the importance of having a medical insurance policy; this should at least help if you do not.
- Withdrawals for Education Including PTPTN: Has PTPTN been threatening you with CCRIS listings if you don't pay up? It's hard enough to pay for a nasi lemak these days, much less thousands of ringgit on an education loan but you can withdraw an amount from your EPF to keep them pacified until you're raking in the big bucks. Of course, EPF's education withdrawal is allowed for more than just PTPTN. Recognised institution tuition fees and other study loans are also allowed.
- Withdrawals for Those Leaving the Country: Have you found a job overseas and are giving up citizenship? EPF allows you to then withdraw your money. The same applies to foreigners who have worked in Malaysia but are returning to their home country. Whilst the requirement to renounce citizenship is a big decision; if you have made it - more money is always good to have.
2. Procedures for Withdrawal Are No Longer Lengthy
Although the exact procedure for each withdrawal and the documents required may be different; withdrawal of your EPF money is no longer an ardous process of days spent in the EPF office.
Check their website (more importantly the withdrawal page that applies to you) to find out just what you need to prepare and pay close attention to the terms of each withdrawal.
The reason some withdrawals become multi-part sagas is because people go in without first knowing what is required of them. In the dawn of the internet; most information is available to you at a click.
Once you've got the necessary forms and documentation, head to the nearest EPF office or send it in via post (we recommend going to the counter to avoid postal complications with your sensitive data!).
3. Web Forms Are Available for Select Withdrawals
For some of the most common withdrawals such as education and housing, you don't even need to move from your computer. EPF has invested in the creation of web forms for your ease of use.
Check out the main page of listed forms and you'll notice a bracketed indication of which withdrawal comes with a web form. It's as simple as filling in the details online.
Once you've done that, EPF will credit the money within the stipulated 2 weeks.
4. There is a Time and Amount Cap on (Most) Early Withdrawals
Save for selected withdrawals that involve permanent, life changing events, such as the one for leaving the country for good, there is a cap to how much you can withdraw and when.
For example, housing loan withdrawals are only allowed once a year and only from your Account 2 funds. This means that if you applied on say April 16th, 2014; you cannot apply to withdraw again until April 16th, 2015.
The amount is also limited to what you have in your Account 2 and subject to a minimum.
These requirements may differ for each withdrawal so do check with EPF before taking the day off to head to the branch (yes, we speak from experience).
If you're thinking of withdrawing; remember that EPF is important for your retirement and however much you can afford to leave in there will be helpful.
That said, it is also helpful to have a roof over your head in old age. If you're now ready with withdrawal forms to buy the house of your dreams - you'll need a good home loan to get you through. Aren't you lucky we've got a nice little home loan calculator and home loan comparison list to find you the best one!
Have we missed anything? Let us know in the comments!