Peace of mind for golden years

Financial foresight: Contributors queueing up at the EPF branch in Shah Alam. — AZMAN GHANI/The Star

PETALING JAYA: Many workers in both the formal and informal sectors plan to contribute more to the Employees Provident Fund (EPF) to assure an easier retirement.

Fund members taking part in the voluntary contribution programme said it is a prudent and stable way to save for the future, while also providing reasonable returns and peace of mind.

Food stall operator Nokhairiah Awang Kechik, 53, said she will consider increasing her voluntary contribution to EPF by an extra 5% to 10% monthly.

She said the EPF savings are important to her as she has plans to use them when she retires soon.

“Despite operating my own small business, I still contribute to EPF so that I have comfortable savings for my retirement.

“I only make small contributions monthly, but maybe after this I will consider increasing it by up to 10% more than what I contribute now,” said the woman from Pahang who has been operating her business since 2010.

Nokhairiah added that the dividend rate announced on Sunday was satisfactory and she was hopeful that it would improve even more.

“Despite only a small increase in dividend compared with previous years, I will still continue to contribute.

“I also encourage other fellow small business owners to do the same because as an owner, we tend to forget to do financial planning for our future and focus too much on ensuring our business is sustainable,” she added.

The EPF dividend rate for 2023 was 5.5% for conventional savings and 5.4% for syariah savings; the payout for conventional savings is RM50.3bil while for syariah savings, it is RM7.5bil. This is higher compared with 2022 when EPF had declared a dividend of 5.35% for conventional savings with a payout of RM45.44bil, and 4.75% for syariah savings, with a payout of RM5.7bil.

There was also an increase of 17.2% in voluntary contributions, with 133,000 members participating in the voluntary programme.

Operations lead Ku Anis, 25, said she is already regularly contributing extra into EPF.

“It is a good long-term plan and I am actually planning to contribute even more,” she said, adding that she hopes to contribute up to 20% of her monthly income.

K. Kumaresan, 39, a phailing rider, said he would consider increasing his voluntary EPF contributions to grow his savings.

“After learning the dividend rate on Sunday, I’m considering adding more cash to my monthly contributions.

“As a food delivery rider, on good days, I might generate higher income than other days, meaning I will have extra cash,” he said.

“Some of my friends prefer not to contribute, and I understand why. They want to keep more money on hand to deal with living expenses.

“But in my case, I need to also consider my future. By contributing monthly, I would be able to have peace of mind,” Kumaresan said.

However, freelance content creator Zulaikha Jamal, 29, prefers having extra cash in her hands rather than depositing it into her EPF account.

She said this is to ensure that she can easily access the money for emergencies.

“I quit working at a company as I found out that freelancing could provide me with a better income,” she said, adding that she can generate at least twice the income freelancing than she would receive working in a company

“I do have an EPF account but at the moment, I prefer having cash instead. I could use it during any emergency situations,” she said, adding that the higher cost of living now is also a factor in not wanting to contribute more to EPF.

Acknowledging the risks of not having a retirement safety net, she said that she is also exploring investment opportunities to grow her earnings to ensure that she has enough in the future.

Another freelancer who wishes to be known only as Lee said that she does not contribute to EPF anymore as her income is not stable.

“I have an EPF account from the time I was employed, but for now I prefer to have more freedom with the cash I have,” she said.