EMPLOYEES Provident Fund (EPF) contributors with less than RM10,000 in their retirement savings are not perturbed because they feel they still have enough time to earn and grow their nest egg.

They told The Malaysian Insight they withdrew from the retirement fund through i-Sinar and i-Citra schemes during the Covid-19 pandemic to help them through a difficult period, but many also said they reinvested the money in other schemes.

Those below the age of 30 said they are not concerned about having little money in their accounts because they could still earn enough money to save for retirement.

EPF said on Friday that 46% of contributors below the age of 55 have less than RM10,000 in their accounts.

That is about 5.8 million contributors, it said.

Among these contributors, 19% have less than RM1,000 while 18% had between RM1,000 and RM5,000 in their retirement funds.

About 9% have between RM5,000 and RM10,000, EPF said.

Muhammad Irsyad Mohamad Hatib, 29, told The Malaysian Insight he has had no choice but to use his savings because of financial difficulties.

He was confident he could replenish the money in a couple of years.

“I am still contributing to EPF every month. At my age I can save more but I need to continue working and I will, because I have a family.

“I am not too worried about it. I am still young and there are 20 years for me to work,” said the quality assurance officer.

Farisha Amiera, 23, mirrored Irsyad’s views, saying that she is not too worried about her future after withdrawing from both the i-Sinar and i-Lestari schemes.

“I think I am one of those who have less than RM10,000 in their savings but I have made some calculations and find that when I retire, I will have enough savings,” Farisha said.

“However, that depends on how much longer the pandemic will affect us. I withdrew from the two schemes for my daily expenses and I did some shopping. I was jobless for three months,” said the veterinary assistant.

Since the Covid-19 epidemic struck last year, the government has allowed EPF contributors whose income was affected by lockdowns to withdraw some of their retirement funds through the i-Sinar and i-Lestari schemes.

In June, the government introduced the i-Citra scheme under the Pemulih economic stimulus plan for EPF contributors below the age of 55.

It allows them to withdraw up to RM5,000 from their accounts 1 and 2. The sum is disbursed over a period of five months.

Five million contributors have applied for the i-Citra facility and RM20.8 billion has been approved for withdrawal, with RM9.1 billion disbursed to date.

Under i-Sinar, RM58.5 billion was disbursed to 6.6 million applicants.

Reinvestment

Vinoth Kumar, 37, said he reinvested the money he withdrew from his EPF savings.

He said he applied for both i-Sinar and i-Citra due to financial constraints during the pandemic.

“My future plan is to save more money and invest in other financial schemes. Of course, I will look for qualified schemes,” he said.

Wei Lian, a 47-year-old part time administrative officer, said she applied for the two schemes but decided not to spend the money.

Instead, she put the money in a fixed deposit account.

“At first I thought I would not qualify for the scheme but it was approved. I put the money in a fixed deposit so it could grow.”

Noonurulatika, a property adviser, is also not too concerned about her retirement because she contributes a large amount monthly to the EPF.

“I took out money from the EPF but I invested some of it. I am still contributing and my company also contributes for me,” the 31-year-old said.

Anne, a freelance editor, said she and her husband made extra money by making YouTube videos during the pandemic.

She admitted she is concerned about her retirement and said she is working extra hours to make more money.

“My husband and I make videos or vlogs on Youtube to generate income. I take any freelance job I can get and my plan is to invest in a unit trust,” Anne said.

“I am still paying for my PTPTN loan so this is quite a challenge for me at this time.”

Former EPF chief executive officer Tunku Alizakri Raja Muhammad Alias previously warned against dipping into one’s retirement funds as that could leave a person without enough money to live on in his old age.

EPF chief executive officer Amir Hamzah Azizan said in a statement that withdrawals through the i-Sinar and i-Citra schemes have amounted to RM67.6 billion.

Amir said there has been a significant drop in members who meet the minimum savings threshold of RM240,000 at age 55.

“The drop from 36% to 27% (is) pursuant to the Covid-19-related withdrawals to supplement their income during the crisis,” he said.

Amir said there will be “far-reaching consequences” for these EPF contributors and the government. – September 28, 2021.