Following the special announcement by the PM Dato’ Sri Ismail Sabri bin Yaakob on the special withdrawal of RM10,000. BusinessToday has contacted Financial Planning Association of Malaysia (FPAM) to seek of their comments and advisory on the latest announcement.
FPAM Vice-President II, Mr Rafiq Hidayat has reiterated FPAM’s stand on the special withdrawal i.e. it should only be made on a need-based basis.
“In my opinion, EPF contributors should consider whether there is a need for them to withdraw their EPF or not,” Rafiq Hidayat advised.
“What is meant by ‘need’ here?” He said.
He then elaborated on the context of ‘need-based’ withdrawal contributors’ EPF money, “If their income is severely affected by COVID-19 or flood, then yes, there is a need here.”
“For those who have utilized all their emergency savings, then the need of withdrawal arises,” he continued.
“For those who cannot pay their monthly commitments to financial institutions because of the moratorium has ended and due to their affected income by the pandemic, then there is a need to do so too,” he added.
“The announcement by the Prime Minister on the special EPF withdrawal of RM10,000 should only be taken up by those whose livelihood is severely affected by the COVID-19 pandemic. Otherwise, don’t withdrawl unnecessearily,” Rafid concluded.
Commented on those who have the intention to take up the special EPF withdrawal to do investment, Rafiq advised, “Withdrawal made for investment, the contributors must have an understanding of the risk involved in the investment. Every investment entails its associated risk,”
In essence, he advised contributors to carefully consider the aspects of risk / reward one can stomach, how much money you can afford to lose and the time-frame of your investment i.e. short-term or medium term.
“EPF has been known to give reasonably good returns to the contributors,” he said.
“If you don’t understand the risks that you are taking, even though you have extra money, my advice is not to take it out,” he concluded.
