Not long ago, KWSP met up with the FMUTM people and announced that every single sen that goes out from KWSP to any EPF-appointed private fund management companies, the service charge will be capped at 3% (industry standards is around 6% for growth funds).
Very soon, another welcomed change would be implemented- each age level would have its own minimum savings limit in their Account 1.
In the previous system, regardless of your age, you must have RM 50,000 in your Account 1, and anything more than RM 50,000, you can take 20% of it to invest into a private fund. This would mean that you can only start investing your KWSP savings very much later in life, since not many people in the average workforce can accumulate RM 50,000 very early in their life (averagely 35-40 years old).
Coupled with the recent change of 3% service charge cap, this new change will enable many fresh graduates and young executives to utilize unit trust for better returns on their KWSP savings.
I just got a circular from one of the fund management companies that summarizes the new revised structure.
|
Age
|
Min Savings (RM)
|
|
18
|
1,000.00
|
|
19
|
2,000.00
|
|
20
|
3,000.00
|
|
21
|
4,000.00
|
|
22
|
5,000.00
|
|
23
|
7,000.00
|
|
24
|
8,000.00
|
|
25
|
9,000.00
|
|
26
|
11,000.00
|
|
27
|
12,000.00
|
|
28
|
14,000.00
|
|
29
|
16,000.00
|
|
30
|
18,000.00
|
|
31
|
20,000.00
|
|
32
|
22,000.00
|
|
33
|
24,000.00
|
|
34
|
26,000.00
|
|
35
|
29,000.00
|
|
36
|
32,000.00
|
|
37
|
34,000.00
|
|
38
|
37,000.00
|
|
39
|
41,000.00
|
|
40
|
44,000.00
|
|
41
|
48,000.00
|
|
42
|
51,000.00
|
|
43
|
55,000.00
|
|
44
|
59,000.00
|
|
45
|
64,000.00
|
|
46
|
68,000.00
|
|
47
|
73,000.00
|
|
48
|
78,000.00
|
|
49
|
84,000.00
|
|
50
|
90,000.00
|
|
51
|
96,000.00
|
|
52
|
102,000.00
|
|
53
|
109,000.00
|
|
54
|
116,000.00
|
|
55
|
120,000.00
|
Based on the table above, you can use the following formula to calculate how much you can invest your KWSP money into a privately managed fund:
Amount you can invest = (Amount of money you’ve in your Account 1 – Miniumum savings according to your age) x 20%
Example, a 29 year old with RM 50,000 in his Account 1 would be able to invest:
= (RM 50,000 – 16,000) x 20%
= RM 34,000 x 20%
= RM 6,800
If you find these calculations too troublesome, just bookmark this page as I’ll be updating the old kwsp investment calculator with a new one soon.
You might want to read these too...
- New KWSP EPF Investment Calculator
- EPF : Service Charges Capped at 3%
- Major Changes to Your KWSP Contributions
- Don't Mess with EPF
- Watch Your EPF Accounts Closely
- KWSP in English
- Changes in KWSP
- KWSP: We Tried to Help
