EPF Account 3 coming really soon!

[eeevie]

"Between 12 May 2024, and 31 August 2024, members will have a one-time option to transfer part of their Akaun Sejahtera savings balance to Akaun Fleksibel as an initial amount, and this action cannot be cancelled once completed."

How many of you will do nothing at all once the EPF Account 3 launch next week?

P.S: If you're interested in the in-depth details (they actually explained it very clearly on the official site)

https://www.kwsp.gov.my/w/epf-account-3-info

https://www.kwsp.gov.my/w/epf-account-restructuring-

 

[bournejason111]

@eeevie I'm gonna take some out then put it back to EPF for voluntary contribution.

 

[gopherking]

@bournejason111 Does this make sense from an income tax deduction basis or just a meme?

 

[amrie]

@gopherking YA2023 allowed you to claim tax relief for voluntary contribution of RM3k to EPF.

This would clash with the life insurance premiums tax relief though so if you already maxed out your life insurance premium tax relief, this voluntary contribution to EPF is redundant.

 

[bournejason111]

@amrie I feel like it's quite hard to max out life insurance tax relief though, since most of the premium is allocated to medical.

If your life insurance tax relief is maxed out, you can use it for PRS (3k until 2025?)

 

[sassy1]

@bournejason111

Since most of the premium is allocated to medical

That really depends on your insurance.

 

[amrie]

@bournejason111 Hmmm, I doubt you can use it for the PRS tax relief category. It specifically states that it is for "Deferred Annuity and Private Retirement Scheme (PRS)".

Even though I know that EPF is basically a retirement fund, EPF/KWSP is not a considered a PRS provider.

PRS Providers list | Private Pension Administrator Malaysia (PPA)

Do correct me if I'm wrong.

 

[bournejason111]

@amrie No I mean like actually using it for PRS if you have a PRS account.

 

[amrie]

@bournejason111 Oh lol.. That you can do

 

[asyncritus2]

@bournejason111 For life insurance tax relief, is it the same as Personal Accident insurance/takaful?

 

[lanel]

@bournejason111 Self satisfaction gonna do that too

 

[honeymoon]

@bournejason111

1. If you take money out of your EPF account, will it affect the dividend you get next year?
2. If taking money out does reduce your dividend, is that loss better than the tax savings you get from making voluntary EPF contributions?

 

[bournejason111]

@honeymoon

1. Yes but not by much if you immediately put it back since it's based on daily balance.
2. Assuming you make 100k annually and this puts you in the 70k - 100k tax bracket. The 30k is taxed at 19% so it's basically a 19% capital gain or 4000 * 19% = RM760

 

[angel6791]

@bournejason111 Late here, but this is genius! Do you know if the max is RM3k or RM7k? Cause in the life insurance + EPF portion, there is two segments that allow up to RM3k for one (life insurance + EPF) and RM4k for another (EPF). Am not sure what the difference is

 

[bournejason111]

@angel6791 The 2 portions are

Mandatory contributions to approved schemes or voluntary contributions to EPF (excluding private retirement schemes) or contributions under any written law (Restricted to RM4,000)

Life insurance premium payments or family takaful contributions or additional voluntary contributions to EPF (Restricted to RM3,000)

If you read the first one, it says "mandatory contribution" so this covers the EPF contribution that you deducted from monthly salary. Which is indicated in your payslip.

The 2nd one only covers life insurance + "voluntary contribution". This is the one we are talking about. So assuming you don't have life insurance, your first 3000 self contribution to EPF is tax deductible

 

[angel6791]

@bournejason111 Ooh I see. Cause for some reason in my 2023 Return Form, the "mandatory" segment has a statement that says "(mandatory + voluntary)" so not sure what that meant. Thanks anyway!

 

[djkatt17]

@eeevie Iphone pro max of course.

 

[cjegan2014]

@eeevie I'm taking out my bonus that went into epf. Rather put it in etf

 

[oioimoi]

@cjegan2014 Just curious which etf you'll be putting this in?

 

[hunter333]

@oioimoi S&P500 for life