Is EPF the best low risk investment for people above 60 y/o?

[treegreentrey]

was just thinking, is EPF the best low risk investment for people above 60 y/o? They’re at the age where they can withdraw money without any restrictions. EPF has a decent return averagely around 5% for the past 10 years. This is much more favourable than FD as well. Thoughts? Any other low risk investment competes against EPF for folks above 60?

 

[dazza_73]

@treegreentrey I'd say yes because at 60 you have very little margin for error because you no longer have the time or energy to recoup any significant losses. Low but safe is the way to go. EPF is definitely the best I can think of at the top of my head.

 

[letters2words]

@treegreentrey Yup not only is the capital guaranteed but there is also minimum guarantee on returns at 2.5%. The crazy thing is people don't realise how good it is and still take out their entire EPF savings upon retirement! A relative of mine took it all out and now is looking for ways to put it all back in...

 

[ant101]

@letters2words Once you withdraw, the limit of 100k per annum still applies if you want to put it back in. So your relative can slowly put back 100k every year

 

[letters2words]

@ant101 Yeah they are slowly putting it back in every year. So they feel pretty silly right now

 

[lumenlight]

@treegreentrey above 60.. you can start withdraw with more flexibility so yes epf is your way... no point go gaming with the bank.. and kinda pointless go for preferred banking or private

 

[ineedadvice101]

@treegreentrey Its not an investment, its a pension fund. Where you want to find something that grantees your capital and allows you to withdraw anytime with that kind of interest rate?

If you look at the last 10 years, average interest rate is actually 6% not 5%.

Say I have RM 2M inside, every year I get RM 120k on average in interest. Already more than many people's salary. Why need to risk elsewhere and lose my capital?

All those rich and smart people self contribute max RM 100k/year. Its free guaranteed money.

 

[russman]

@ineedadvice101 Long term returns since inception is 5.5%, but it's still pretty incredible when you account that there are NO years where you lost

 

[ineedadvice101]

@russman Its by design. Interest rate about 5 yo 6% a year and guaranteed no losses.

Likely one of the best pension funds in the world.

 

[bhickey777]

@ineedadvice101 Hmmmm... But then MBB punya shares can get up to an average of 6%? Why dun go for this? Some more quite stable ah....

 

[ineedadvice101]

@bhickey777 Shares fluctuate. Nobody stopping you from buying MBB. Its just a discussion.

 

[riet]

@treegreentrey Yes. I have 40 years worth of expenses inflation adjusted in EPF. Retired. That being said I still have 20 to 25% in foreign equities

 

[resjudicata]

@treegreentrey I am maximising my EPF with 100k self contribution, who else pays 6% with low risk?

 

[amrie]

@resjudicata Only downside for younger ppl below 55 or 60 (can’t rmb) is if you need the liquidity which EPF is the opposite of liquidity. If it’s money you know you will never need before that, then by all means contribute to EPF.

 

[amrie]

@treegreentrey Yup, very safe and you can withdraw it if you're above 60

 

[nerfherder]

@treegreentrey Kinda; leave some as cash inside after pencen and if you need to withdraw, head to their branches. If diversify, then FD to be safer (but lower returns) and ASB/ASW if got slots.

 

[stcimrgans01]

@treegreentrey Yes. EPF was green even during COVID year.

 

[russman]

@treegreentrey Yes, because there's 0 risk, it's better than bonds

 

[maxx55]

@treegreentrey IMO yes. The key grouse most people have with putting funds into EPF is the illiquidity, which ceases being an issue once you reach 55 years old because you’ll be to withdraw it for use easily anytime. With the partial withdrawal option, it kinda works like a high interest risk-free savings account.

 

[ravensfan]

@treegreentrey Above 60 or retiring within the next ~10 years is fine as you can still withdraw any time and/or very soon. Any longer than that, expect the ringgit to dump some more. Yea you're getting 5%, but that is on a currency whose value has been consistently dumping since inception.