Having RM1 mil in EPF has huge benefits.

If you achieve it before 55, EPF allows you to withdraw any excess savings anytime.

Say you’re 49 this year and have RM1.1 million in EPF, you can withdraw RM100,000 without any conditions.

This makes it a flexible fund that is 2-3 times better compared to traditional fixed deposits.

EPF’s historic returns are impressive.

With RM1 mil, you’ll receive RM55,000 in dividends every year, or RM4,583 per month.

This is more than enough to retire right now according to the Belanjawanku Study.

But how difficult is it to achieve RM1 mil, really?

If you started working at 22, you’ll hit this milestone by 55 if you:

• Earn a salary of RM2,400, and

• Manually save RM400 every month

Your manual savings is not the only factor helping you achieve RM1 mil.

As long as you’re employed, you (and your employer) are required to mandatorily contribute to your retirement fund every month.

If your salary is below RM5,000:

• Your mandatory EPF contributions: 11%.

• Your employer’s mandatory EPF contributions: 13%.

Combined with your manual savings, you can easily save 40-50% of your gross pay.

From the previous example, you will accumulate RM386,496 in 33 years.

The remaining RM700k is interest earned.

Read that again.

It’s in those final years that you really see your funds start to compound.

So start saving as soon as possible, no matter how small the amount.

But I’m not so young anymore. How??

The table below shows the monthly contributions you require to achieve RM1 million by 55.

If you have higher savings than the average and your monthly contributions are within or exceed the range, Congratulations! 🎉

You will most certainly hit RM1 mil by 55.

It gets exponentially harder to achieve RM1 mil as we age.

A 36 year old will find it 39-48% more difficult to hit RM1 mil compared to a 31 year old.

This is because compound interest works with time, giving those who start earlier a much greater advantage.

RM1 million will be the minimum required to retire in 20-30 years.

Mark my words.

Referring to the Belanjawaku study, retirees require at least RM2,520 per month to survive today.

But in 25 years, this figure will increase to RM4,672 per month with an inflation of just 2.50% per year.

To rely on EPF dividends alone, you would need at least RM56,000 per year, or a capital of RM1.02 million.

“I’ll die before I reach 70 anyway.”

I only have two things to say to this:

i) I’m really sorry if you think that way.

ii) The odds are against your favor.

Malaysia’s life expectancy is currently 75 years, and it will only increase in the near future.

So start now.

Start saving today.

Even if you don’t achieve RM1 mil, think of it this way:

Having some savings stored somewhere is better than having none at all.

Resources to kick start your investing journey:

i) How to Save RM100,000 by 35.

ii) Make RM1,000 work for you.

iii) Invest in riskier assets if you’re young.

For patrons, you may access all of these easily via the collections tab in your Patreon account.

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Disclaimer: The information contained in this newsletter is for informational and educational purposes only. Nothing herein shall be construed to be financial, legal, or tax advice.