BY NURFARAHIN BINTI OKI
KUCHING: The proposed withdrawal strategy from EPF’s Account 3 to reinvest in Accounts 1 and 2 could have multifaceted effects on the local economy, according to financial planner Kenson Cheong Kwang Siang.
Cheong noted that the Employees’ Provident Fund (EPF), particularly Account 3, offers flexibility in response to the evolving financial landscape of the 21st century.
With global inflation, rapid digitisation in the banking industry, technological advancements, and the rise of AI, many Malaysians face challenges in keeping up with financial changes.
“The implementation of Account 3 provides enhanced flexibility, aiding better financial planning and decision-making. It offers relief from financial stress and burdens, serving as an additional liquidity option to combat inflation,” Cheong stated.
He suggested that for individuals not under financial stress, withdrawing from EPF 3 to reinvest in Accounts 1 and 2 could be a prudent move.
However, this choice might result in a reduced retirement corpus, potentially falling short of retirement goals and desired lifestyles.
While such strategies might stimulate economic activity and contribute to overall growth, if a significant portion of EPF members opt for this approach, it could reduce the pool of funds available for long-term investment by EPF itself.
In a previous news report by TVS, Professor Dr Evan Lau Poh Hock, a lecturer from the Faculty of Economics and Business at Universiti Malaysia Sarawak, highlighted the flexibility of the account in accessing savings during emergencies.
“The funds in this account can be withdrawn quickly in emergency situations, protecting the financial stability of individuals and families in unforeseen circumstances,” Prof Lau said.
