EPF Malaysia: Navigating The Withdrawal Process For First-Timers

[UPDATED] The Employee Provident Fund (EPF) Malaysia is a crucial financial tool designed to secure your retirement by accumulating savings throughout your working years. As a first-time user, the EPF withdrawal process may seem daunting but don’t sweat it – we’ll walk through it together.

Our guide will walk you through what we know of EPF’s withdrawal process to ensure a seamless experience during your first withdrawal. Let’s hop right into it:

Understanding The Three Main EPF Malaysia accounts: An Essential Key to A Successful Withdrawal

As of 11 May 2024, EPF has restructured its members retirement income scheme from 2 accounts to 3 accounts. The objective of this initiative is to provide financial support for your current and future lifecycle needs. Therefore, it’s important to familiarise yourself with these 3 EPF Accounts:

• Account 1 – Akaun Persaraan (75% of contributions): Primarily reserved for retirement, with limited withdrawal options.
• Account 2 – Akaun Sejahtera (15% of contributions): Funds to support your wellbeing during retirement, otherwise partial withdrawal is available for specific purposes such as housing, education or medical expenses.
• Account 3 – Akaun Fleksibel (10% of contributions): This account provides financial aid for short-term needs, and withdrawal can be made anytime.

For more information about how EPF ensures retirement security, click here.

What Are The Eligibility Requirements to Withdraw EPF Funds?

Source of screen capture: https://www.kwsp.gov.my/en/member/life-stages

Since EPF Malaysia restructured the retirement scheme, they have categorised withdrawal types according to financial stages (refer to the image above) to help members better understand their lifestyle needs.

Full Withdrawal:

If it’s your first time applying for a full withdrawal, it’s important to take note of the eligibility criteria to avoid any surprises or delays:

• Applicable to Malaysians and non-Malaysian citizens
• Aged 55 years and above
• Have savings with EPF Malaysia

Partial Withdrawals – According to Lifestyle Needs:

Source of screen capture: https://www.kwsp.gov.my/en/member/life-stages/-/categories/64812/#disp-category

As seen in the image above, partial withdrawals are now separated into five categories. Here’s an overview of its eligibility criteria:

1. Akaun Fleksibel:

• Applicable to Malaysians and non-Malaysian citizens (Non-Malaysians will have to manually apply at the nearest EPF office)
• Have savings in Akaun Fleksibel
• For short-term financial needs

2. Educational Expenses:

• Applicable to Malaysians and non-Malaysian citizens
• Below age 55
• Have savings in Akaun Sejahtera
• Currently studying or has completed Certificate Level 3, Diploma or higher
• Studying locally or abroad
• Has not received any sponsorship or received partial sponsorship/ loan for education
• Member (Or those related to member) who did not complete higher education (From approved educational institutions)

For more information, refer to the full breakdown on EPF’s official website here.

3. Age 50:

When you turn 50, you can choose to apply for a one-time partial withdrawal from your Akaun Sejahtera savings to support your retirement planning.

• Applicable to Malaysians and non-Malaysian citizens
• Aged between 50-54
• Have savings in Akaun Sejahtera

4. Fund Your Hajj:

Performing hajj? You can opt to withdraw from your Akaun Sejahtera to supplement your savings from Lembaga Tabung Haji (LTH) for hajj expenses.

Follow these simple steps to successfully and seamlessly complete your first EPF withdrawal:

1. Check your eligibility: Confirm that you meet the eligibility criteria for EPF withdrawal based on your situation.
2. Prepare the required documents: Collect the necessary documents such as your IC, EPF statement, and any other paperwork relevant to your withdrawal reason.
3. Complete the withdrawal form: Fill out the appropriate EPF withdrawal form that you can download here.
4. Submit the withdrawal form and documents: Submit the completed form and required documents to your nearest EPF branch office or via the EPF i-Akaun online portal.
5. Wait for EPF’s processing and approval: The EPF office will review your application and notify you of the decision. If it’s approved, the funds will be transferred to your designated bank account.

After your first EPF withdrawal, it’s essential to manage your funds wisely. Here are some financial management tips you can consider:

1. Create a budget: Plan your expenses and savings to ensure a comfortable and secure retirement.
2. Invest wisely: Diversify your investment portfolio to grow your retirement funds further.
3. Consult a financial planner: Seek professional advice to optimise your financial strategies and goals.