The Employees’ Provident Fund (EPF) has declared its dividend for 2024. The rate for conventional savings is 6.30% (2023: 5.50%). It is the same (2023: 5.40%) for Simpanan Shariah. This is the first time that both types of accounts having the same dividend rate.
This dividend rate is better than what I expected.
Dividend history
You may refer to this page (click here) for EPF dividend history.
Its dividend rate is lower than the performance of KLCI (+12.90%) in 2024. However, given the stability and risk profile of EPF, I think 6.30% is not that bad.
Conclusion
I was hoping for a slightly higher dividend rate or at least the same rate as 2023 for 2024. Nonetheless, EPF did better and surprised me. I still think it is a wise move to keep the money in EPF to reap the benefit of compounding as it is a safe investment vehicle for retirement. I just hope that EPF would continue to perform well and provide a dividend rate of at least 5% annually. Anything more than this will help me to achieve my goal earlier.
As of October 2024, around 36% of active formal EPF members meet the existing Basic Savings level according to age, anchored on RM240,000 at age 55 (click here for the news). Basic Savings is a pre-determined amount set according to age in Account 1 to enable members to achieve a minimum savings of RM240,000 when they reach age 55. This will ensure that members have sufficient savings at a minimum amount of RM1,000 per month when they retire in order to support their basic retirement needs for 20 years from age 55 to 75, in line with Malaysians’ life expectancy.
Thus, Basic Savings is a bare minimum that a lot of people could not even achieve. This is indeed worrying. It means they cannot afford to retire or they will face financial difficulty if they do not have other assets. It is important to take action early so that you can have your desired lifestyle during retirement.
EPF has released Retirement Income Adequacy Framework the recommended savings levels from a single-tier savings benchmark to a three-tier savings framework. The amount required was increased, thus RM 240,000 is no longer sufficient. You may read this article to learn more about this update.
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Disclaimer: This post is for informational purposes only. You should use judgment and conduct due diligence before taking any action or implementing any plan suggested or recommended in this article.
