48 SMART: KWSP Withdrawals
+Smartan Dad

Wednesday, 21 August 2013

KWSP Withdrawals

KWSP savings is not allowed to be fully withdrawn until we retire as it is a mandatory savings enforced to help us during our retirement. There are two categories of withdrawals provided by KWSP, namely Pre-Retirement Withdrawal and Retirement Withdrawal.

Pre-Retirement Withdrawal allows us to withdraw a certain amount from our savings before we reach the retirement age. On the other hand, Retirement Withdrawal allows us to withdraw all of our savings upon reaching our retirement age. Apart from that, KWSP also allows its members to make investment withdrawal when we have fulfilled the requirements.

As we all know, there are 2 accounts created for our KWSP savings, whereby 70% of our monthly contribution will go into Akaun 1 and another 30% into Akaun 2. Akaun 2 is meant for Pre-Retirement Withdrawal, which includes:
  1. Age 50 Years Withdrawal
  2. Withdrawal to Reduce / Redeem Housing Loan
  3. Education Withdrawal
  4. Withdrawal to Purchase / Build a House
  5. Withdrawal Of Savings Of More Than RM1 Million
  6. Housing Loan Monthly Installment Withdrawal
  7. Flexible Housing Withdrawal
  8. Health Withdrawal
  9. Hajj Withdrawal

                Below withdrawals are entitled for full amount:

                1. Age 55 Years Withdrawal
                2. Incapacitation Withdrawal
                3. Leaving Country Withdrawal
                4. Pensionable Employees Withdrawal And Optional Retirement Withdrawal
                5. Death Withdrawal

                As for investment withdrawal, we can invest maximum 20% of total amount in excess of our Basic Savings in Akaun 1 through the Appointed Fund Management Institutes approved by the Ministry of Finance. Basic Savings is a pre-determined savings amount in our Akaun 1 according to age to enable us to achieve a minimum savings amount of RM 120000 when we are 55 years old. You can refer to the Basic Savings schedule here.

                The minimum amount for investment withdrawal is RM 1000. Direct investment is not allowed. All investments must be made through the Fund Management Institutes approved by the Ministry of Finance. All invested amounts (including the gains) must be returned to KWSP as soon as investment units are sold. The amount returned will be credited back to Akaun 1. Withdraw of any amount from investment with the Fund Management Institutes is prohibited.

                KWSP withdrawal facilities certainly ease our burdens especially when we need money to pay for first house down payment, education fees and medical bills.


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