Studying Hard vs Financial Planning

I recently had a conversation with a university friend whom I hadn't met in 25 years. During our conversation, my friend, who has two children, mentioned an intriguing question asked by one of their children: "Why should we study so hard when the government approves a minimum wage starting at RM 1,500 per month?" My friend was stunned by this question, and I couldn't help but smile. Determining Your Future Salary The real question to ask is, "How much will be your last drawn salary if you start with RM 1,500 per month now?" Let's assume you begin working at age 20 and plan to retire at age 60, giving you 40 years of working life. For the sake of simplicity, we'll assume a permanent annual salary increase of 4%. The answer is that your last drawn salary upon retirement at age 60 will be RM 7,201.50 per month! In contrast, considering an article that suggests a fresh graduate's starting salary will be RM 2,500, and assuming a permanent increase of

i-Sinar i-Lestar & i-Citra you are very lucky

There have been 3 initiatives to withdrawal savings from your retirement account since the year 2020. I just want to quote the below statement from Free Malaysia.

"He cited a recent statement by EPF chief executive Amir Hamzah Azizan that 6.3 million contributors or 42% of the total 15 million members now have less than RM10,000 in Account 1 while 9.3 million people have less than RM10,000 in Account 2."

Now is mathematic time:

42% = 6.3 million contributors

100% = 15 millions contributors

EPF fund size is RM 1 trillion now. Refer to The Edge

Let's continue the maths and my personal assumption:

I assume and round up the numbers of 15 million members has RM10,000 in Account 1, which follow the 70% and 30% split rato. 

Therefore, total EPF account value for the 15 million members is:

= Account 1 + Account 2 

= [15,000,000 x RM10,000] + [15,000,000xRM4,285.71]

= RM 214 billions

Let's continue to the second group 9.3 million people have less than RM10,000 in Account 2

Therefore, total EPF account value for the 9.3 million members is:

= Account 1 + Account 2 

= [9,300,000 x RM23,333] + [9,300,000 x RM10,000]

= RM 310 billions

If we add both groups together, the total EPF account value is RM 524 billion from the 15.6 million contributors. 

I can not brain this mathematics question "What and where is the contribution from TOP20 employees?"

It does not end here, when the government allow to withdrawal RM5,000 via i-Citra, mathematically speaking, 15.6 million x RM 5,000 = RM 78 billion is "injected" into the economy. It might not so much compare to the total injection from the government spending, but RM 78 billion!!!!! Where is all the money?

Finally, if you still have a balance in your EPF account and eligible for this i-Citra, consider yourself as the really fortunate and blessed group. All your hard work and savings in the past brought you to where you are today. Whether you decide to withdraw or not, it is your decision to make use of the money to put food on the table today. Retirement is a distant problem compare to the current economic lockdown situation. I wish all of us will survive this pandemic.

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